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Medicaid Coverage of Long-Term Services
and Supports
Kirsten J. Colello
Specialist in Health and Aging Policy
November 12, 2014
Congressional Research Service
7-5700
www.crs.gov
R43328
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Medicaid Coverage of Long-Term Services and Supports
Summary
Long-term services and supports (LTSS) refer to a broad range of health and health-related
services and supports needed by individuals who lack the capacity for self-care due to a physical,
cognitive, or mental disability or condition. Often the individual’s disability or condition results
in the need for hands-on assistance or supervision over an extended period of time. Medicaid
plays a key role in covering LTSS to aged and disabled individuals. As the largest single payer of
LTSS in the United States, federal and state Medicaid spending accounted for $136.3 billion or
42.0% of all LTSS expenditures in 2012 ($324.2 billion). LTSS are also a substantial portion of
spending within the Medicaid program relative to the population served, accounting for over one-
third (35.3%) of all Medicaid spending. Of the 66 million total enrolled Medicaid population, an
estimated 4.2 million (or 6.4%) Medicaid beneficiaries received LTSS in 2011.
Medicaid funds LTSS for eligible beneficiaries in both institutional and home and community-
based settings, though the portfolio of services offered differs substantially by state. Moreover,
states are required to offer certain Medicaid institutional services to eligible beneficiaries, while
the majority of Medicaid home and community-based services (HCBS) are optional for states. In
recent decades, federal authority has expanded to assist states in increasing and diversifying their
Medicaid LTSS coverage to include HCBS. As a result, the share of Medicaid LTSS spending for
HCBS has more than doubled, accounting for 18% of Medicaid LTSS spending in 1995 to half
(50%) of total Medicaid LTSS spending in 2012.
States now have a broad range of coverage options to select from when designing their LTSS
programs. In general, Medicaid law provides states with two broad authorities, which either cover
certain LTSS as a benefit under the Medicaid state plan or cover home and community-based
LTSS through a waiver program which permits states to disregard certain Medicaid requirements
in the provision of these services, subject to approval. Given the range of available coverage
options, states continue to enhance or expand their LTSS delivery systems to cover additional
services or target services to specific populations with a focus on HCBS. In FY2014 and FY2015,
the number of states reporting activities to expand HCBS increased to 42 and 47 states,
respectively (compared to 26 states in FY2012 and 33 states in FY2013). Most states reported
using Section 1915(c) HCBS waiver authority programs or the Section 1915(i) HCBS state plan
option to expand their HCBS offerings. The Patient Protection and Affordable Care Act (ACA,
P.L. 111-148, as amended) established or extended several Medicaid state plan options and grant
activities to enhance or expand states’ LTSS delivery systems. In FY2013, 19 states reported
having at least one of these activities in effect; 12 states reported implementing at least one of
these activities in FY2014; and 15 states reported plans to implement in FY2015.
This report provides a description of the various statutory authorities that either require or
otherwise allow states to cover LTSS under Medicaid. Appendix A provides a brief legislative
history of Medicaid LTSS from Medicaid’s enactment and initial coverage requirements for
institutional care through the evolution of HCBS options available to states. A discussion of
changes to Medicaid made by the Patient Protection and Affordable Care Act (ACA, P.L. 111-
148, as amended) with respect to LTSS coverage options is also provided. The tables in
Appendix B provide state information about coverage of Medicaid state plan optional benefits
and certain grant programs to expand Medicaid HCBS.
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Contents
Introduction ...................................................................................................................................... 1
Medicaid LTSS Coverage ................................................................................................................ 2
LTSS State Plan Coverage ......................................................................................................... 4
Mandatory State Plan Benefits ............................................................................................ 5
Optional State Plan Benefits................................................................................................ 7
Medicaid Waivers .................................................................................................................... 18
Section 1915(d) HCBS Waivers for the Elderly ................................................................ 21
Section 1915(e) HCBS Waivers for Certain Children ....................................................... 22
Section 1115 Research and Demonstration Projects ......................................................... 22
Other Medicaid HCBS Financing Incentives .......................................................................... 23
Money Follows the Person (MFP) Rebalancing Demonstration ....................................... 23
Balancing Incentive Payments Program............................................................................ 25
Tables
Table 1. Mandatory and Optional Medicaid State Plan Long-Term Services and Supports
(LTSS)........................................................................................................................................... 5
Table 2. Medicaid LTSS Expenditures for Selected Mandatory and Optional State Plan
Services, FY2012 ........................................................................................................................ 12
Table 3. Key Features of Selected Coverage of HCBS Under Medicaid....................................... 17
Table 4. Covered Medicaid Services Under Section 1915(c) Home and Community-
Based Services (HCBS) Waiver Programs ................................................................................. 19
Table B-1. Optional State Plan Medicaid Long-Term Services and Services (LTSS)
Benefits, by State ........................................................................................................................ 31
Table B-2. New and Amended State Plan Options Under the Patient Protection and
Affordable Care Act (ACA, P.L. 111-148, as amended) ............................................................. 33
Table B-3. State Participation in the Money Follows the Person Demonstration Grants
and Balancing Incentive Program, as of October 2014 .............................................................. 35
Appendixes
Appendix A. Legislative History of Medicaid Long-Term Services and Supports (LTSS) ........... 27
Appendix B. State Tables ............................................................................................................... 31
Contacts
Author Contact Information........................................................................................................... 37
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Introduction
Medicaid plays a key role in covering long-term services and supports (LTSS) to eligible aged
and disabled individuals. As the largest single payer of LTSS in the United States, Medicaid LTSS
spending in 2012 (combined federal and state) totaled $136.3 billion and accounted for 42.0% of
all LTSS expenditures ($324.2 billion).1 LTSS are also a substantial portion of spending within
the Medicaid program relative to those served. In 2012, Medicaid LTSS accounted for over one-
third (35.3%) of all Medicaid spending despite the fact that LTSS recipients represent a relatively
small share of the total Medicaid population.2 An estimated 4.2 million Medicaid beneficiaries (or
6.4%) of the 66 million total enrolled Medicaid population received LTSS in FY2011.3
Medicaid funds LTSS for eligible beneficiaries
What Are Long-Term Services
in both institutional settings and home and
and Supports?
community-based settings, though the portfolio Long-term services and supports (LTSS) refer to a broad
of services offered differs substantially by
range of health and health-related services and supports
state. Federal law requires that state Medicaid
needed by individuals who lack the capacity for self-care
programs cover certain LTSS for eligible
due to a physical, cognitive, or mental disability or
condition. Often the individual’s disability or condition
beneficiaries, such as nursing facility care.
results in the need for hands-on assistance or supervision
However, states have a range of options that
over an extended period of time.
allow LTSS coverage of home and community-
For more information, see CRS Report R43495, Long-
based services (HCBS) for Medicaid
Term Services and Supports: In Brief, by Kirsten J. Colello.
beneficiaries based on need, and that allow
states to target such coverage to particular
groups of individuals (i.e., older adults and individuals with physical disabilities, or individuals
with a specific disease or condition such as HIV/AIDS). These flexibilities under Medicaid law
have led to widespread variation in state Medicaid LTSS benefit packages offered to elderly and
disabled individuals.
One important issue for Medicaid LTSS coverage is its perceived “institutional bias.” The original
1965 Medicaid law established that eligible Medicaid beneficiaries are entitled to nursing facility
care. In more recent decades, federal Medicaid statutory authority has expanded to assist states in
increasing and diversifying their Medicaid LTSS coverage to include optional HCBS. For
example, the addition of the Section 1915(c) HCBS waiver to Medicaid law in 19814 and
subsequent statutory amendments that created new Medicaid state plan benefit options have
allowed states to further the provision of HCBS. Subsequent legislative and administrative
activities to expand Medicaid HCBS, in part, were prompted by the U.S. Supreme Court decision
in Olmstead v. L.C.,5 which held that the institutionalization of people who could be cared for in
1 Based on CRS analysis of National Health Expenditure Account (NHEA) data obtained from the Centers for
Medicare & Medicaid Services (CMS), Office of the Actuary, prepared December 3, 2013. For further information on
LTSS financing, see CRS Report R43483, Who Pays for Long-Term Services and Supports? A Fact Sheet, by Kirsten J.
Colello and Scott R. Talaga.
2 Ibid.
3 Medicaid and CHIP Payment and Access Commission (MACPAC), Report to the Congress on Medicaid and CHIP,
June 2014, p. 114, http://www.macpac.gov/reports.
4 Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35).
5 527 U.S. 581 (1999). For further information on Olmstead v. L.C., see CRS Report R40106, Olmstead v. L.C.:
Judicial and Legislative Developments in the Law of Deinstitutionalization.
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community settings was a violation of Title II of the Americans with Disabilities Act (ADA). As a
result, states have a broad range of coverage options to select from when designing their LTSS
programs. Moreover, the share of Medicaid LTSS spending for HCBS has more than doubled
over time, from 18% of Medicaid LTSS spending in FY1995 to approximately half of total
Medicaid LTSS spending in FY2012.6
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) further adds
to the range of options available to states that want to pursue HCBS coverage expansion.
Specifically, the ACA established or extended several Medicaid state plan options (Section
1915(i) HCBS state plan option and Section 1915(k) Community First Choice state plan option).
Other ACA enacted programs provide financial incentives for states to offer HCBS through grant
activities such as the Balancing Incentive Payments (BIP) Program. In FY2013, 19 states reported
having at least one of these three activities in effect; 12 states reported implementing at least one
activity in FY2014; and 15 states reported plans to implement in FY2015.7
In FY2014 and FY2015, the number of states reporting activities to expand HCBS increased to 42
and 47 states, respectively (compared to 26 states in FY2012 and 33 states in FY2013).8 Most
states reported using Section 1915(c) HCBS waiver programs or the Section 1915(i) HCBS state
plan option to expand their HCBS offerings. States also reported plans to expand Programs for
All-Inclusive Care of the Elderly (PACE), as well as other efforts to implement or expand the
financing and delivery of Medicaid LTSS through managed care arrangements. Some states
reported closing institutional settings or downsizing beds in these settings in an effort to expand
community placements (10 states in FY2014 and 14 states in FY2015).9
This report provides a description of the various statutory authorities and other legislative
provisions that either require or otherwise allow states to cover LTSS under Medicaid. The
report’s Appendix A provides a brief legislative history of Medicaid LTSS from Medicaid’s
enactment and initial coverage requirements for institutional care through the evolution of HCBS
options available to states. A discussion of ACA’s changes to Medicaid law with respect to
Medicaid LTSS coverage options is also provided. The Appendix B tables provide state
information about coverage of Medicaid state plan optional benefits and certain grant programs to
expand Medicaid HCBS.
Medicaid LTSS Coverage
Medicaid is a means-tested individual entitlement program which finances the delivery of health
care and LTSS to certain low-income individuals. Established under Title XIX of the Social
Security Act (SSA), the Medicaid program is state-operated, within broad federal guidelines, and
6 Eiken, S., K. Sredl, L. Gold, et al., Medicaid Expenditures for Long-Term Services and Supports in FFY 2012, Truven
Health Analytics, April 2014, p. 5, at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Long-Term-Services-and-Supports/Downloads/LTSSExpendFFY2012_Final.pdf.
7 Vernon K. Smith, K. Gifford, E. Ellis, et al. Medicaid in an Era of Health & Delivery System Reform: Results from a
50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015, Kaiser Family Foundation and the National
Association of Medical Directors, October 2014, p. 33, at http://files.kff.org/attachment/medicaid-in-an-era-of-health-
delivery-system-reform-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2014-and-2015-report.
8 Ibid., p. 29.
9 Ibid., p. 29.
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is funded by both state and federal revenues.10 The federal share for Medicaid service costs is
determined by the federal medical assistance percentage (FMAP). FMAP rates are based on a
formula that provides higher federal reimbursement to states with lower per capita income
relative to the national average (and vice versa).11 Historically, to qualify for Medicaid individuals
must meet certain categorical and financial requirements. To qualify for Medicaid LTSS,
individuals must also meet state-defined level-of-care criteria.12
State Medicaid LTSS delivery systems include the provision of services in two types of settings:
(1) services provided in institutional settings, such as nursing facilities, and (2) services and
supports provided in home and community-based settings, such as private homes, adult day
facilities, or assisted living facilities.13 States are required to offer certain Medicaid institutional
services. However, the majority of HCBS offerings are optional for states.
Medicaid law and other provisions in SSA contain several authorities that permit states to offer
LTSS to individuals in need of such services. In general, Medicaid law provides states with two
broad authorities, which either cover certain LTSS as a benefit under the Medicaid state plan or
cover home and community-based LTSS through a waiver program which permits states to waive
certain Medicaid requirements to allow the provision of these services.14 The following describes
the Medicaid state plan authority and various waiver authorities that either require or permit states
to cover LTSS. In addition, other Medicaid statutory provisions that offer states incentives to
further enhance or expand their LTSS delivery systems are identified.
10 For more information on Medicaid see, CRS Report R43357, Medicaid: An Overview, coordinated by Alison
Mitchell.
11 FMAP rates have a statutory minimum of 50% and a maximum of 83%, although some Medicaid services receive a
higher federal match rate. For FY2014, FMAP rates range from 50.00% to 73.05%, with the federal contribution
covering about 57% of the total cost of Medicaid in a typical year. The FMAP rate for Medicaid administrative costs
are typically capped at 50%. For further information, see CRS Report R42941, Medicaid’s Federal Medical Assistance
Percentage (FMAP), FY2014, by Alison Mitchell and Evelyne P. Baumrucker.
12 To define level-of-care criteria, states may use “functional” criteria such as an individual’s ability to perform certain
Activities of Daily Living (ADLs, e.g., eating, bathing, dressing, and walking) or to perform certain Instrumental
Activities of Daily Living (IADLs, e.g., shopping, housework, and meal preparation) that allow an individual to live
independently in the community. Other states may use “clinical” level-of-care criteria that include diagnosis of an
illness, injury, disability or other medical condition, treatment and medications, and cognitive status, among other
information. Most states use a combination of functional and clinical criteria in defining the need for LTSS. For further
information on state specific level-of-care criteria, see L. Hendrickson and G. Kyzr-Sheeley, “Determining Medicaid
Nursing Home Eligibility: A Survey of State Level of Care Assessment,” Rutgers Center for State Health Policy,
March 2008.
13 On January 16, 2014 CMS issued a final rule, effective March 17, 2014, that establishes requirements for home and
community-based settings in Medicaid HCBS programs and aligns these requirements across three Medicaid
authorities—Section 1915(c) HCBS waivers, Section 1915(i) HCBS state plan option, and Section 1915(k) Community
First Choice (CFC) state plan option; Department of Health and Human Services, “Medicaid Program; State Plan
Home and Community-Based Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Home and
Community-Based Setting Requirements for Community First Choice and Home and Community-Based Services
(HCBS) Waivers; Final Rule,” 79 Federal Register 2948-3039, January 16, 2014.
14 As an alternative to states providing all of the mandatory and selected optional state plan benefits under “traditional”
Medicaid, the Deficit Reduction Act of 2005 (DRA; P.L. 109-171) established benchmark and benchmark-equivalent
coverage, now referred to as “alternative benefit plans” (ABPs). In general, these benefit packages look more like
benefit coverage available in the private market and may cover fewer benefits than traditional Medicaid. However, in
designing a Medicaid ABP, states may also choose to offer LTSS. Further discussion of LTSS offered in ABPs is
beyond the scope of this report. For more information about ABPs, see CRS Report R43656, Traditional Benefits and
Alternative Benefit Plans Under Medicaid, by Elicia J. Herz.
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LTSS State Plan Coverage
The state plan is the contract between a state and the federal government which describes how
that state administers its Medicaid program and provides assurance that the state will meet federal
Medicaid requirements in order to receive matching federal funds for program activities. In
general, the Medicaid state plan describes those groups of individuals to be covered, benefits to
be provided, methodologies for providers to be reimbursed, and administrative requirements that
states must meet to participate.15 State plans are developed by the states and approved by the
Centers for Medicare & Medicaid Services (CMS). States may update their state plans by
submitting a state plan amendment (SPA) for CMS review and approval. Once a state plan or SPA
is approved, states may receive matching federal funds for covered benefits without further need
for CMS review or approval.
Medicaid statutory provisions require states to cover certain benefits under the “traditional”
Medicaid state plan program (i.e., mandatory benefits) and give states the option to cover others
(i.e., optional benefits). With respect to state plan benefits, federal law requires states to meet the
following guidelines with some exceptions:
• Each service must be sufficient in amount, duration, and scope to reasonably
achieve its purpose. States may place appropriate limits on a service based on
such criteria as medical necessity or functional level-of-care.
• Within a state, services available to certain groups of enrollees must be equal in
amount, duration, and scope. This requirement is referred to as the
“comparability” requirement.
• With certain exceptions, the amount, duration, and scope of benefits must be the
same statewide, also known as the “statewideness” requirement.
• With certain exceptions, beneficiaries must have “freedom of choice” among
health care providers or managed care entities participating in Medicaid.
Waiver programs, on the other hand, allow states to provide benefits outside of some of these
rules and to test new or existing ways to finance and deliver services. For example, waiver
programs allow states to extend benefits that are, among other things, neither comparable across
groups nor statewide. States must submit a separate waiver application for CMS review and
subsequent approval. Unlike Medicaid state plan benefit coverage, Medicaid waiver benefit
coverage is time limited for the duration of the waiver (e.g., three or five years) and must be
renewed by the state subject to CMS approval. Together, these state plan and waiver authorities
constitute a range of options that states have in designing their LTSS benefit packages for eligible
beneficiaries.
Table 1 lists LTSS state plan benefits by the setting in which they are provided (institutional vs.
HCBS) and whether they are a mandatory or optional state plan benefit.16
15 CMS, Medicaid State Plan Amendments, at http://www.medicaid.gov/State-Resource-Center/Medicaid-State-Plan-
Amendments/Medicaid-State-Plan-Amendments.html.
16 This report defines Medicaid LTSS to include those expenditures identified in Eiken, S., K. Sredl, L. Gold, et al.,
Medicaid Expenditures for Long-Term Services and Supports in FFY 2012, Truven Health Analytics, April 2014.
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Table 1. Mandatory and Optional Medicaid State Plan Long-Term Services and
Supports (LTSS)
Mandatory Benefits
Optional Benefits
Nursing Facility Services (age 21 and older)
Nursing Facility Services (under age 21)
[SSA §1902(a)(10)(A) and §1905(a)(4)]
[SSA §1905(a)(29)]
Intermediate Care Facilities for Individuals
with Intellectual Disabilities (ICFs/ID)
[SSA §1905(a)(15)]a
Institutional
Services in Institutions for Mental Diseases
Services
(IMDs) (age 65 and over)
[SSA §1905(a)(14)]
Inpatient Psychiatric Care (under age 21)
[SSA §1905(a)(16)]
Private Duty Nursing Services
[SSA §1905(a)(8)]
Home Health Services
Case Management/Targeted Case Management
[SSA §1902(a)(10)(D) and §1905(a)(7]
[SSA §1905(a)(19)]
Health Homes for Individuals with Chronic
Conditions
[SSA §1945]
Personal Care Services
[SSA §1905(a)(24)]
Private Duty Nursing Services
[SSA §1905(a)(8)]
Home &
Program for All-Inclusive Care of the Elderly
Community-
(PACE)
Based Services
[SSA §1934 and §1905(a)(26)]
Rehabilitative Services
[SSA §1905(a)(13)]
State Plan Home and Community-Based
Services
[SSA §1915(i)]
Self-Directed Personal Assistance Services
[SSA §1915(j)]
Community First Choice
[SSA §1915(k)]
Source: CRS; for the ful -range of Medicaid benefits, see the Centers for Medicare & Medicaid Services website
at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Benefits/Medicaid-Benefits.html.
a. Federal Medicaid law and regulations use the term “intermediate care facilities for the mentally retarded”
and abbreviation “ICFs/MR”; however, federal agencies use the term individuals with “intellectual disability
(ID).”
Mandatory State Plan Benefits
Among the Medicaid state plan LTSS benefits described below, the only state plan benefits that
participating states are required by federal law to cover are nursing facility services and home
health. States must offer these services to eligible beneficiaries statewide. However, each state
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determines the amount, duration, and scope of these services. The following describes these LTSS
benefits in greater detail.
Nursing Facility Services
States are required to cover nursing facility services for beneficiaries ages 21 and over under their
Medicaid plans. States have the option to cover nursing facility services for beneficiaries under
age 21. According to CMS, all states provide this optional service.17 Beneficiaries must also meet
state-defined nursing home eligibility criteria, referred to as level-of-care criteria. Nursing facility
services include nursing care and related services, dietary services, physician services, specialized
rehabilitation services (e.g., physical and occupational therapy, speech pathology and audiology
services, and mental health rehabilitative services), emergency dental care, and pharmacy
services.18 Medicaid coverage of nursing facility services also includes room and board.
Home Health Services
Home health services are a mandatory benefit linked to requirements that states provide nursing
facility care for certain individuals.19 States must cover home health services for categorically
eligible individuals ages 21 and older who are entitled to nursing facility coverage under a state’s
Medicaid state plan.20,21 States must also offer home health to categorically eligible individuals
under age 21 if the state plan provides nursing facility services to this population group. Thus,
home health services are a required benefit for beneficiaries under age 21 as well, as all states
choose to cover nursing facility services for this population. Medicaid eligibility for the home
health services benefit is not conditional on a need for institutional care or the need for skilled
nursing or therapy services.
At a minimum the home health service benefit includes nursing services, home health aide
services, and medical supplies, equipment, and appliances suitable for in home use.22 States have
the flexibility to offer additional therapeutic services under the home health benefit, such as
17 CMS, “Nursing Facilities,” at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Delivery-
Systems/Institutional-Care/Nursing-Facilities-NF.html.
18 42 C.F.R. § 483, subpart B.
19 For more information, see U.S. Department of Health and Human Services, Understanding Home and Community-
Based Services: A Primer, 2010, http://aspe.hhs.gov/daltcp/reports/2010/primer10.htm.
20 In general, there are two broad classifications of Medicaid eligibility groups: (1) categorically needy (which include
both mandatory and optional eligibility groups) and (2) medically needy (optional eligibility group). Historically,
Medicaid eligibility was subject to categorical restrictions that generally limited coverage to certain categories of
individuals (i.e., “categorically needy”) such as the elderly, persons with disabilities, or members of families with
dependent children. States may choose to cover the “medically needy” who are individuals whose income is too high to
qualify as categorically needy. Medically needy coverage is particularly important for the elderly and persons with
disabilities, since this pathway allows deductions for medical expenses that lower the amount of income counted in the
determination of financial eligibility for Medicaid.
21 Individuals who are entitled to nursing facility services are not necessarily eligible for such care. To be eligible for
nursing facility services, entitled individuals must also meet state-based nursing facility eligibility criteria or level-of-
care criteria. Federal regulations specify coverage groups entitled to home health as (a) categorically eligible
individuals ages 21 or over; (b) categorically eligible individuals under age 21 if the state plan provides nursing facility
services to this population group; and (c) medically needy individuals to whom nursing facility services are provided
under the state plan (42 CFR § 441.15).
22 See 42 C.F.R. § 440.70.
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physical therapy, occupational therapy, speech pathology, and audiology services. Once the home
health benefit is determined, states must offer both the required and optional home health services
to all Medicaid beneficiaries entitled to nursing facility services under their state plans. Home
health services must be ordered by a physician as part of a written plan of care and reviewed by
the physician every 60 days. States must provide home health services to beneficiaries in their
place of residence with certain exceptions.23
Optional State Plan Benefits
States may cover other types of LTSS under a Medicaid state plan. These optional LTSS benefits
assist older individuals and persons with disabilities who live in the community and may need
assistance with activities of daily living. Medicaid coverage of these home and community-based
services includes coverage of specific benefits such as case management or personal care. States
also have authority to cover packages of HCBS benefits targeted at particular groups of
beneficiaries. Similar to mandatory state plan benefits, each state determines the amount,
duration, and scope of these services. The following describes these coverage options in greater
detail. For state specific information about optional benefit coverage see Appendix B, Table B-1
and Table B-2.
Case Management/Targeted Case Management
States may offer case management services to assist individuals who reside in community
settings, or who are transitioning from an institutional to a community setting, in gaining access
to needed medical, social, educational, and other services. Case management includes a
comprehensive assessment and periodic reassessment of a beneficiary’s needs, and development
and implementation of a tailored care plan. Examples of case management services include
service/support planning, monitoring of services, and assistance to beneficiaries with obtaining
other non-Medicaid benefits, such as the Supplemental Nutrition Assistance Program (SNAP),
energy assistance, and emergency housing.
States choosing to offer the case management benefit must make it available on a statewide basis.
States also have the option to offer a targeted case management benefit to a specified beneficiary
population within a specific geographic area. Like the case management benefit, states can use
targeted case management to assist such individuals in gaining access to needed medical, social,
educational, and other services. To be eligible for either benefit option, Medicaid beneficiaries
must meet the state-defined eligibility criteria for that benefit. Forty-eight states and the District
of Columbia (DC) offered optional targeted case management services in 2012.24
Health Homes for Individuals with Chronic Conditions
Under Medicaid, the health home service delivery model is a physician-based or interdisciplinary
team-based approach to the integration of primary care, behavioral health care, and long-term
23 In 1997, Federal Court of Appeals for Second Circuit ruled that home health could be provided outside the home, as
long as services do not exceed the hours of nursing care that would have been provided in the home. Skubel v. Fuoroli,
113 F. 3rd 330 (2d Cir. 1997).
24 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Targeted Case Management, 2012,” at
http://kff.org/medicaid/state-indicator/targeted-case-management/.
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services and supports that focuses on high-cost and/or high-user beneficiaries. According to CMS,
it is expected that the health home service delivery model will result in reductions in health care
costs, including reductions in emergency room use, hospital admissions and re-admissions, and
nursing facility use, as well as improved quality of care and outcomes for the individual.25
Under the optional health home state plan benefit,26 certain Medicaid enrollees with chronic
conditions may designate a health home with the goal of integrating and coordinating primary,
acute, and behavioral (mental health and substance abuse) health care, while providing linkages
to home and community-based LTSS. The Medicaid statute lists certain chronic conditions that
states can target for health home benefits such as mental health, substance abuse, asthma,
diabetes, heart disease and being overweight. CMS may consider additional chronic conditions,
such as HIV/AIDS, subject to the Secretary of Health and Human Services (HHS) approval.
Health home services may include case management, care coordination, health promotion,
transitional care and follow-up, patient and family support, as well as referral to community and
social support services. State Medicaid programs will be reimbursed by the federal government
for health home services at a 90% FMAP rate for the first eight fiscal quarters. States are not
required to provide health home benefits on a statewide basis and may target the benefit to
particular geographic regions. As of June 2014, fifteen states had at least one approved Health
Home SPA; another 12 states and DC had either submitted a SPA to CMS for approval or had a
CMS approved Health Home planning request.27
Intermediate Care Facilities for Individuals with Intellectual Disabilities
(ICFs/ID)
States may provide services to eligible Medicaid beneficiaries residing in Intermediate Care
Facilities for individuals with Intellectual Disabilities (ICFs/ID) as an optional service under a
state’s Medicaid plan. The primary purpose of the ICF/ID is to furnish health and rehabilitative
services to persons with intellectual disabilities or other related conditions.28 ICFs/ID must
provide certain services including nursing, physician, dental, pharmacy, and laboratory services.29
According to CMS, beneficiaries who receive services in an ICF/ID are likely to have other
disabilities or conditions in addition to intellectual disabilities, such as seizure disorders, behavior
issues, and mental illness.30 Medicaid specifies that the ICFs/ID must provide a program of
“active treatment,” as defined by the Secretary of HHS. Federal regulations refer to “active
treatment” as aggressive, consistent implementation of a program of generic and specialized
25 Centers for Medicare & Medicaid Services (CMS), SMDL# 10-024, Home Health for Enrollees with Chronic
Conditions, November 16, 2010.
26 Established under ACA § 2703, which added Section 1945 of the SSA.
27 Centers for Medicare & Medicaid Services (CMS), “State Health Home CMS Proposal Status (effective June 2014),”
http://www.medicaid.gov/State-Resource-Center/Medicaid-State-Technical-Assistance/Health-Homes-Technical-
Assistance/Downloads/HH-MAP_v34.pdf
28 Federal Medicaid law and regulations use the term “intermediate care facilities for the mentally retarded” and
abbreviation “ICFs/MR”; however, federal agencies use the term individuals with “intellectual disability (ID),” which
is the term and abbreviation used in this report.
29 42 C.F.R. § 483.400, subpart I.
30 CMS, http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/Downloads/
ICFMR_Background.pdf.
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training, treatment, and health services.31 In 2012, 47 states and DC offered services in an
ICF/ID.32
Services in Institutions for Mental Diseases (IMDs)
An Institution for Mental Disease (IMD) is defined as a “hospital, nursing facility, or other
institution of more than 16 beds, that is primarily engaged in providing diagnosis, treatment, or
care of persons with mental diseases, including medical attention, nursing care, and related
services.”33 States may provide inpatient hospital and nursing facility services for eligible
beneficiaries aged 65 and over with mental diseases that reside in IMDs under a state’s Medicaid
plan, also referred to as “IMD over 65.” Mental diseases include any diagnoses in the Diagnostic
and Statistical Manual of Mental Disorders, Edition 4, Text Revision (DSM-IV-TR), including
those for substance use and addiction.34 IMD services include diagnosis and medical treatment, as
well as nursing care and related services under the direction of a physician. In 2012, 45 states and
DC offered services in IMDs to individuals age 65 and over.35
Inpatient Psychiatric Care
States may provide inpatient psychiatric care to eligible beneficiaries under age 21, often referred
to as “Psych Under 21.” Services may be provided in psychiatric hospitals, psychiatric units in
general hospitals, as well as psychiatric residential treatment facilities (PRTFs), which provide
comprehensive mental health treatment to children and young adults who, due to mental illness,
substance abuse, or severe emotional disturbance, are in need of short term mental health
treatment. The goal of PRTF programs is to successfully return youth to the community. In 2012,
all states and DC offered inpatient psychiatric care benefit to eligible beneficiaries under age 21.36
31 42 C.F.R. § 483.440.
32 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Intermediate Care Facility Services for
Individuals with Intellectual Disabilities, 2012,” at http://kff.org/medicaid/state-indicator/intermediate-care-facility-
services-for-the-mentally-retarded/.
33 42 U.S.C. 1396d(i)
34 Substance Abuse and Mental Health Services Administration. Medicaid Handbook: Interface with Behavioral Health
Services. HHS Publication No. SMA-13-4773. Rockville, MD: Substance Abuse and Mental Health Services
Administration, 2013.
35 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Inpatient Hospital, Nursing Facility and
Intermediate Care Facility Services In Institutions for Mental Diseases, age 65 and older, 2012,” at http://kff.org/
medicaid/state-indicator/inpatient-hospital-nursing-facility-and-intermediate-care-facility-services-in-institutions-for-
mental-diseases-age-65-and-older/.
36 Psych Under 21 refers to Inpatient psychiatric care to individuals under age 21; Kaiser Family Foundation, “State
Health Facts, Medicaid Benefits: Inpatient Psychiatric Services, under age 21, 2012,” at http://kff.org/medicaid/state-
indicator/inpatient-psychiatric-services-under-age-21/.
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What Is the Medicaid Institution for Mental Diseases Exclusion Rule?
Generally, states are responsible for the costs associated with services provided in an Institution for Mental
Disease (IMD). The IMD exclusion rule prevents federal Medicaid funds from being used to care for
individuals between 21 and 64 years of age who live in an IMD.
Two populations may receive Medicaid coverage for services received in an IMD. Thus, federal Medicaid
matching payments are available for certain eligible beneficiaries in these settings. These populations are (1)
adults age 65 and over; and (2) children under the age of 21 (in general). In the case of children, inpatient
psychiatric care is a Medicaid state plan coverage option (described below), which is mandatory when a
child’s condition is diagnosed through an Early Periodic Screening, Diagnostic and Treatment (EPSDT)
benefit screen.
The IMD exclusion applies to health providers that are IMDs with 17 beds or more that provide
institutionalized services. Thus, health providers may receive federal Medicaid matching funds for partial
hospitalization services and day treatment programs which do not require institutionalization. By definition,
the IMD exclusion does not apply to settings with 16 or fewer beds, and federal Medicaid matching funds
would be available to these providers.
Source: Substance Abuse and Mental Health Services Administration. Medicaid Handbook: Interface with
Behavioral Health Services. HHS Publication No. SMA-13-4773. Rockville, MD: Substance Abuse and Mental
Health Services Administration, 2013.
Personal Care Services
States may offer personal care services as an optional Medicaid state plan benefit. These services
enable older individuals and persons with disabilities or chronic conditions to accomplish certain
activities they would otherwise not be able to accomplish independently.37 Personal care services
include assistance with performing activities of daily living (ADLs) such as eating, bathing,
dressing, toileting, and transferring (from a bed to a chair, etc.). Services may also include
assistance with instrumental activities of daily living (IADLs), which facilitate independent living
in the community, such as providing light housework, laundry, meal preparation, transportation,
and grocery shopping. Assistance may be in the form of hands-on assistance (i.e., actually
performing a task for an individual) or cuing so that the individual performs the task by himself
or herself. For individuals with cognitive impairments, such assistance may also include cuing
and supervision of the task.
States choosing to offer the personal care services benefit must make it available on a statewide
basis. Personal care services must be authorized by a physician or, at state option, otherwise
authorized under a state-approved plan of care. Services are furnished to individuals at home or,
at state option, in other settings (such as a workplace or senior center). Services may not be
provided to individuals who are inpatients or residents of hospitals, nursing facilities,
intermediate care facilities for individuals with intellectual disabilities (ICFs/ID), or psychiatric
institutions. Personal care services must be provided by a qualified provider and may be furnished
by family members, with the exception of legally liable relatives (i.e., spouses or parents of minor
children). Furthermore, the provision of personal care services may be directed by the beneficiary,
including the beneficiary having the ability to hire, train, and supervise personal care attendants.38
In 2012, 30 states and DC covered personal care services under the Medicaid state plan.39
37 As per Section 1905(a)(24) of the SSA; 42 CFR 440.167; and Section 4480 of the State Medicaid Manual at
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021927.html.
38 Section 1915(j) of the SSA expands participant direction for personal care services for states offering such care under
their Medicaid state plan or offering a 1915(c) HCBS waiver program. See section entitled “Self-Directed Personal
(continued...)
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Private Duty Nursing Services
States may offer private duty nursing services to eligible beneficiaries who require greater
individual and continuous care than what is available from a visiting nurse under a home health
benefit or routinely provided by the nursing staff in an institutional setting.40 Similar to skilled
nursing, private duty nursing is more intensive and may cover situations where an individual’s
health care needs require extended care, including 24-hour-a-day coverage. For example, a
beneficiary may be technology-dependent and rely on medical interventions such as mechanical
ventilation, tube feedings, or intravenous medications. Skilled nursing services are provided by a
registered nurse or a licensed practical nurse under the direction of the beneficiary’s physician. At
the option of the state, such services can be provided to a beneficiary in either an institutional
setting such as a hospital or a skilled nursing facility or a community-based setting. In 2012, 22
states and DC covered personal care services under the Medicaid state plan.41
Program for All-Inclusive Care of the Elderly (PACE)
PACE is a voluntary Medicaid and Medicare integration program for dual-eligible beneficiaries
with LTSS needs who receive services in adult day health centers. PACE providers receive
capitated payments from both Medicaid and Medicare to provide a comprehensive package of
covered benefits to individuals age 55 and older who require the level of care offered in a nursing
home. PACE providers assume the risk for expenditures that exceed their capitation payments.
States may elect to provide PACE services to eligible individuals under an agreement with the
PACE provider, HHS Secretary, and the state Medicaid agency.
Covered services include primary care, hospital care, medical specialty services, prescription
drugs, nursing home care, emergency services, home care, physical and occupational therapy,
adult day care, recreational therapy, meals, dentistry, nutritional counseling, social services, and
transportation, among others. Under PACE, an interdisciplinary team of physicians, nurses,
physical therapists, social workers, and other professionals provide all needed health, medical,
and social services, primarily in adult day care settings with in-home and referral services based
on beneficiary needs. The goal is to provide seamless coordinated care to certain low-income
individuals aged 55 and older who would otherwise require nursing home care.42 As of 2014, 105
PACE programs were operational in 31 states.43 Among the 95 sites that reported participation
data, the total number of PACE participants was about 31,000 in 2014. Sites ranged in the number
(...continued)
Care Assistance” below.
39 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Personal Care Services, 2012,” at http://kff.org/
medicaid/state-indicator/personal-care-services/.
40 42 CFR §440.80.
41 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Private Duty Nursing Services, 2012,” at
http://kff.org/medicaid/state-indicator/private-duty-nursing-services/.
42 CMS, Program for All-Inclusive Care of the Elderly (PACE), at http://www.medicaid.gov/medicaid-chip-program-
information/by-topics/long-term-services-and-supports/integrating-care/program-of-all-inclusive-care-for-the-elderly-
pace/program-of-all-inclusive-care-for-the-elderly-pace.html
43 National PACE Association, “PACE in the States,” January 1, 2014, at http://www.npaonline.org/website/
download.asp?id=1741&title=PACE_in_the_States.
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of participants with the smallest site size serving nine participants and the largest site serving over
3,800, with an average of 236 participants per site.44
Rehabilitative Services
States can offer a distinct rehabilitative services benefit as a state plan option that provides
individuals with services related to the rehabilitation of physical or mental health conditions. The
rehabilitative services option is broadly defined as “any medical or remedial services
recommended by a physician or other licensed practitioner of the healing arts, within the scope of
his or her practice under State law, for maximum reduction of physical or mental disability and
restoration of a recipient to his best possible functional level.” States choosing to offer this benefit
must offer it on a statewide basis.
The rehabilitative services option can be provided in community settings, including in an
individual’s home or work environment, and can be provided by professionals and
paraprofessionals. There is no requirement that rehabilitative services be provided under a
physician’s direction. This benefit option is distinct from rehabilitative services offered in
institutional settings such as a Medicaid nursing facility or ICFs/ID. Services provided under the
optional Medicaid rehabilitative benefit span a wide range of treatments from physical
rehabilitation to behavioral health and substance abuse treatment. Often the rehabilitative services
benefit option assists beneficiaries who have mental health conditions.45 States may also utilize
the rehabilitative services option to provide beneficiaries with physical, occupational, and speech
therapy, as well as other comprehensive services to treat and help individuals recover from
substance abuse disorders. In 2012, all states and DC covered rehabilitative services as an
optional benefit under the Medicaid state plan.46
Table 2 shows Medicaid LTSS expenditures for certain mandatory and optional state plan
services for FY2012, which is the most recent year in which these data are available.
Table 2. Medicaid LTSS Expenditures for Selected Mandatory and
Optional State Plan Services, FY2012
Total Medicaid
Payments
Service Type
($ Billions)
Mandatory State Plan Services
Nursing Facility Services
$52.0
Home Health Services
$5.1
Optional State Plan Services
Personal Care Services
$14.1
44 CRS analysis of data from the National PACE Association, “PACE in the States,” January 1, 2014, at
http://www.npaonline.org/website/download.asp?id=1741&title=PACE_in_the_States.
45 Crowley, J.S., and M. O’Malley, Policy Brief; Medicaid’s Rehabilitation Services Option: Overview and Current
Policy Issues, Kaiser Commission on Medicaid and the Uninsured, August 2007.
46 Rehabilitative services include rehabilitation services for mental health and substance abuse; Kaiser Family
Foundation, “State Health Facts, Medicaid Benefits: Rehabilitation Services – Mental Health and Substance Abuse,
2012,” at http://kff.org/medicaid/state-indicator/rehabilitation-services-mental-health-and-substance-abuse/.
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Total Medicaid
Payments
Service Type
($ Billions)
Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICFs/ID)a $12.8
Institutions for Mental Diseases (IMDs)b,c $3.3
Rehabilitative Servicesb $2.9
Case Managementb $2.7
Program for All-Inclusive Care of the Elderly (PACE)
$1.0
Private Duty Nursingb $0.7
Source: Eiken, S., K. Sredl, L. Gold, et al., Medicaid Expenditures for Long-Term Services and Supports in FFY 2012,
Truven Health Analytics, April 2014, based on data primarily identified in CMS- 64 reports and represent total
(federal and state) Medicaid payments. CMS-64 data are supplemented with managed care data col ected directly
from states that have managed LTSS programs.
Notes: For FY2012, Medicaid payment data do not include managed care programs in the fol owing states: CA,
HI, and NM. Data for several states include expenditures for Medicaid Upper Payment Limit (UPL) programs or
provider taxes.
a. Federal Medicaid law and regulations use the term “intermediate care facilities for the mentally retarded”
and abbreviation “ICFs/MR,” however, federal agencies use the term individuals with “intellectual disability
(ID).”
b. Data are for fee-for-service payments to mental health facilities, rehabilitative services, and private duty
nursing and do not include services provided through managed care organizations.
c. An additional $2.5 billion in disproportionate share hospital payments, not reflected in the payment data
above, was provided to mental health facilities.
State Plan HCBS Option (Section 1915(i) of SSA)
Section 1915(i) of the SSA allows states to offer a broad range of HCBS under the Medicaid state
plan. States that choose this optional benefit can cover HCBS for certain eligible Medicaid
beneficiaries without obtaining a Secretary-approved waiver for this purpose. However, eligible
beneficiaries must meet specific financial and needs-based eligibility criteria for the state plan
HCBS Option. To be eligible for the Section 1915(i) benefit, Medicaid beneficiaries’ incomes
must be less than or equal to 150% of the federal poverty level (FPL, $1,459 per month for an
individual in 2014).47 In addition, they must have a level-of-care need that is less than the level of
care required in an institution. States may extend eligibility for the Section 1915(i) benefit to
beneficiaries with incomes up to 300% of the maximum Supplemental Security Income (SSI)
benefit ($2,163 per month for an individual in 2014)48 for those eligible for HCBS under home
and community-based waiver programs.49 For eligible beneficiaries who meet this higher
financial eligibility threshold and waiver criteria, their level-of-care need may have to meet the
level of care provided in an institution.50
47 CMS, “2014 Poverty Guidelines,” at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Eligibility/Downloads/2014-Federal-Poverty-level-charts.pdf.
48 SSA, “2014 Fact Sheet,” at http://www.ssa.gov/pressoffice/factsheets/colafacts2014.pdf.
49 Includes Medicaid waiver programs authorized under Section 1115 of the SSA or Sections 1915(c), (d) or (e) of the
SSA.
50 States may also create a new Section 1915(i) eligibility pathway into Medicaid to increase access to HCBS for
individuals who need a lower level of care than is provided in an institution. States may extend full Medicaid benefits
(continued...)
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The HCBS state plan option allows states to tailor different benefit packages to certain groups of
beneficiaries. States can make this option available to specific populations and can vary the
benefit package, as well as the amount, duration or scope of the benefits for each of these
populations. Such elections are for five-year periods (i.e., an initial five-year period and
subsequent five-year renewal periods). States must offer benefit packages statewide and may not
cap the number of beneficiaries receiving state plan HCBS. To help states manage enrollment,
Medicaid law allows states to modify their needs-based criteria without obtaining prior approval
from the HHS Secretary.
In the design of each benefit package, states may choose from the same list of services offered
under a Section 1915(c) HCBS waiver program (see Table 4 under “Section 1915(c) HCBS
Waivers” for a general description of these services). The list includes services such as case
management, home-maker/home health aide, personal care, adult day health, habilitation, and
respite care. For individuals with chronic mental illness states may provide day treatment, other
partial hospitalization services, psychosocial rehabilitation services, and clinic services (whether
or not furnished in a facility). Similar to Section 1915(c) waivers, states have the ability to name
and define Section 1915(i) services, as well as identify and define other services, subject to HHS
Secretary approval. This flexibility has led to state variation in naming conventions and service
definitions across HCBS state plan and waiver services.
In addition, states may seek HHS Secretary approval to offer other services, with the exception of
room and board. Section 1915(i) services must be provided in a home and community-based
setting.51 For FY2013, eleven states reported having a Section 1915(i) state plan HCBS option in
place; another 9 states reported plans to implement one in either FY2014 or FY2015.52
Self-Directed Personal Care Assistance (Section 1915(j) of SSA)
Section 1915(j) of the SSA authorizes states to provide self-directed personal care assistance
services (PAS), which include personal care and related home and community-based services.
States can provide self-directed options either under a state’s Medicaid State plan, if personal care
is an existing state plan benefit option, and/or an existing Section 1915(c) HCBS waiver.
Participation in self-directed PAS is voluntary and states may limit the number of individuals who
self-direct. States are not required to provide self-directed PAS on a statewide basis and may
target the benefit to particular geographic regions. States have the option to disburse cash
prospectively to participants who direct their PAS. States also have the option to allow
participants to hire legally liable relatives to provide care (such as spouses or parents) and
purchase non-traditional goods and services that increase independence or substitute for human
assistance other than personal care. An eligible participant’s service plan is based on an
assessment of need for PAS and developed with a person-centered and directed planning process.
In FY2012, six states participated in the Section 1915(j) PAS state plan option.53
(...continued)
to this new eligibility group.
51 See footnote 131.
52 Vernon K. Smith, K. Gifford, E. Ellis, et al. Medicaid in an Era of Health & Delivery System Reform: Results from a
50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015, Kaiser Family Foundation and the National
Association of Medical Directors, October 2014, p. 33, at http://files.kff.org/attachment/medicaid-in-an-era-of-health-
delivery-system-reform-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2014-and-2015-report.
53 Eiken, S., K. Sredl, L. Gold, et al., Medicaid Expenditures for Long-Term Services and Supports in FFY 2012,
(continued...)
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Community First Choice Option (Section 1915(k) of SSA)
Section 1915(k) of the SSA, the Community First Choice (CFC) Option, allows states to offer
community-based attendant services and supports as an optional Medicaid state plan benefit and
receive an increased FMAP rate of 6 percentage points for doing so.54 Eligible beneficiaries
include those who are (1) eligible for medical assistance under the state plan and (2) in an
eligibility group under the state plan that covers nursing facility services or, if not in such group,
have an income that is at or below 150% of FPL. Individuals must also meet institutional level-
of-care criteria to be eligible for CFC services.55 States must provide these services on a statewide
basis and in the most integrated community-based setting in which individuals with disabilities
interact with non-disabled individuals.
Community-based attendant services and supports include attendant services and supports to
assist eligible individuals in accomplishing ADLs, IADLs, and health-related tasks. Such services
must be delivered under a person-centered plan of care in which attendants are selected, managed,
and dismissed by the recipient (or his or her representative). Attendants must be qualified to
deliver such services and may include family members (as defined by the HHS Secretary). This
state plan benefit may also fund transition expenses when a beneficiary moves from a nursing
facility to a community-based setting. Such expenses might include security deposits for an
apartment or utilities, bedding, and basic kitchen supplies, among other expenses necessary to
accomplish the transition. Additionally, states may provide services that increase independence or
substitute for human assistance, such as non-medical transportation or purchasing a microwave
oven.56
Additional requirements for states who offer the CFC optional benefit include (1) collaborating
with a state-established Development and Implementation Council; (2) establishing and
maintaining a comprehensive, continuous quality assurance system; and (3) collecting and
reporting information for federal oversight and evaluation. In the first full fiscal year in which the
state plan benefit is implemented, states must maintain or exceed the preceding fiscal year’s
Medicaid expenditures for individuals with disabilities or elderly individuals. For FY2013, one
state (California) reported having a CFC option in place; another nine states were in the planning
process to implement this option in either FY2014 or FY2015.57
(...continued)
Truven Health Analytics, April 2014, at p. 13 and Tables S and T, http://www.medicaid.gov/Medicaid-CHIP-Program-
Information/By-Topics/Long-Term-Services-and-Supports/Downloads/LTSSExpendFFY2012_Final.pdf.
54 CMS issued a final rule on the CFC Option, see Department of Health and Human Services, “Medicaid Program;
Community First Choice; Proposed Rule,” 77 Federal Register 26362-26406, May 7, 2012. The rule did not finalize
requirements regarding CFC settings, these requirements were finalized in a subsequent rule published January 16,
2015, see Department of Health and Human Services, “Medicaid Program; State Plan Home and Community-Based
Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Home and Community-Based Setting
Requirements for Community First Choice and Home and Community-Based Services (HCBS) Waivers; Final Rule,”
79 Federal Register 2948-3039, January 16, 2014.
55 Ibid., p. 26837.
56 Ibid., p. 26828.
57 Vernon K. Smith, K. Gifford, E. Ellis, et al. Medicaid in an Era of Health & Delivery System Reform: Results from a
50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015, Kaiser Family Foundation and the National
Association of Medical Directors, October 2014, p. 33, at http://files.kff.org/attachment/medicaid-in-an-era-of-health-
delivery-system-reform-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2014-and-2015-report.
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Home and Community Care for Functionally Disabled Elderly Individuals
(Section 1929 of SSA)
Section 1929 of the SSA allows states to provide home and community care services for
Medicaid beneficiaries, aged 65 or over, who are determined to be functionally disabled and are
eligible for Medicaid coverage.58 Eligible beneficiaries can only receive covered home and
community care benefits and are not eligible for full Medicaid state plan benefits. Services must
be furnished in accordance with an individual community care plan that is reviewed and revised
by a qualified community care case manager. Under this authority, states may cover one or more
of the following services: homemaker/home health aide services, chore services, personal care,
nursing care, respite care, training for family members in managing the individual’s care, and
adult day care. For individuals with chronic mental illness, states may cover day treatment or
other partial hospitalization services, psychosocial rehabilitation services, and clinic services.
States may waive the “statewideness” requirement under this section. States may also cover other
services approved by the HHS Secretary, with the exception of room and board. Federal matching
payments to participating states may not exceed 50% of the aggregate amount that would have
been spent to provide Medicare skilled nursing facility services to persons receiving home and
community care. Federal matching payments can also be reduced if the state fails to maintain
levels of certain nonfederal expenditures. Texas offers personal care services under Section 1929
and is the only state that uses this Medicaid statutory authority.59
Table 3 compares key features of selected options states have to provide HCBS under Medicaid.
Section 1915(c) waivers are discussed in greater detail under the section entitled “Medicaid
Waivers.” These HCBS options are illustrative of the variation that exists within the Medicaid
program for covering LTSS. Thus, while states may offer the same services, whether these
services are offered as state plan or waiver services may determine whether all Medicaid
beneficiaries have access to these services statewide or to a specific geographic area.
In addition, states that choose to offer HCBS under either the Section 1915(c) waiver or Section
1915(i) HCBS state plan authority have discretion in determining the HCBS benefit package,
including the service type and definition. Thus, states may use different terms to refer to the same
types of service, and similarly named services may be defined differently across waiver programs
within a state as well as across states. For example, states may refer to personal care services as
personal attendant services, personal assistance services, or attendant care services. This program-
level variation makes it difficult to summarize and compare state Medicaid HCBS offerings both
within a state and nationally.
58 Generally, states are not permitted to apply the more liberal financial standards that states may use for persons served
under Section 1915(c) waiver programs (i.e., 300 percent of the SSI benefit) unless they discontinue their wavier
programs and provide coverage to such waiver participants under this new optional benefit.
59 Texas Department of Aging and Disability Services, Balancing Incentive Program Application, June 2012,
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Long-Term-Services-and-Supports/
Balancing/Downloads/Texas-Application.pdf.
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Table 3. Key Features of Selected Coverage of HCBS Under Medicaid
Sec. 1915(k)
Optional HCBS
Sec. 1915(c) HCBS
Sec. 1915(i) HCBS
Community First
Feature
State Plan Benefits
Waiver
State Plan Benefits
Choice State Plan
Benefits
Benefit
States must provide
States can target
States can target
States must provide
Eligibility
services to all
services to specific
services to specific
services to all
categorically eligible
populations (e.g., age
populations (e.g., age
individuals who are
individuals who are
and diagnosis) who
and diagnosis), but must enrolled in Medicaid in
enrolled in Medicaid
meet the needs-based
provide services to all
an eligibility group
and meet the needs-
criteria, and can limit
individuals in an
under the state plan
based criteria
the number of people
eligibility group who
that covers nursing
served
meet the applicable
facility services or, if
financial and needs-
not in such group, have
based criteriaa
an income that is at or
below 150% of FPL.
Individuals must also
meet the needs-based
criteria
Geographic
Services must be
Services can be limited
Services must be
Services must be
Criteria
available statewide
to certain geographic
available statewide
available statewide
area(s)
Needs-
Beneficiaries must have
Beneficiaries must meet Beneficiaries must meet Beneficiaries must meet
Based
functional limitations
institutional level-of-
needs-based criteria
institutional level-of-
Eligibility
that result in the need
care criteria
that are less stringent
care criteria
Criteria
for covered services, as
than institutional level-
specified by the state
of-care criteria
Beneficiaries eligible for
certain approved
waiver programs with
income that does not
exceed 300% of the
maximum SSI income
eligibility standard may
also have to meet
institutional level-of-
care criteria
Coverable
Only federally specified
A broad array of state-
Same as Section
Coverage includes
Services
services for each of the
defined services, some
1915(c) HCBS waiver
personal care attendant
following: personal
of which are specified
services and supports
care, private duty
in federal statute, such
and may include
nursing, case
as adult day health, case
transition costs (e.g.,
management, and
management,
first month’s rent,
rehabilitative services
habilitation,
utilities) and services
homemaker, home
that improve
health aide, personal
independence or
care, respite care, and
substitute for human
other Secretary
assistance, such as non-
approved servicesb
medical transportation
services
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Sec. 1915(k)
Feature
Optional HCBS
Sec. 1915(c) HCBS
Sec. 1915(i) HCBS
Community First
State Plan Benefits
Waiver
State Plan Benefits
Choice State Plan
Benefits
Permits
Relatives who are not
Relatives, including
Same as Section
Same as Section
Payment of
legally responsible may
those legally
1915(c) HCBS waiver
1915(c) HCBS waiver
Relatives
provide personal care
responsible, may be
paid to provide
personal care and other
services under specific
circumstances as
determined by the state
FMAP Rate
Regular state FMAP
Regular state FMAP
Regular state FMAP
6% enhanced state
rate
rate
rate
FMAP ratec
Subject to
No
Yes, initial term of
Yes, renewable every
No
Renewal
three years, renewable
five years
for five-year periodsd
Source: CRS analysis, adapted from HHS, Understanding Medicaid Home and Community-Services: A Primer, 2010,
Table 4-2, pg. 110.
Notes: Personal care services are also referred to as personal attendant services, personal assistance services,
or attendant care services. FMAP refers to the federal medical assistance percentage, which determines the
federal share for most Medicaid service costs.
a. States may also create a new Section 1915(i) eligibility pathway into Medicaid to increase access to HCBS
for individuals who need a lower level of care than is provided in an institution. States may extend full
Medicaid benefits to this new eligibility group.
b. For individuals with chronic mental illness, the HHS Secretary may also approve the following services: day
treatment or other partial hospitalization services, psychosocial rehabilitation services, and clinic services
(whether or not furnished in a facility).
c. The Section 1915(k) CFC enhanced FMAP rate is the state’s regular FMAP rate plus 6 percentage points.
d. Per January 16, 2014 final rule (79 Federal Register 2948-3039), states may request an initial period of five
years if the waiver includes individuals who are dually eligible for Medicare and Medicaid.
Medicaid Waivers
Medicaid law also provides the HHS Secretary with authority to offer a broad range of home and
community-based services (HCBS) to individuals with disabilities of all ages under Medicaid
“waiver” programs. The term Medicaid “waiver” is so-named because states may request that the
HHS Secretary waive certain statutory requirements that would normally apply to services
covered under their Medicaid state plans. The most common waiver authority states use to
provide HCBS to Medicaid beneficiaries is the Section 1915(c) waiver authority, named for the
section of Medicaid law in which it is authorized. Individuals served under Section 1915(c)
waiver programs live in a community-based setting but require the level of care offered in an
institution. Some states also use the waiver authority under SSA Section 1115, Research and
Demonstration Projects, to cover HCBS. These waiver options are described in greater detail
below.
Section 1915(c) waivers, often referred to as HCBS waivers, and are designed to expand
opportunities for states to provide home and community-based care to additional groups of
persons with LTSS needs while containing costs. Under this authority, states with approved
applications may provide home and community-based care to persons who, without these
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services, would require Medicaid-covered institutional care. Section 1915(c) waivers permit
states to cover services that go beyond the medical and medically related benefits that have been
the principal focus of the Medicaid program. States can also cover a wide variety of nonmedical,
social, and supportive services that allow individuals to live independently in the community.
The Medicaid statute specifies a broad range of services that states may provide to waiver
participants. These services include case management, homemaker/home health aide, personal
care, adult day health, habilitation, rehabilitation, and respite care. States also have flexibility to
offer additional services when approved by the HHS Secretary. For the chronically mentally ill,
Section 1915(c) authorizes states to cover day treatment or other partial hospitalization services,
psychosocial rehabilitation services, and clinic services (whether or not furnished in a facility).
Section 1915(c) waivers may not cover room and board in a community-based setting, such as an
assisted living facility.
For a general description of the types of services covered under Section 1915(c) waivers, see
Table 4. Note that states have the ability to name and define Section 1915(c) waiver services, as
well as identify and define other services subject to HHS Secretary approval. Thus, there is
tremendous state-to-state variation in naming conventions and service definitions across Section
1915(c) waiver programs.
Table 4. Covered Medicaid Services Under Section 1915(c) Home and Community-
Based Services (HCBS) Waiver Programs
Service
General Service Description
Adult Day Health
Services furnished on a regularly scheduled basis for four or more hours per day,
one or more days per week, in a non-institutional, community-based setting that
encompasses both health and social services needed to ensure the optimal
functioning of the individual.
Case management
Services that assist individuals in gaining access to needed waiver and other state
plan benefits, as well as needed medical, social, educational and other services,
regardless of the funding source.
Habilitation
Services designed to assist individuals in acquiring, retaining and improving the self-
help, socialization and adaptive skills necessary for individuals to reside successfully in
home and community-based settings. May include the following types of habilitation:
residential habilitation, day habilitation, certain prevocational services, certain
educational services, and supportive employment services.
Homemaker
Services that consist of the performance of general household tasks (e.g., meal
preparation and routine household care) provided by a qualified homemaker, when
the individual regularly responsible for these activities is temporarily absent or
unable to manage such activities.
Home Health Aidea
Services defined in 42 CFR §440.70 that are provided in addition to home health aide
services furnished under the approved state plan or are provided when home health
aide services furnished under the approved state plan limits are exhausted.
Personal Careb
Services to assist with activities of daily living (ADLs) such as eating, bathing,
dressing, and personal hygiene. May include assistance with preparation of meals, but
does not include the cost of the meals themselves. When specified in the plan of
care, this service may also include housekeeping chores which are incidental to the
care furnished, or which are essential to the health and welfare of the individual.
Respite Care
Services provided to individuals unable to care for themselves that are furnished on a
short-term basis because of the absence or need for relief of those persons who
normally provide care.
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Other (Secretary approved) Other specified services under the waiver program may include home modifications,
skilled nursing services, non-medical transportation, specialized medical equipment
and supplies, personal emergency response systems, adult foster care, and assisted
living services, among others.
Source: Section 1915(c) HCBS Waiver Application Instructions, Appendix C: Participant Services, at
http://157.199.113.99/WMS/help/35/appInstrSecC.html. Covered services are those listed in Section
1915(c)(4)(B) of the SSA. For individuals with chronic mental illness, the HHS Secretary may also approve the
following services: day treatment or other partial hospitalization services, psychosocial rehabilitation services,
and clinic services (whether or not furnished in a facility).
a. Home health services are a mandatory state plan service. Home health aide services are a component of the
state plan coverage. In a waiver, a state may elect to furnish home health aide services that are different in
their scope and nature than the services offered under the state plan.
b. Personal care services are an optional benefit that a state may furnish under its state plan, as provided in 42
CFR §440.167. A state may offer personal care under a waiver when (a) it does not offer personal care
under its state plan; (b) its coverage under the waiver differs in scope and nature from the coverage under
the state plan; or (c) the state wishes to furnish personal care services in an amount, duration, or frequency
that exceeds the limits in the state plan.
States must target a Section 1915(c) waiver to a specific population, such as individuals under age
65 with physical disabilities, individuals with intellectual or developmental disabilities,
individuals ages 65 and older, or individuals with mental illness. As a result, states typically have
more than one approved Section 1915(c) waiver, with each waiver program offering a specialized
package of HCBS to a specific population. On January 16, 2014 CMS released a final rule that
provides states the option to combine target groups within one waiver program.60 Prior to this
change, a Section 1915(c) waiver could only serve one of the following three target groups: (1)
older adults, individuals with disabilities, or both; (2) individuals with intellectual disabilities,
developmental disabilities, or both; or (3) individuals with mental illness. Whether states use this
flexibility to combine waiver target groups into one waiver program, which may reduce the total
number of waiver programs both across states and within a state, remains to be seen. Eligible
waiver participants must meet certain financial requirements (including income and resource
requirements) and state-defined level-of-care criteria that demonstrate the need for LTSS. That is,
individuals must have a level of need for LTSS that would otherwise be covered under a
Medicaid institutional benefit, such as nursing facility care, Intermediate Care Facility for the
Individual with Intellectual Disabilities (ICF/ID), or hospital care.
Under Section 1915(c), the HHS Secretary has the authority to waive Medicaid’s “statewideness”
requirement to allow states to offer HCBS in a limited geographic area. The HHS Secretary may
also waive the “comparability” requirement that services be comparable in amount, duration, or
scope for individuals in particular eligibility categories. States may use the Section 1915(c)
waiver to limit the number of individuals served by capping enrollment. The Section 1915(c)
waiver is time limited and waiver approvals are subject to reporting and evaluation requirements.
State-approved Section 1915(c) waivers must also meet a “cost-neutrality” test where average
Medicaid expenditures for waiver participants cannot exceed institutional care expenditures that
would have been incurred absent the waiver. A majority of states with Section 1915(c) waivers
(88%) use cost-containment strategies in addition to the federally mandated cost neutrality
requirement, such as fixed expenditure caps either applied to individual participants or in
60 Department of Health and Human Services, “Medicaid Program; State Plan Home and Community-Based Services,
5-Year Period for Waivers, Provider Payment Reassignment, and Home and Community-Based Setting Requirements
for Community First Choice and Home and Community-Based Services (HCBS) Waivers; Final Rule,” 79 Federal
Register 2948-3039, January 16, 2014.
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aggregate as well as service limitations, and geographic limits.61 Expenditures under these
waivers are matched at the state’s regular FMAP rate.
In 2010, more than 1.4 million Medicaid beneficiaries were receiving services under Section
1915(c) HCBS waivers.62 At that time, 47 states and DC offered at least one Section 1915(c)
HCBS waiver, with states generally offering multiple waivers targeting HCBS to different groups.
Nationwide, there were 284 Section 1915(c) HCBS waivers active in 2010.63 For FY2012,
Medicaid expenditures for Section 1915(c) HCBS waivers were $39.3 billion.64 The majority of
waivers target the aged and disabled populations (49%), followed by waivers for individuals with
intellectual and developmental disabilities (I/DD, 40%), with the remaining 11% targeting other
populations such as persons with physical disabilities, children with special health care needs, and
individuals with traumatic brain injuries, HIV/AIDS, and mental health needs.65
Section 1915(d) HCBS Waivers for the Elderly
States may provide comprehensive HCBS to elderly persons at risk of needing nursing home care
under Section 1915(d) Medicaid waiver authority. Like Section 1915(c) HCBS waivers, states
may waive the Medicaid statewideness and comparability requirements to target services to
individuals whom they believe can be served effectively in the community. States can provide
case management, homemaker/home health aide services, personal care, adult day health
services, respite care, and other medical and social services that can contribute to the health and
well-being of individuals and that also facilitate their ability to reside in the community.
Section 1915(d) waiver authority differs from the Section 1915(c) HCBS authority in two
respects. First, the target population is limited to persons 65 years of age and older who, without
HCBS, would require nursing home care that would be paid for by Medicaid. Second, Section
1915(d) establishes a cap or ceiling on the total amount that states may spend for Medicaid
institutional and HCBS for individuals age 65 and older. According to CMS, no state elects to
provide services under Section 1915(d) HCBS waiver authority.66
61 Terrance Ng, Charlene Harrington, MaryBeth Musumeci, et al. Medicaid Home and Community-Based Services
Programs: 2010 Data Update, Kaiser Commission on Medicaid and the Uninsured (KCMU), March 2014, p. 11, at
http://kff.org/report-section/medicaid-home-and-community-based-services-programs-2010-data-update-introduction/.
62 Ibid, p. 1.
63 Ibid. AZ, RI, and VT do not offer Section 1915(c) HCBS waivers and instead operate their entire Medicaid LTSS
programs under Section 1115 demonstration waiver authority.
64 Eiken, S., K. Sredl, L. Gold, et al., Medicaid Expenditures for Long-Term Services and Supports in FFY 2012,
Truven Health Analytics, April 2014, Table A, at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-
Topics/Long-Term-Services-and-Supports/Downloads/LTSSExpendFFY2012_Final.pdf.
65 Terrance Ng, Charlene Harrington, MaryBeth Musumeci, et al. Medicaid Home and Community-Based Services
Programs: 2010 Data Update, Kaiser Commission on Medicaid and the Uninsured (KCMU), March 2014, p. 9, at
http://kff.org/report-section/medicaid-home-and-community-based-services-programs-2010-data-update-introduction/.
66 Department of Health and Human Services, “Medicaid Program; State Plan Home and Community-Based Services,
5-Year Period for Waivers, Provider Payment Reassignment, and Home and Community-Based Setting Requirements
for Community First Choice and Home and Community-Based Services (HCBS) Waivers; Final Rule,” 79 Federal
Register 2948-3039, January 16, 2014, p. 2956, fn 4.
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Section 1915(e) HCBS Waivers for Certain Children
States may cover HCBS for certain children infected with HIV/AIDS or who are drug dependent
at birth. Under Section 1915(e) authority, states may provide services to such children under age
5 who are receiving or are expected to receive federally funded adoption or foster care assistance.
Also, it must be determined that the child requires the level of care provided by a hospital or
nursing facility. Like Section 1915(c) HCBS waivers, states are authorized to waive the Medicaid
statewideness and comparability requirements. Services that states may provide under this waiver
program include nursing care, physician services, respite care, prescription drugs, medical
devices and supplies, transportation, and any other service requested by the state and approved by
the HHS Secretary. Similar to Section 1915(c) waivers, Section 1915(e) waivers must meet a
“cost-neutrality” test. According to CMS, no state elects to provide services under Section
1915(e) HCBS waiver authority.67
Section 1115 Research and Demonstration Projects
Section 1115 provides the HHS Secretary with broad authority to waive certain statutory
requirements, thus allowing states to conduct research and demonstration projects under several
programs authorized by the SSA, including Medicaid. Under Section 1115, the HHS Secretary
may waive Medicaid requirements contained in Section 1902 of the SSA including, but not
limited to, “freedom of choice” of provider, “comparability” of services, and “statewideness.”
The HHS Secretary may also use Section 1115 waiver authority to provide federal funds for costs
that are not otherwise matched under Section 1903 of the SSA.68 States must submit proposals
outlining terms and conditions for proposed waivers to CMS and receive approval before
implementing these programs.
Expenditures under approved Section 1115 waivers are financed through federal and state
matching funds at the regular FMAP rate. However, unlike traditional Medicaid, costs associated
with Section 1115 waiver programs must be “budget neutral” to the federal government over the
life of the waiver program. To meet the budget neutrality test, estimated spending under the
waiver cannot exceed the estimated cost of the state’s existing Medicaid program. For example,
costs associated with an expanded population (e.g., those not otherwise eligible under Medicaid),
must be offset by spending reductions elsewhere within the Medicaid program. Several methods
are used by states to generate cost savings for such waivers such as (1) limiting benefit packages
for certain eligibility groups; (2) providing targeted services to certain individuals so as to divert
them from full Medicaid coverage; and (3) using enrollment caps and beneficiary cost-sharing to
reduce the amounts states must pay. Section 1115 waivers are time limited and approvals are
subject to reporting and evaluation requirements.69
Some states use Section 1115 waivers, either in addition to or in lieu of Section 1915(c) HCBS
waivers, to provide HCBS to targeted populations. Compared to Section 1915(c) HCBS waivers,
the use of Section 1115 waivers offers states some additional flexibilities in the design of the
67 Ibid.
68 SSA Section 1903 describes the conditions under which federal financial participation is available. SSA Section
1115(a)(2) stipulates that expenditures under a waiver are eligible for matching under Section 1903.
69 SSA Section 1115 waiver projects are generally approved for a five-year period, however, states may seek up to a
three-year extension for their existing waiver program. The approval process associated with each type of extension is
defined in statute at Section 1115(e) and at Section 1115(f), respectively.
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HCBS benefit package, the organization of payments for services, and/or the delivery of care. For
example, some states have used Section 1115 waivers to provide HCBS services to beneficiaries
under managed care. Other states have used such waivers to allow beneficiaries to self-direct their
LTSS by providing them with an individual budget to directly purchase services and hire legally
responsible family members (e.g., spouse or parent) to provide care. A state may obtain approval
for these practices and a variety of other self-directed activities under a Section 1115 waiver,
including (1) changing the Medicaid eligibility requirements (e.g., allowing an individual to have
more income and still qualify for Medicaid); or (2) waiving the requirement that the state only
pay those agencies, or practitioners, that have provider agreements with the state.
As of 2013, three states (Arizona, Rhode Island, and Vermont) use Section 1115 waivers to
administer statewide Medicaid programs that include HCBS instead of Section 1915(c) HCBS
waivers. Five states (Delaware, Hawaii, New York, Tennessee, and Texas) use Section 1115
waivers for Medicaid managed care programs that include HCBS for certain populations and/or
specific geographic areas in their states. These states also use Section 1915(c) HCBS waivers for
other home and community-based services.70 For FY2012, Medicaid expenditures for HCBS
authorized under Section 1115 and other managed care authorities were almost $1.9 billion.71
Other Medicaid HCBS Financing Incentives
Congress has also enacted grant and demonstration projects that provide states with financial
incentives to expand access to HCBS through their Medicaid LTSS delivery systems while
decreasing coverage of institutional care, such as the Money Follows the Person and Balancing
Incentive Payment Program. These delivery models and financing incentives are described below.
See Appendix B, Table B-3 for state participation in these two grant activities.
Money Follows the Person (MFP) Rebalancing Demonstration
Section 6071 of the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) established the Money
Follows the Person (MFP) Rebalancing Demonstration grant program, which appropriated $1.75
billion in funding through FY2011 for states to transition current institutionalized individuals into
community residential settings with the goal of increasing the use of Medicaid HCBS. The ACA
extended the MFP Rebalancing Demonstration for an additional five years, through September
30, 2016, and appropriated an additional $2.25 billion ($450 million for each of FYs 2012
through 2016).72,73 The MFP Rebalancing Demonstration is administered by CMS.
70 Terrance Ng, Charlene Harrington, MaryBeth Musumeci, et al. Medicaid Home and Community-Based Services
Programs: 2010 Data Update, Kaiser Commission on Medicaid and the Uninsured (KCMU), March 2014, p. 2, at
http://kaiserfamilyfoundation.files.wordpress.com/2014/03/7720-07-medicaid-home-and-community-based-services-
programs_2010-data-update1.pdf.
71 Eiken, S., K. Sredl, L. Gold, et al., Medicaid Expenditures for Long-Term Services and Supports in FFY 2012,
Truven Health Analytics, April 2014, at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Long-Term-Services-and-Supports/Downloads/LTSSExpendFFY2012_Final.pdf. Also includes Medicaid HCBS
expenditures under managed care authorities under SSA Sections 1915(a) and 1932(a).
72 Any funds remaining at the end of each fiscal year carry over into the next fiscal year, and can be used by CMS to
make grant awards to current and new grantees until FY2016. Grant awards are available to states for the fiscal year in
which they received the award, and 4 additional fiscal years. Thus, any unused grant funds awarded in FY2016 can be
used until FY2020.
73 Sec. 2403 of the ACA also expanded eligibility by reducing the length of stay requirement in an inpatient facility
(continued...)
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Under the MFP Rebalancing Demonstration, the HHS Secretary is authorized to award
competitive grants to states to meet the following statutory objectives:74
• Rebalancing—Increase the use of home and community-based care, rather than
institutional, long-term care services.
• Money follows the person—Eliminate barriers or mechanisms, whether in the
state law, the state Medicaid plan, 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 in the settings
of their choice.
• Continuity of service—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.
Quality assurance and quality improvement—Ensure that procedures are in place (at least
comparable to those required under the applicable HCBS program) to provide quality assurance
for eligible individuals receiving Medicaid HCBS and to provide for continuous quality
improvement in such services.
To receive an MFP grant, an eligible state must submit an application to CMS for approval.
Among other requirements, individuals eligible to participate in the MFP Rebalancing
Demonstration must be (1) a resident in an inpatient facility in which they have been residing in
for not less than 90 consecutive days; (2) receiving Medicaid benefits for inpatient services
furnished by such an inpatient facility; and (3) continuing to require the level of care provided in
an inpatient facility. Medicare-covered short-term rehabilitative services are excluded from
counting toward the 90-day durational period. For each eligible beneficiary who is transitioned
from an institution to the qualified community-based setting during the demonstration period, the
MFP Rebalancing Demonstration provides the state Medicaid program an increased FMAP rate
for 12 months.75 After this period, the state must continue to provide HCBS for as long as the
beneficiary is Medicaid eligible and needs community-based services.
In 2007, CMS awarded over $1.4 billion in grant funding to 30 states and DC.76 As of December
2013, 44 states and DC received grants.77 Among the 45 grant recipients, 41 states and DC were
actively transitioning participants; 2 states were in the program planning stage; and 1 state had an
inactive program (i.e., the state was not transitioning individuals at that time). According to
Mathematica Policy Research, after six full years of implementation (January 2008 to December
(...continued)
from at least six months to at least 90 consecutive days. This provision also removed the maximum length of stay of not
more than two years in an inpatient setting.
74 Sec. 6071(a)(1)-(4) of the DRA.
75 The enhanced FMAP rate available under the MFP Rebalancing Demonstration is equal to the state’s regular FMAP
rate, subtracted from 100 percent, divided in half, and added to the regular FMAP rate. The maximum enhanced FMAP
rate available under the demonstration is 90%.
76 CMS, Money Follows the Person (MFP) Rebalancing Demonstration Fact Sheet, June 2007, at http://www.cms.gov/
Regulations-and-Guidance/Legislation/DeficitReductionAct/downloads/MFP_FactSheet.pdf.
77 Florida and New Mexico were awarded MFP grants but later rescinded them. State data obtained from CMS at
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Long-Term-Services-and-Supports/
Balancing/Money-Follows-the-Person.html.
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2013), almost 41,000 individuals had received assistance in moving from institutional settings
into the community.78
Balancing Incentive Payments Program
The ACA also established the four-year Balancing Incentive Payments (BIP) Program.79 The BIP
Program authorizes CMS to provide incentive payment grants to qualifying state Medicaid
programs for increasing their share of LTSS spending on HCBS while reducing their spending on
LTSS institutional care. To be eligible to receive payments, states must have spent less than 50%
of total Medicaid medical assistance spending on non-institutionally based LTSS for FY2009.
Specifically, if states spent less than 25% on non-institutionally based LTSS in FY2009, states
must achieve a 25% target on HCBS by October 1, 2015, in order to receive bonus payments.
Such states will receive an FMAP rate increase of 5 percentage points on eligible medical
assistance payments. States that spent at least 25% but less than 50% on non-institutionally based
LTSS in FY2009 will be required to reach a target of 50% by October 1, 2015, to qualify for
payments. These states will receive an FMAP rate increase of 2 percentage points for eligible
payments. The aggregate amount of payments made by the HHS Secretary under the BIP program
to states must not exceed $3 billion over the BIP period which began October 1, 2011, and ends
on September 30, 2015.
To receive incentive payments, a state must submit an application to CMS for approval that meets
programmatic and structural reform requirements and achieves the target spending percentage
applicable to the state. For states proposing to expand the Section 1915(i) HCBS option, the
application must include a description of the state’s election to increase the eligibility level above
150% of the FPL ($1,459 per month for an individual in 2014)80 to a percentage not exceeding
300% of the SSI benefit rate ($2,163 per month in 2014 for an individual).81 The application must
include a description of the new or expanded offering of those services that the state will provide
and the projected costs of such services. To qualify for incentive payments, states may not apply
more restrictive eligibility standards, methodologies, or procedures than were in effect on
December 31, 2010. In addition, states must agree to use additional incentive payments for new
or expanded offerings of HCBS services under Medicaid.82 States must also collect data from
providers and others on services, quality, and outcomes.
Further, states must agree to implement the following structural changes:
78 Eric Morris, Bailey G. Orshan, Noelle Denny-Brown, et al., Money Follows the Person Demonstration: Overview of
State Grantee Progress, July to December 2013, September 2014, p. 1, at http://www.mathematica-mpr.com/~/media/
publications/PDFs/health/mpf_july-dec2013_progress_a.
79 Sec. 10202 of the ACA.
80 CMS, “2014 Poverty Guidelines,” at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Eligibility/Downloads/2014-Federal-Poverty-level-charts.pdf.
81 SSA, “2014 Fact Sheet,” at http://www.ssa.gov/pressoffice/factsheets/colafacts2014.pdf.
82 The increased FMAP rate is applicable to expenditures for HCBS provided under several Medicaid authorities,
including (a) the home health care and personal care state plan benefits, (b) Section 1915(c) HCBS waivers, (c) Section
1915(i) HCBS state plan option, and (d) Section 1915(k) CFC state plan option. According to CMS, the enhanced
FMAP rate available under the BIP can be added to the enhanced FMAP rate available under CFC but not Money
Follows the Person (Source: GAO, Medicaid: States’ Plans to Pursue New and Revised Options for Home-and
Community-Based Services, GAO- 12-649, June 2012, p. 13, footnote 23, http://www.gao.gov/assets/600/591560.pdf).
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• No wrong-door single entry point system—a statewide system enabling
consumers to access all LTSS through an agency, organization, coordinated
network, or portal that provides information regarding the availability of such
services, how to apply for such services, referral services for LTSS available in
the community, and determinations of financial and functional eligibility for
LTSS, or assistance with assessment processes for financial and functional
eligibility.
• Conflict-free case management services—services to develop a service plan,
arrange for LTSS, support the beneficiary (and, if appropriate, the caregiver) in
directing his or her services and supports, and conduct ongoing monitoring to
assure that services and supports delivered to the beneficiary meet his or her
needs and achieve intended outcomes.
• Core standardized assessment—development of instruments for determining
eligibility for non-institutionally based LTSS, uniformly used across the state, to
determine the beneficiary’s need for training, support services, medical care,
transportation, and other services, and to develop an individual service plan.
CMS identified 38 states as eligible for the BIP program. However, states are also permitted to
provide CMS with additional information on their Medicaid LTSS expenditures for FY2009 for
the purposes of determining BIP Program eligibility.83 According to CMS, 21 states have
approved BIP applications as of October 2014.84 For FY2013, 11 states reported having a
program in place, while 6 states (Connecticut, Kentucky, Massachusetts, Maine, Nevada, and
New York) reported plans to implement their program in FY2014, and 4 states (Nebraska, New
Hampshire, Ohio, and Pennsylvania) reported plans to implement in FY2015.85
83 GAO, Medicaid: States’ Plans to Pursue New and Revised Options for Home-and Community-Based Services, GAO-
12-649, June 2012, p. 13, footnote 22, http://www.gao.gov/assets/600/591560.pdf
84 CMS, Balancing Incentive Program, at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Long-Term-Services-and-Supports/Balancing/Balancing-Incentive-Program.html, accessed November 3, 2014.
85 Vernon K. Smith, K. Gifford, E. Ellis, et al. Medicaid in an Era of Health & Delivery System Reform: Results from a
50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015, Kaiser Family Foundation and the National
Association of Medical Directors, October 2014, p. 30, at http://files.kff.org/attachment/medicaid-in-an-era-of-health-
delivery-system-reform-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2014-and-2015-report.
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Appendix A. Legislative History of Medicaid Long-
Term Services and Supports (LTSS)
Prior to the enactment of Medicaid in 1965, homes for the aged and other public institutions were
financed by a combination of direct payments made by individuals from their Old Age Assistance
benefits,86 and vendor payments made by states with federal matching payments on behalf of
individuals. The Kerr-Mills Medical Assistance to the Aged program enacted in 1960 (P.L. 86-
778) allowed states to provide medical services, including skilled nursing care, to persons who
were not eligible for Old Age Assistance cash payments, thereby expanding the covered
population.
In 1965, when Kerr-Mills was incorporated into the new federal-state Medicaid program,
Congress created an entitlement to skilled nursing facility care for beneficiaries age 21 and older,
requiring all states to offer this service under the expanded program.87 It also gave skilled nursing
facility care the same priority status as hospital and physician services. Subsequent amendments
allowed states to provide care in “intermediate care facilities” for persons who did not need
skilled nursing facility care, but needed assistance beyond room and board alone.88 In 1987,
Congress eliminated the distinction between skilled nursing facilities and intermediate care
facilities (effective in 1990) in the Medicaid program. Medicaid law now refers collectively to
these facilities as nursing facilities.89
These early legislative developments helped stimulate growth in the nursing home industry. A
significant increase in the number of nursing homes was seen from 1960 to 1970. Over that time
period the number of nursing homes more than doubled, from around 9,600 to almost 23,000, and
the number of beds more than tripled from 331,000 to more than 1 million.90 Since 1970, the
count of nursing homes nationwide has declined, but the number of beds has increased. For
example, in 2011, the total number of nursing homes nationwide totaled 15,700 while the number
of beds totaled 1.7 million.91
Home care services also received some congressional attention in Medicaid’s original authorizing
statute. Under the 1965 law, home health care was established as one of the optional services that
states could provide. In 1968, three years after Medicaid was established, Congress amended the
law to require states to provide home health care to persons entitled to skilled nursing facility care
as part of their state Medicaid plans (effective in 1970).92 Over time, states were authorized to
cover other types of home and community-based services (HCBS) as optional benefits under the
Medicaid state plan. For example, the optional personal care benefit was first available in 1978.93
86 Old Age Assistance gave cash payments to poor elderly. This was the original version of Social Security benefits
established under Title I of the Social Security Act in 1935 (P.L. 74-271).
87 Social Security Amendments of 1965 (P.L. 89-97).
88 Act of December 14, 1971 (P.L. 92-223).
89 Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203).
90 U.S. Congress, Senate Special Committee on Aging, Developments in Aging, 1970, Report 92-46, Feb. 16, 1970,
Washington, p. 42, cited from the American Nursing Home Association Fact Book, 1969-1970.
91 National Center for Health Statistics, Health, United States, 2012: With Special Feature on Emergency Care,
Hyattsville, MD, Table 109, http://www.cdc.gov/nchs/data/hus/hus12.pdf#109.
92 Social Security Amendments of 1967 (P.L. 90-248), effective July, 1970.
93 Provided in federal regulation (43 Federal Register 45228, September 29, 1978). Congress then added personal care
(continued...)
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To enable states to make improvements in the management of care for their LTSS beneficiaries
and other groups, Congress added an optional case management benefit in 1986.94
Medicaid Home and Community-Based Waivers
During the 1970s, the former Department of Health, Education and Welfare (HEW) devoted
increased attention to alternatives to nursing home care through a variety of federal research and
demonstration efforts.95 These efforts were undertaken not only to find ways to offset the high
cost of nursing facility care, but also to respond to the desires of persons with disabilities to
remain in their homes and in community-based settings, rather than in institutions. However, it
was not until 1981 that Congress took significant legislative action to expand HCBS when it
authorized the Medicaid Section 1915(c) Home and Community-Based Waiver Program.96
Congress established the Section 1915(c) waiver program in response to general concerns about
the lack of federal funding for home and community-based care. The waiver program was also
intended to respond to specific concerns that Medicaid provided far greater support for nursing
facility care than home and community-based care. Prior to 1981, many of the non-skilled
personal care and supportive services needed by chronically impaired persons to remain in the
community were not covered under Medicaid. With approved waiver programs, states were
authorized to cover a wide variety of nonmedical, social, and supportive services designed to
assist individuals with independent living.
Congress also authorized the Program for All-Inclusive Care for the Elderly (PACE), as a
demonstration program, in 1983 to improve the delivery of HCBS and to reduce
institutionalization among the dual eligibles (i.e., those eligible for both Medicaid and Medicare)
age 55 and older with LTSS needs.97 The Balanced Budget Act of 1997 (P.L. 105-33) established
PACE as a permanent option under both Medicaid and Medicare.
The Olmstead Decision
In 1999, the U.S. Supreme Court ruled on a landmark case for individuals with disabilities,
Olmstead v. L.C.98 The Court held that institutionalization of people who could be cared for in
community settings was a violation of Title II of the Americans with Disabilities Act (ADA).99
(...continued)
to the list of services specified in the Medicaid statute under the Omnibus Budget Reconciliation Act of 1993 (P.L.
103-66).
94 Consolidated Omnibus Reconciliation Act of 1985 (P.L. 99-272), effective April, 1986.
95 U.S. General Accounting Office, Home Health Care Benefit Under Medicare and Medicaid, July 9, 1974,
http://archive.gao.gov/f0302/094820.pdf.
96 Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35).
97 Social Security Act Amendments of 1983 (P.L. 98-21).
98 527 U.S. 581 (1999).
99 Specifically, the Court held that the Americans with Disabilities Act (ADA) requires states to transfer individuals
with mental disabilities from institutions to less confining community settings when a state treatment professional has
determined the latter is appropriate, the community setting is not opposed by the individual with a disability, and the
placement can be reasonably accommodated by the state. A January 2000 Health Care Financing Administration (now
Centers for Medicare & Medicaid Services) notice to state Medicaid directors indicated that the decision was applicable
to all individuals with disabilities, not just those with mental disabilities.
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This case prompted federal administrative and legislative activities to encourage efforts to
provide expanded HCBS to persons with disabilities. Since this time, every state has taken up
either the Section 1915(c) HCBS waiver program option or a comparable waiver under the
authority of Section 1115 of the SSA, to offer HCBS to certain LTSS beneficiaries. To assist
states in Medicaid LTSS delivery system transformation toward HCBS, in FY2001 Congress first
appropriated funding for the Real Choice Systems Change Grants for Community Living
Program. Since then, CMS awarded over 350 grants to states between FY2001 and FY2010 for a
total of approximately $288.6 million.100
The Deficit Reduction Act
Under the Deficit Reduction Act of 2005 (DRA, P.L. 109-171), Congress established two
optional state plan Medicaid benefits that allow states to cover certain HCBS for eligible
beneficiaries.101 One option gives states the authority to cover a new waiver-like HCBS state plan
option (i.e., Section 1915(i) of the SSA) without requiring a Secretary-approved waiver for this
purpose. Under this option, states may offer selected benefit packages to targeted populations so
as to delay and/or prevent the need for institutional care. The second state plan option, under
Section 1915(j) of the SSA, provides states the authority to offer consumer-directed personal care
services with features such as individual budgets and the ability to purchase non-traditional goods
and services. Among other things, these options incorporated certain elements that had previously
only been allowed under Medicaid waivers, giving states greater flexibility to offer HCBS while
targeting benefits to certain populations which may assist states in controlling related spending.
The DRA also established the Money Follows the Person (MFP) Program, a demonstration grant
program to provide assistance to eligible Medicaid beneficiaries who want to move from
institutional settings—such as nursing homes—back to their homes or other community
residential settings.
The Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) provided a
number of new options under Medicaid for states to further efforts to increase coverage of HCBS.
First, the ACA added the Community First Choice (CFC) Option, a new authority under Section
1915(k) of the SSA, which authorizes states to offer personal care attendant services, among other
services. States that choose this option will receive an increased FMAP rate of 6 percentage
points. The ACA also expanded the Section 1915(i) HCBS state plan option established under the
DRA. Among other changes, the ACA increased the amount of income individuals may have to
qualify for the benefit and added new flexibility for states to target different benefit packages to
specific populations with LTSS needs. In addition, ACA expanded the list of services states may
cover to include state-selected services, other than room and board, that are approved by the HHS
Secretary, which is similar to Section 1915(c) HCBS waiver programs. The ACA also granted
100 CMS, Real Choice Systems Change Grant Program, http://www.medicaid.gov/Medicaid-CHIP-Program-
Information/By-Topics/Long-Term-Services-and-Supports/Balancing/Real-Choice-Systems-Change-Grant-Program-
RCSC/Real-Choice-Systems-Change-Grant-Program-RCSC.html, accessed November 3, 2014.
101 In addition, the DRA established new grants to help expand adult day care services into rural areas under the
Program for All-Inclusive Care for the Elderly (PACE), an integrated Medicaid and Medicare program, and authorized
additional grant funding to states to conduct demonstration projects to increase the use of and expand states’ capacity to
provide HCBS.
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states the option to establish a new Medicaid eligibility pathway for certain qualifying
beneficiaries who meet the Section 1915(i) benefit’s financial and needs-based criteria. Finally,
the ACA established a four-year incentive payment program, referred to as the Balancing
Incentive Payments (BIP) Program, and extended the Money Follows the Person (MFP)
demonstration through 2016 by providing additional funding to support the original state grantees
and to award grants to additional states.
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Appendix B. State Tables
Table B-1. Optional State Plan Medicaid Long-Term Services and Services (LTSS)
Benefits, by State
Targ.
Psych.
Priv.
Case
IMD
Under
Pers.
Duty
PAS
State
Mngmta
ICF/ IDb
65+c
21d
PACEe
Caref
Nurs.g
Rehab.h
§1915(j)i
(Year)
(2012)
(2012)
(2012)
(2012)
(2014)
(2012)
(2012)
(2012)
(2012)
Alabama
Yes Yes Yes Yes Yes — — Yes —
Alaska
Yes Yes Yes Yes — Yes — Yes —
Arizona
Yes Yes Yes Yes — Yes Yes Yes —
Arkansas
Yes Yes — Yes Yes Yes Yes Yes Yes
California
Yes
Yes
Yes
Yes Yes Yes — Yes Yes
Colorado
Yes Yes Yes Yes Yes — Yes Yes —
Connecticut
Yes Yes Yes Yes — — — Yes —
Delaware
— Yes Yes Yes Yes — Yes Yes —
Dist. of Columbia
Yes
Yes
Yes
Yes
—
Yes
Yes
Yes
—
Florida
Yes
Yes
Yes
Yes Yes — — Yes Yes
Georgia
Yes Yes — Yes — — — Yes —
Hawaii
Yes Yes — Yes — — — Yes —
Idaho
Yes Yes Yes Yes — Yes — Yes —
Illinois
Yes Yes Yes Yes — — — Yes —
Indiana
— Yes Yes Yes — — Yes Yes —
Iowa
Yes Yes Yes Yes Yes — — Yes —
Kansas
Yes Yes Yes Yes Yes — — Yes —
Kentucky
Yes Yes Yes Yes — — — Yes —
Louisiana
Yes Yes Yes Yes Yes Yes — Yes —
Maine
Yes Yes Yes Yes — Yes Yes Yes —
Maryland
Yes Yes Yes Yes Yes Yes — Yes —
Massachusetts
Yes Yes Yes Yes Yes Yes Yes Yes —
Michigan
Yes — Yes Yes Yes Yes — Yes —
Minnesota
Yes Yes Yes Yes — Yes Yes Yes —
Mississippi
Yes Yes — Yes — — — Yes —
Missouri
Yes Yes Yes Yes Yes Yes — Yes —
Montana
Yes Yes Yes Yes — Yes — Yes —
Nebraska
Yes Yes Yes Yes Yes Yes Yes Yes —
Nevada
Yes Yes Yes Yes No Yes Yes Yes —
New
Hampshire
Yes — Yes Yes — Yes Yes Yes —
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Targ.
Psych.
Priv.
Case
IMD
Under
Pers.
Duty
PAS
State
Mngmta
ICF/ IDb
65+c
21d
PACEe
Caref
Nurs.g
Rehab.h
§1915(j)i
(Year)
(2012)
(2012)
(2012)
(2012)
(2014)
(2012)
(2012)
(2012)
(2012)
New
Jersey
Yes Yes Yes Yes Yes Yes — Yes Yes
New
Mexico
Yes Yes Yes Yes Yes Yes — Yes —
New
York
Yes Yes Yes Yes Yes Yes Yes Yes —
North Carolina
Yes
Yes
Yes Yes Yes Yes Yes Yes —
North Dakota
Yes
Yes
Yes Yes Yes Yes Yes Yes —
Ohio
Yes Yes Yes Yes Yes — Yes Yes —
Oklahoma
Yes Yes Yes Yes Yes Yes — Yes —
Oregon
Yes — Yes Yes Yes Yes Yes Yes Yes
Pennsylvania
Yes Yes Yes Yes Yes — — Yes —
Rhode Island
Yes
Yes
Yes Yes Yes Yes Yes Yes —
South
Carolina
Yes Yes Yes Yes Yes — — Yes —
South
Dakota
Yes Yes Yes Yes — Yes — Yes —
Tennessee
Yes Yes Yes Yes Yes — Yes Yes —
Texas
Yes Yes Yes Yes Yes Yes — Yes Yes
Utah
Yes Yes Yes Yes — Yes Yes Yes —
Vermont
Yes Yes Yes Yes — — Yes Yes —
Virginia
Yes Yes Yes Yes Yes — — Yes —
Washington
Yes Yes Yes Yes Yes Yes Yes Yes —
West
Virginia
Yes Yes — Yes — Yes — Yes —
Wisconsin
Yes Yes Yes Yes Yes Yes Yes Yes —
Wyoming
Yes Yes Yes Yes Yes — — Yes —
TOTAL
49 48 46 51 31 31 23 51 6
Source: CRS analysis of data from Kaiser Family Foundation: State Health Facts and other published sources; data year
indicated in parentheses.
Notes: Medicaid LTSS benefit coverage varies across states in the amount, duration, and scope of the benefit as well as the
included services within a specific benefit (e.g., Section 1915(j) Personal Assistance Services).
a. Targeted Case Management. Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Targeted Case
Management, 2012,” at http://kff.org/medicaid/state-indicator/targeted-case-management/.
b. Federal Medicaid law and regulations use the term “intermediate care facilities for the mentally retarded” and
abbreviation “ICFs/MR”; however, federal agencies use the term individuals with “intel ectual disability (ID).”
Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Intermediate Care Facility Services for
Individuals with Intellectual Disabilities, 2012,” at http://kff.org/medicaid/state-indicator/intermediate-care-facility-
services-for-the-mentally-retarded/.
c. IMD 65+ refers to Institutions for Mental Diseases for individuals ages 65 and older; Kaiser Family
Foundation, “State Health Facts, Medicaid Benefits: Inpatient Hospital, Nursing Facility and Intermediate
Care Facility Services In Institutions for Mental Diseases, age 65 and older, 2012,” at http://kff.org/medicaid/
state-indicator/inpatient-hospital-nursing-facility-and-intermediate-care-facility-services-in-institutions-for-
mental-diseases-age-65-and-older/.
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d. Psych Under 21 refers to Inpatient psychiatric care to individuals under age 21; Kaiser Family Foundation,
“State Health Facts, Medicaid Benefits: Inpatient Psychiatric Services, under age 21, 2012,” at http://kff.org/
medicaid/state-indicator/inpatient-psychiatric-services-under-age-21/.
e. PACE refers to Program for All-Inclusive Care of the Elderly; National PACE Association, “PACE in the States,”
January 1, 2014.
f.
Personal Care. Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Personal Care Services,
2012,” at http://kff.org/medicaid/state-indicator/personal-care-services/#.
g. Private Duty Nursing. Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Private Duty
Nursing Services, 2012,” at http://kff.org/medicaid/state-indicator/private-duty-nursing-services/.
h. Rehabilitative services include rehabilitation services for mental health and substance abuse; Kaiser Family
Foundation, “State Health Facts, Medicaid Benefits: Rehabilitation Services – Mental Health and Substance Abuse,
2012,” at http://kff.org/medicaid/state-indicator/rehabilitation-services-mental-health-and-substance-abuse/.
i.
PAS refers to Personal Assistance Services. States reporting expenditures for either Section 1915(j)
personal care and/or Section 1915(i) HCBS in FY2012. Eiken, S., K. Sredl, L. Gold, et al., Medicaid
Expenditures for Long-Term Services and Supports in FFY 2012, Truven Health Analytics, April 2014, p. 13 and
Tables S and T at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Long-Term-
Services-and-Supports/Downloads/LTSSExpendFFY2012_Final.pdf.
Table B-2. New and Amended State Plan Options Under the Patient Protection and
Affordable Care Act (ACA, P.L. 111-148, as amended)
Health Home w/
Chronic
State
Conditionsa
HCBS §1915(i)b
CFC §1915(k)c
(Year)
(2014)
(2014)
(2014)
Currently Offering?
Alabama
Yes
—
—
Alaska
— — —
Arizona Planning
—
—
Arkansas
Planning Yes Planning
California
Planning
Yes
Yes
Colorado
— — —
Connecticut
—
Yes
Planning
Delaware
—
Planning
—
Dist. of Columbia
Planning
Planning
—
Florida
—
Yes
—
Georgia
— — —
Hawaii
— — —
Idaho
Yes
Yes
—
Illinois
— — —
Indiana
—
Planning
—
Iowa
Yes
Yes
—
Kansas
Planning
—
—
Kentucky
Planning
—
—
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Health Home w/
Chronic
State
Conditionsa
HCBS §1915(i)b
CFC §1915(k)c
(Year)
(2014)
(2014)
(2014)
Currently Offering?
Louisiana
—
Yes
—
Maine
Yes
—
—
Maryland
Yes
Planning
Planning
Massachusetts
— — —
Michigan
— — —
Minnesota
Planning Planning Planning
Mississippi
Planning
Planning
—
Missouri
Yes
—
—
Montana
—
Yes
Planning
Nebraska
— — —
Nevada
Planning
Yes
—
New
Hampshire
— — —
New Jersey
Planning
—
—
New Mexico
Planning
—
—
New York
Yes
—
Planning
North Carolina
Yes
—
—
North
Dakota
— — —
Ohio
Yes
—
—
Oklahoma
Planning
—
—
Oregon
Yes
Yes
Planning
Pennsylvania
— — —
Rhode Island
Yes
—
—
South Carolina
—
Planning
—
South Dakota
Yes
—
—
Tennessee
— — —
Texas
—
Planning
Planning
Utah
— — —
Vermont Yes
—
—
Virginia
— — —
Washington
Yes
Planning
Planning
West Virginia
Planning
—
—
Wisconsin
Yes
Yes
—
Wyoming
— — —
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Health Home w/
Chronic
State
Conditionsa
HCBS §1915(i)b
CFC §1915(k)c
(Year)
(2014)
(2014)
(2014)
Currently Offering?
TOTAL - in effect
15
11
1
TOTAL - planning
13
9
9
Source: CRS analysis of data from CMS and other published sources; data year indicated in parentheses.
Notes: Medicaid LTSS benefit coverage varies across states in the amount, duration, and scope of the benefit as well
as the included services within a specific benefit (e.g., Section 1915(i) Home and Community-Based Services).
a. Centers for Medicare & Medicaid Services (CMS), “State Health Home CMS Proposal Status (effective June
2014)”, http://www.medicaid.gov/State-Resource-Center/Medicaid-State-Technical-Assistance/Health-
Homes-Technical-Assistance/Downloads/HH-MAP_v34.pdf.
b. Vernon K. Smith, K. Gifford, E. Ellis, et al. Medicaid in an Era of Health & Delivery System Reform: Results from
a 50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015, Kaiser Family Foundation and the
National Association of Medical Directors, October 2014, p. 33.
c. Ibid., p. 33. For FY2013, CA is the only state that has a Section 1915(k) CFC option in place. Four states
reported implementing the Section 1915(k) CFC option in FY2014 (MD, MN, MT, and OR); five states
reported plans to implement in FY2015 (AR, CT, NY, TX, and WA).
Table B-3. State Participation in the Money Follows the Person Demonstration
Grants and Balancing Incentive Program, as of October 2014
Money Follows the
Balancing Incentive
State
Person Grantsa
Programb
(Year)
(2013)
(2014)
Currently Participating?
Alabama
Yes
—
Alaska
—
—
Arizona —
—
Arkansas
Yes
Yes
California
Yes
—
Colorado
Yes
—
Connecticut
Yes
Yes
Delaware
Yes
—
Dist. of Columbia
Yes
—
Florida
—
—
Georgia
Yes
Yes
Hawaii
Yes
—
Idaho
Yes
—
Illinois
Yes
Yes
Indiana
Yes
Yes
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Money Follows the
Balancing Incentive
State
Person Grantsa
Programb
(Year)
(2013)
(2014)
Currently Participating?
Iowa
Yes
Yes
Kansas
Yes
—
Kentucky
Yes
Yes
Louisiana
Yes
Yes
Maine
Yes
Yes
Maryland
Yes
Yes
Massachusetts
Yes
Yes
Michigan
Yes
—
Minnesota
Yes
—
Mississippi
Yes
Yes
Missouri
Yes
Yes
Montana
Yes
—
Nebraska
Yes
Yes
Nevada
Yes
Yes
New Hampshire
Yes
Yes
New Jersey
Yes
Yes
New Mexico
—
—
New York
Yes
Yes
North Carolina
Yes
—
North Dakota
Yes
—
Ohio
Yes
Yes
Oklahoma
Yes
—
Oregonb
Yes
—
Pennsylvania
Yes
Yes
Rhode Island
Yes
—
South Carolina
Yes
—
South Dakota
Yes
—
Tennessee
Yes
—
Texas
Yes
Yes
Utah
—
—
Vermont Yes —
Virginia
Yes
—
Washington
Yes
—
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Money Follows the
Balancing Incentive
State
Person Grantsa
Programb
(Year)
(2013)
(2014)
Currently Participating?
West Virginia
Yes
—
Wisconsin
Yes
—
Wyoming
—
—
45
21
TOTAL
Active Grants
Approved Applications
Source: CRS analysis of data from CMS and other published sources; data year indicated in parentheses.
a. State data obtained from CMS at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Long-Term-Services-and-Supports/Balancing/Money-Fol ows-the-Person.html and Eric Morris, Bailey G.
Orshan, Noelle Denny-Brown, et al., Money Follows the Person Demonstration: Overview of State Grantee
Progress, July to December 2013, September 2014, p. 1.
b. State data obtained from CMS at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Long-Term-Services-and-Supports/Balancing/Balancing-Incentive-Program.html and Vernon K. Smith, K.
Gifford, E. Ellis, et al. Medicaid in an Era of Health & Delivery System Reform: Results from a 50-State Medicaid
Budget Survey for State Fiscal Years 2014 and 2015, Kaiser Family Foundation and the National Association of
Medical Directors, October 2014, p. 30. Among the 45 grantees, two (MT and SD) were in the planning
phase, and one (OR) had temporarily suspended operations; FL and NM were awarded grants in 2011 but
later rescinded them.
Author Contact Information
Kirsten J. Colello
Specialist in Health and Aging Policy
kcolello@crs.loc.gov, 7-7839
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