Medicaid’s Money Follows the Person Rebalancing Demonstration Program
link to page 1 
May 26, 2021
Medicaid’s Money Follows the Person Rebalancing
Demonstration Program
Overview
For more information, see CRS Report R43328, Medicaid
The Money Follows the Person (MFP) Rebalancing
Coverage of Long-Term Services and Supports.
Demonstration Program (42 U.S.C. 1396a note) authorizes
Relevant Legislation
the Center for Medicare & Medicaid Services (CMS) to
The MFP program was first enacted in 2006 and has been
award competitive grants to states to transition Medicaid
extended with additional mandatory funding over time.
participants who reside in institutional settings that provide
long-term services and supports (LTSS), such as nursing
The Deficit Reduction Act of 2005 (DRA; P.L. 109-
facilities, into community-based settings. MFP was
171), Section 6071, established the MFP program and
designed to achieve the following objectives:
appropriated a total of $1.75 billion in funding from
January 1, 2007, through September 30, 2011.
Rebalancing: Increase the use of HCBS rather than
institutional LTSS.
The Patient Protection and Affordable Care Act
(ACA; P.L. 111-148, as amended), Section 2403,
Money follows the person: Eliminate barriers that
amended the DRA to extend program funding for five
restrict the use of Medicaid funds enabling eligible
years (from October 1, 2011, through September 30,
individuals to receive LTSS in the setting of their
2016); it appropriated an additional $2.25 billion ($450
choice.
million for each fiscal year). It reduced the minimum
Continuity of service: Increase the state Medicaid
stay requirements to be eligible from six months to 90
program’s ability to provide Medicaid HCBS to
consecutive days in an inpatient facility.
eligible individuals who choose to transition.
The Medicaid Extenders Act of 2019 (P.L. 116-3),
Quality assurance and quality improvement: Ensure
Section 2, amended the DRA to extend program
procedures to provide quality assurance and continuous
funding through September 31, 2019, after a lapse in
quality improvement for Medicaid HCBS.
annual appropriations since October 1, 2016; however,
According to CMS, states have transitioned over 100,000
state grantees could expend any unspent FY2016
individuals to community living from 2008 to 2019. A total
amounts through FY2020. It appropriated an additional
of 43 states and the District of Columbia have participated
$112.0 million for FY2019, of which $500,000 was for
in MFP over the course of the program (Figure 1).
quality assurance, technical assistance, and oversight.
Figure 1. Medicaid Money Follows the Person (MFP)
The Medicaid Services Investment and
Demonstration States by Grant Award Year
Accountability Act of 2019 (P.L. 116-16), Section 5,
amended the DRA to appropriate an additional $20.0
million for a total of $132.0 million for FY2019.
The Sustaining Excellence in Medicaid Act of 2019
(P.L. 116-39), Section 4, amended the DRA to
appropriate an additional $122.5 million, for a total of
$254.5 million for FY2019.
The Further Consolidated Appropriations Act, 2020
(P.L. 116-94), Division N, Section 205, amended the
DRA to appropriate an additional $176.0 million for
January 1, 2020, through May 22, 2020.
The Coronavirus Aid, Relief, and Economic
Security Act (CARES; P.L. 116-136), Division A,
Section 3811, amended the DRA to extend program
funding through November 30, 2020; it appropriated an
additional $161.5 million for $337.5 million in total for
Source: R. Coughlin et al., Money Follows the Person Demonstration:
January 1, 2020, through September 30, 2020, and a
Overview of State Grantee Progress, Mathematica Policy Research,
prorated amount based on FY2020 for October 1, 2020,
January to December 2016, September 2017.
through November 30, 2020 (extended through
December 11 and 18, 2020, in P.L. 116-159 and in P.L.
116-215).
https://crsreports.congress.gov
Medicaid’s Money Follows the Person Rebalancing Demonstration Program
The Consolidated Appropriations Act, 2021 (P.L.
a home owned or leased by the individual or the
116-260), Division CC, Section 204, amended the
individual’s family member;
DRA to extend program funding through September
an apartment with an individual lease, with lockable
30, 2023; $450 million in total was appropriated for
access and egress, and living, sleeping, bathing, and
FY2021 and for each fiscal year thereafter, for a total
cooking areas they control; and
of $1.35 billion. It reduces the minimum stay
a residence, in a community-based residential setting,
requirements to be eligible from 90 to 60 consecutive
in which no more than four unrelated individuals
days in an inpatient facility; allows for days admitted
reside.
for short-term rehabilitative services, which were
previously excluded, to be counted; and extends
Covered Services and Enhanced Federal Match
funding to carry out research and evaluation and
Eligible individuals who transition receive MFP services
requires certain reports to Congress. These
for 365 days. These services are categorized as qualified,
amendments took effect January 26, 2021.
demonstration, and supplemental. States must continue to
Current Status
provide Medicaid-covered HCBS state plan or waiver
services to individuals after the 12-month period, as long as
P.L. 116-260 appropriated $450 million in federal funding
they are eligible. State grantees receive an enhanced federal
for each of FY2021, FY2022, and FY2023. CMS has
match to the state share (federal medical assistance
authority to make grant awards to states through FY2023
percentage or FMAP) for certain HCBS expenditures and
for any appropriated funds. States who do not currently
higher than usual payments for other MFP services for up to
participate in the MFP program may be eligible.
12 months after transition. The enhanced FMAP is equal to
Timing and Availability of Funds
a state’s regular FMAP plus half of the difference between
the state’s regular FMAP and 100, and cannot exceed 90%
MFP grant awards are for a five-year project period. After
(i.e., enhanced FMAP ranges from 75% to 90%). States that
the initial grant award, states may receive supplemental
provide HCBS through managed care may request an MFP-
awards in subsequent fiscal years. States may expend grant
specific HCBS managed care rate for MFP participants.
awards in the first fiscal year of an award and for up to four
The following lists MFP covered services and their
additional years after the award year.
associated Medicaid FMAP rate:
Program Waiver Authority
Qualified HCBS: Services beneficiaries would have
The MFP program authorizes states to waive certain
received regardless of their MFP status (i.e., state plan
requirements that traditionally apply to Medicaid state plan
and waiver services); Enhanced FMAP.
eligibility and covered services and include the following:
Demonstration HCBS: Allowable services not
Statewideness: permits implementation in a selected
currently in state’s HCBS offerings, or qualified HCBS
geographic area or areas.
above what is already available (e.g., 24-hour personal
Comparability: permits enrollment of a selected
care); Enhanced FMAP.
category or categories of eligible individuals.
Supplemental Services: Services to facilitate a
Income and Resource Eligibility Rules: permits
transition that are not HCBS or otherwise reimbursable
application of institutional eligibility rules to
(e.g., security deposit, utility set up); State’s Regular
individuals transitioning to the community.
FMAP.
Provider agreements: permits implementation of
Administrative Expenses: Certain administrative
participant-directed services wherein the participant
expenses associated with MFP grant operation; 100%
retains certain employer related functions for selecting,
FMAP (rather than typical 50% FMAP for
hiring, and managing personal care attendants.
administrative expenses).
Maintenance of Effort
Selected Lessons Learned from MFP Evaluations
For any fiscal year during the MFP project period, a state’s
Transitions from institutional settings into the community
total Medicaid HCBS expenditures must not be less than
are complex. For successful transitions, some research
the greater of such expenditures (1) for FY2005 or (2) any
suggests there is a need for planning and infrastructure to be
succeeding year before the first year of the MFP project.
in place, including case management services to support
Transition Requirements
individuals before, during, and after a transition. Inadequate
supply of affordable and accessible housing and wait lists
States must identify eligible Medicaid participants living in
for public housing or vouchers often limit the ability of
an institution who want to transition out of the institution
low-income participants to pay market rent. As Medicaid is
and assist them to do so. An eligible individual is one who
statutorily prohibited from paying for housing, states have
resides for at least 60 days in a qualifying inpatient
used MFP funds to hire housing coordinators and formed
facility (hospital, nursing facility, institution for mental
partnerships with state and local housing authorities,
diseases [IMD] for eligible individuals, intermediate
landlords, and developers to address housing supply.
care facility for individuals with intellectual disability
Through the MFP program, states have reportedly
[ICF/ID]); and
developed knowledge about executing successful
receives Medicaid and requires institutional care.
transitions and serving individuals with complex care needs
Eligible individuals must transition to a “qualified
in the community (see Mathematica Policy Research MFP
residence,” which is defined as
publications at www.mathematica.com).
https://crsreports.congress.gov
Medicaid’s Money Follows the Person Rebalancing Demonstration Program
IF11839
Kirsten J. Colello, Specialist in Health and Aging Policy
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11839 · VERSION 1 · NEW
May 26, 2021
Medicaid’s Money Follows the Person Rebalancing
Demonstration Program
Overview
For more information, see CRS Report R43328, Medicaid
The Money Follows the Person (MFP) Rebalancing
Coverage of Long-Term Services and Supports.
Demonstration Program (42 U.S.C. 1396a note) authorizes
Relevant Legislation
the Center for Medicare & Medicaid Services (CMS) to
The MFP program was first enacted in 2006 and has been
award competitive grants to states to transition Medicaid
extended with additional mandatory funding over time.
participants who reside in institutional settings that provide
long-term services and supports (LTSS), such as nursing
The Deficit Reduction Act of 2005 (DRA; P.L. 109-
facilities, into community-based settings. MFP was
171), Section 6071, established the MFP program and
designed to achieve the following objectives:
appropriated a total of $1.75 billion in funding from
January 1, 2007, through September 30, 2011.
Rebalancing: Increase the use of HCBS rather than
institutional LTSS.
The Patient Protection and Affordable Care Act
(ACA; P.L. 111-148, as amended), Section 2403,
Money follows the person: Eliminate barriers that
amended the DRA to extend program funding for five
restrict the use of Medicaid funds enabling eligible
years (from October 1, 2011, through September 30,
individuals to receive LTSS in the setting of their
2016); it appropriated an additional $2.25 billion ($450
choice.
million for each fiscal year). It reduced the minimum
Continuity of service: Increase the state Medicaid
stay requirements to be eligible from six months to 90
program’s ability to provide Medicaid HCBS to
consecutive days in an inpatient facility.
eligible individuals who choose to transition.
The Medicaid Extenders Act of 2019 (P.L. 116-3),
Quality assurance and quality improvement: Ensure
Section 2, amended the DRA to extend program
procedures to provide quality assurance and continuous
funding through September 31, 2019, after a lapse in
quality improvement for Medicaid HCBS.
annual appropriations since October 1, 2016; however,
According to CMS, states have transitioned over 100,000
state grantees could expend any unspent FY2016
individuals to community living from 2008 to 2019. A total
amounts through FY2020. It appropriated an additional
of 43 states and the District of Columbia have participated
$112.0 million for FY2019, of which $500,000 was for
in MFP over the course of the program (Figure 1).
quality assurance, technical assistance, and oversight.
Figure 1. Medicaid Money Follows the Person (MFP)
The Medicaid Services Investment and
Demonstration States by Grant Award Year
Accountability Act of 2019 (P.L. 116-16), Section 5,
amended the DRA to appropriate an additional $20.0
million for a total of $132.0 million for FY2019.
The Sustaining Excellence in Medicaid Act of 2019
(P.L. 116-39), Section 4, amended the DRA to
appropriate an additional $122.5 million, for a total of
$254.5 million for FY2019.
The Further Consolidated Appropriations Act, 2020
(P.L. 116-94), Division N, Section 205, amended the
DRA to appropriate an additional $176.0 million for
January 1, 2020, through May 22, 2020.
The Coronavirus Aid, Relief, and Economic
Security Act (CARES; P.L. 116-136), Division A,
Section 3811, amended the DRA to extend program
funding through November 30, 2020; it appropriated an
additional $161.5 million for $337.5 million in total for
Source: R. Coughlin et al., Money Follows the Person Demonstration:
January 1, 2020, through September 30, 2020, and a
Overview of State Grantee Progress, Mathematica Policy Research,
prorated amount based on FY2020 for October 1, 2020,
January to December 2016, September 2017.
through November 30, 2020 (extended through
December 11 and 18, 2020, in P.L. 116-159 and in P.L.
116-215).
https://crsreports.congress.gov
Medicaid’s Money Follows the Person Rebalancing Demonstration Program
The Consolidated Appropriations Act, 2021 (P.L.
a home owned or leased by the individual or the
116-260), Division CC, Section 204, amended the
individual’s family member;
DRA to extend program funding through September
an apartment with an individual lease, with lockable
30, 2023; $450 million in total was appropriated for
access and egress, and living, sleeping, bathing, and
FY2021 and for each fiscal year thereafter, for a total
cooking areas they control; and
of $1.35 billion. It reduces the minimum stay
a residence, in a community-based residential setting,
requirements to be eligible from 90 to 60 consecutive
in which no more than four unrelated individuals
days in an inpatient facility; allows for days admitted
reside.
for short-term rehabilitative services, which were
previously excluded, to be counted; and extends
Covered Services and Enhanced Federal Match
funding to carry out research and evaluation and
Eligible individuals who transition receive MFP services
requires certain reports to Congress. These
for 365 days. These services are categorized as qualified,
amendments took effect January 26, 2021.
demonstration, and supplemental. States must continue to
Current Status
provide Medicaid-covered HCBS state plan or waiver
services to individuals after the 12-month period, as long as
P.L. 116-260 appropriated $450 million in federal funding
they are eligible. State grantees receive an enhanced federal
for each of FY2021, FY2022, and FY2023. CMS has
match to the state share (federal medical assistance
authority to make grant awards to states through FY2023
percentage or FMAP) for certain HCBS expenditures and
for any appropriated funds. States who do not currently
higher than usual payments for other MFP services for up to
participate in the MFP program may be eligible.
12 months after transition. The enhanced FMAP is equal to
Timing and Availability of Funds
a state’s regular FMAP plus half of the difference between
the state’s regular FMAP and 100, and cannot exceed 90%
MFP grant awards are for a five-year project period. After
(i.e., enhanced FMAP ranges from 75% to 90%). States that
the initial grant award, states may receive supplemental
provide HCBS through managed care may request an MFP-
awards in subsequent fiscal years. States may expend grant
specific HCBS managed care rate for MFP participants.
awards in the first fiscal year of an award and for up to four
The following lists MFP covered services and their
additional years after the award year.
associated Medicaid FMAP rate:
Program Waiver Authority
Qualified HCBS: Services beneficiaries would have
The MFP program authorizes states to waive certain
received regardless of their MFP status (i.e., state plan
requirements that traditionally apply to Medicaid state plan
and waiver services); Enhanced FMAP.
eligibility and covered services and include the following:
Demonstration HCBS: Allowable services not
Statewideness: permits implementation in a selected
currently in state’s HCBS offerings, or qualified HCBS
geographic area or areas.
above what is already available (e.g., 24-hour personal
Comparability: permits enrollment of a selected
care); Enhanced FMAP.
category or categories of eligible individuals.
Supplemental Services: Services to facilitate a
Income and Resource Eligibility Rules: permits
transition that are not HCBS or otherwise reimbursable
application of institutional eligibility rules to
(e.g., security deposit, utility set up); State’s Regular
individuals transitioning to the community.
FMAP.
Provider agreements: permits implementation of
Administrative Expenses: Certain administrative
participant-directed services wherein the participant
expenses associated with MFP grant operation; 100%
retains certain employer related functions for selecting,
FMAP (rather than typical 50% FMAP for
hiring, and managing personal care attendants.
administrative expenses).
Maintenance of Effort
Selected Lessons Learned from MFP Evaluations
For any fiscal year during the MFP project period, a state’s
Transitions from institutional settings into the community
total Medicaid HCBS expenditures must not be less than
are complex. For successful transitions, some research
the greater of such expenditures (1) for FY2005 or (2) any
suggests there is a need for planning and infrastructure to be
succeeding year before the first year of the MFP project.
in place, including case management services to support
Transition Requirements
individuals before, during, and after a transition. Inadequate
supply of affordable and accessible housing and wait lists
States must identify eligible Medicaid participants living in
for public housing or vouchers often limit the ability of
an institution who want to transition out of the institution
low-income participants to pay market rent. As Medicaid is
and assist them to do so. An eligible individual is one who
statutorily prohibited from paying for housing, states have
resides for at least 60 days in a qualifying inpatient
used MFP funds to hire housing coordinators and formed
facility (hospital, nursing facility, institution for mental
partnerships with state and local housing authorities,
diseases [IMD] for eligible individuals, intermediate
landlords, and developers to address housing supply.
care facility for individuals with intellectual disability
Through the MFP program, states have reportedly
[ICF/ID]); and
developed knowledge about executing successful
receives Medicaid and requires institutional care.
transitions and serving individuals with complex care needs
Eligible individuals must transition to a “qualified
in the community (see Mathematica Policy Research MFP
residence,” which is defined as
publications at www.mathematica.com).
https://crsreports.congress.gov
Medicaid’s Money Follows the Person Rebalancing Demonstration Program
IF11839
Kirsten J. Colello, Specialist in Health and Aging Policy
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11839 · VERSION 1 · NEW