Medicaid Coverage of Long-Term Services and Supports

December 5, 2013 – September 15, 2022 R43328

Medicaid Coverage of Long-Term Services and September 15, 2022
Supports
Kirsten J. Colello
Long-term services and supports (LTSS) refer to a broad range of health and health-
Specialist in Health and
related services and supports needed by individuals who lack the capacity for self-care
Aging Policy
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 $200.1 billion or 42.1% of all LTSS expenditures in CY2020 ($475.1 billion). LTSS are also a
substantial portion of spending within the Medicaid program relative to the population served. In CY2020, LTSS
accounted for 34.1% of all Medicaid spending. Of the 88.0 million total enrolled Medicaid population, an
estimated 8.8 million (or 10.3%) received LTSS in CY2019 (the most recent year for which data are available).
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 additional HCBS coverage and delivery
options. As a result, the share of Medicaid LTSS spending for HCBS has almost quintupled over the past three
decades, accounting for 12% of Medicaid LTSS spending in FY1989 and increasing to more than half (59%) of
total Medicaid LTSS spending in FY2019.
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 HCBS through a waiver program that permits states to disregard certain
Medicaid requirements in the provision of these services, subject to approval by the Secretary of Health and
Human Services (HHS). Over time, Congress has provided state Medicaid programs with additional state plan
authority as well as federal payment incentives to expand their HCBS offerings. For example, the Deficit
Reduction Act (DRA; P.L. 109-171) established HCBS as a state plan optional benefit under Section 1915(i) of
the Social Security Act (SSA) and self-directed personal attendant services under SSA Section 1915(j). The
Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) amended the Section 1915(i) HCBS
state plan option to provide state’s further flexibility to enhance or expand their HCBS delivery systems. It also
established a new HCBS state plan authority under SSA Section 1915(k) Community First Choice (CFC). The
American Rescue Plan Act (ARPA; P.L. 117-2) includes a temporary 10-percentage-point increase to the federal
medical assistance percentage (FMAP) for certain HCBS for states that meet the HCBS program requirements
during the program improvement period (i.e., April 1, 2021, through March 31, 2022). States will be able to use
available ARPA funds through March 31, 2025. 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.
This report provides a description of the various statutory authorities that either require or otherwise allow states
to cover LTSS under Medicaid. See Appendix A for state information about coverage of Medicaid state plan
optional benefits and Appendix B for data on HCBS and institutional Medicaid LTSS expenditures by service
category.
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Appendix B. Medicaid Long-Term Services and Supports (LTSS) Expenditures ........................ 32

Contacts
Author Information ........................................................................................................................ 33

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Introduction
Long-term services and supports (LTSS) refer to the array of institutional services (i.e. nursing
facilities and intermediate care facilities) and home and community-based services (HCBS)
provided to frail older adults and young adults with physical, intellectual, or developmental
disabilities who require health-related services and hands-on assistance or supervision over an
extended period of time. Medicaid plays a key role in covering LTSS to eligible aged and
disabled individuals. As the largest single payer of LTSS in the United States, Medicaid LTSS
spending (federal and state) in CY2020 totaled $200.1 billion and accounted for 42.1% of all
LTSS expenditures ($475.1 billion).1 LTSS are also a substantial portion of spending within the
Medicaid program relative to the proportion of the Medicaid population served. In CY2020,
Medicaid LTSS accounted for 34.1% of all Medicaid spending.2 In contrast, 10.3% of Medicaid
beneficiaries (8.8 million) used LTSS nationally in CY2019 (the most recent year for which data
are available).3 Of these, 1.6 million beneficiaries (18.4%) received institutional services, 7.5
million (85.0%) received HCBS, and 0.3 million (3.5%) received both.4
Established under Title XIX of the Social Security Act (SSA), Medicaid is a means-tested
individual entitlement program that finances the delivery of health care and LTSS to certain low-
income individuals. The federal government and the states jointly finance the Medicaid program.
States have primary responsibility for administering their Medicaid program within broad federal
guidelines.5 The federal share of 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).6 Historically, to qualify for Medicaid, individuals must meet certain categorical and
financial eligibility requirements.7 To qualify for Medicaid-covered LTSS, individuals must also
meet needs-based eligibility criteria; that is, they have to demonstrate an extended need for long-
term care. In general, needs-based criteria are state-defined and often measure functional need,
such as an individual’s ability to perform certain self-care activities and/or clinical need for care
such as a diagnosis of chronic illness or disabling condition.
This report provides an overview of Medicaid coverage of LTSS, including the various statutory
authorities that either require or otherwise allow states to cover LTSS under Medicaid. Appendix
A provides state information about coverage of Medicaid state plan optional LTSS benefits, and

1 CRS estimates based on National Health Expenditure Account (NHEA) data obtained from the Centers for Medicare
& Medicaid Services (CMS), Office of the Actuary, prepared December 2021. For further information on LTSS
financing, see CRS In Focus IF10343, Who Pays for Long-Term Services and Supports?.
2 Ibid. CRS estimates based on National Health Expenditure Account (NHEA) data obtained from the Centers for
Medicare & Medicaid Services (CMS), Office of the Actuary, prepared December 2021.
3 Kim, Min-Young, Edward Weizenegger, and Andrea Wysocki, Medicaid Beneficiaries Who Use Long-Term Services
and Supports: 2019, Mathematica, July 22, 2022, https://www.medicaid.gov/medicaid/long-term-services-supports/
downloads/ltss-user-brief-2019.pdf.
4 Ibid. Total U.S. counts include 48 states and DC. Alabama, Kentucky, and Vermont were excluded because these
states had reporting errors for the Health Homes program.
5 For more information on Medicaid, see CRS Report R43357, Medicaid: An Overview.
6 For further information, see CRS Report R43847, Medicaid’s Federal Medical Assistance Percentage (FMAP).
7 For further information, see CRS Report R46111, Medicaid Eligibility: Older Adults and Individuals with
Disabilities.
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Appendix B provides data on HCBS and institutional Medicaid LTSS expenditures by service
category.
Overview of Medicaid LTSS
Medicaid law and other SSA provisions contain several statutory authorities that permit states to
offer LTSS to individuals in need of such services. In general, Medicaid law provides states with
two broad authorities:
1. Medicaid state plan coverage, which is the agreement between a state and the
federal government that describes how that state will administer its Medicaid
program.
2. Medicaid waiver program coverage, which permits states to waive certain
Medicaid statutory requirements under the state plan to allow the provision of
noninstitutional LTSS, referred to as HCBS.8
Eligible enrollees can receive services under both the Medicaid state plan and the expanded range
of HCBS under a waiver program at the same time.
LTSS Coverage Under Medicaid State Plan Versus Medicaid Waiver Program
Medicaid State Plan Coverage

States are required to cover certain state plan services (mandatory services) and may choose to cover other
additional services (optional services).
Covering LTSS under the State Plan: For example, under the state plan agreement, states are required
to cover (1) nursing facility services for individuals age 21+ and (2) home health services, while most Medicaid
state plan HCBS (e.g., personal care) are optional services that states can choose to cover.
Medicaid Waiver Program Coverage

Subject to terms and conditions of the waiver agreement and Secretary of Health and Human Services’
approval, states may choose to cover certain HCBS under one or more waiver programs.
Covering LTSS Under a Waiver: For example, states use waiver authorities under the Social Security
Act (SSA)—Section 1915(c) Home and Community-Based Waivers and Section 1115 Research and
Demonstration Waivers.
In addition, 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, referred to as
institutional LTSS, and (2) HCBS provided in home and community-based settings.
Institutional Settings
Institutional settings are residential settings that provide care on an inpatient basis (i.e., individual
stays in the setting while receiving health care or LTSS). Medicaid-covered institutional care is
provided in the following types of institutional settings: hospitals, long-term care facilities
(LTCFs) or nursing homes, Intermediate Care Facilities for Individuals with Intellectual
Disabilities (ICFs/IID), psychiatric hospitals, and Psychiatric Residential Treatment Facilities

8 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. However, in designing a Medicaid ABP, states may also choose to
offer LTSS. For further information, see CRS Report R45412, Medicaid Alternative Benefit Plan Coverage: Frequently
Asked Questions.
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(PRTFs). Other terms, such as Institutions for Mental Diseases (IMDs), refer to coverage for
Medicaid services by certain providers rather than a specific type of institutional provider or
setting and has meaning only within the context of the Medicaid program.9 That is, IMDs are not
identified as a provider type or setting by other payers, state licensing agencies, and health care
accrediting organizations.
Medicaid-covered institutional LTSS are typically provided in LTCFs and ICFs/IID; however,
mental health facilities are included in the Centers for Medicaid & Medicare Services (CMS)
LTSS expenditure reports and analysis. For this reason, this report includes some discussion of
Medicaid-coverage of institutional services in mental health facilities. Medicaid enrollee
eligibility for institutional LTSS is generally tied to the need for institutional care referred to as
level-of-care criteria, as defined by the state.
Medicaid institutional coverage assumes total care of the individual and provides comprehensive
coverage, including the cost of room and board as well as the cost of covered services.10 In
general, payment to the provider is a single bundled rate. However, states vary in what is included
in the institutional rate versus what is billed as a separately covered service. Institutions must be
licensed and certified by the state (in accordance with federal standards) and are subject to
periodic oversight surveys, among other criteria.11
Home and Community-Based Settings
Home and community-based settings are settings that deliver a range of health and social services
to an individual residing in either a private home or in a group or congregate setting referred to as
a community-based residential setting (see the text box “What are Home and Community-Based
Services?”). Home and community-based settings also include nonresidential settings such as
adult day health programs and settings that offer prevocational and educational or employment-
based training and services.
Community-based residential settings provide housing and meals (i.e., room and board) as well as
health care and social services and are referred to by a variety of names (e.g., board and care
homes, adult foster care, personal care homes, group homes, and supported living arrangements,
among others). Generally, these settings are licensed, registered, certified, or otherwise regulated
by a state. However, whether they are licensed as a health care setting, long-term care setting, or
congregate care setting can vary by state and resident population (i.e., physical disability,
intellectual disability, behavioral health or Substance Use Disorder [SUD], aged 65 and older).
Home and community-based settings that seek Medicaid reimbursement for Medicaid-covered
LTSS and other services must meet state-based Medicaid provider requirements. Alternatively,
settings may contract with qualified providers to offer Medicaid-covered LTSS to eligible
participants. Settings that seek Medicaid reimbursement specifically for home health services also
must meet federal home health agency requirements.

9 Medicaid and CHIP Payment and Access Commission (MACPAC), Report to Congress on Oversight of Institutions
for Mental Diseases, January 2020, p. xii, https://www.macpac.gov/wp-content/uploads/2020/01/Report-to-Congress-
on-Oversight-of-Institutions-for-Mental-Diseases-December-2019.pdf.
10 CMS, “Institutional Long Term Care,” https://www.medicaid.gov/medicaid/long-term-services-supports/
institutional-long-term-care/index.html.
11 CMS has oversight responsibilities over Medicaid- and Medicare-certified providers, but compliance surveys are
generally conducted by State Survey Agencies. See CRS In Focus IF11545, Overview of Federally Certified Long-
Term Care Facilities for more information on federal certification of long-term care facilities such as nursing homes.
Statute allows a subset of providers, including hospitals, to be exempt from routine surveys by State Survey Agencies if
they are accredited by an approved national accreditation organization.
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What Are Home and Community-Based Services?
Home and community-based services (HCBS) refer to a category of care that includes various types of services that
are provided to an individual for medical and other health-related purposes, as well as social services and supports
that assist with daily living and the ability to live independently in the community. Col ectively, these types of
services are provided to individuals who generally have extended care needs and require long-term services and
supports (LTSS). However, HCBS can also include services that are short-term or rehabilitative, often referred to
as post-acute care. HCBS can also include certain mental/behavioral health services and Substance Use Disorder
(SUD) services. For example, certain Medicaid HCBS authorities can cover day treatment or other partial
hospitalization services, psychosocial rehabilitation services, and clinic services for individuals with chronic mental
il ness. Various types of HCBS include, but are not limited to the fol owing:

Adult Day Health

Homemaker or Chore Services

Assistive Technology Devices and Services

Home Modifications

Case Management

Housing-Related Assistance and Supports

Caregiver Services and Supports

Personal Assistance

Employment Services and Supports

Rehabilitation

Financial Management and Legal Services

Respite

Habilitation

Nutrition Services

Health Promotion and Disease Prevention

School-Based Services

Home Health

Transportation Services
Sometimes the terms home care, home-based care, and home health are used interchangeably to refer to HCBS.
However, these terms may not always share the same meaning as the term HCBS. For example, home care may
refer to the ful range of health care that can be provided to individuals in a private home or residential setting,
which may include acute and primary care services. These services may be delivered in-person or through the use
of technology, including telehealth services. Such home care services may not be for a post-acute or LTSS need.
The term home health is often used to refer to a specific type of benefit covered separately and distinctly under
Medicaid and Medicare and is often included under the broader HCBS category.
There is no definition of HCBS under federal Medicaid law (Title XIX of the Social Security Act [SSA]). Section
9817 of the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) defines HCBS in the provision of a temporary
10-percentage-point increase to the FMAP rate for certain Medicaid-covered HCBS. Specifically, this section
defines HCBS to mean any of the fol owing service categories authorized under SSA Title XIX: home health care;
personal care; Program for All-Inclusive Care of the Elderly (PACE) services; HCBS authorized under subsections
(b), (c), (i), (j), and (k) of SSA Section 1915; case management; rehabilitative services; and such other services
specified by the Secretary of Health and Human Services (HHS); see CMS implementing guidance at
https://www.medicaid.gov/federal-policy-guidance/downloads/smd21003.pdf.
Federal Medicaid reimbursement is provided to states only for the services provided in home and
community-based settings (e.g., home health, personal care assistance, and homemaker or chore
services). The Medicaid program does not provide federal reimbursement for the cost of housing,
such as a monthly rent or mortgage payment. Specifically, federal Medicaid law prohibits federal
reimbursement for the costs of room and board in community-based residential care settings.12
State Medicaid programs may choose to offer other types of housing-related services and
supports as a covered benefit and receive a federal match for doing so, including services to assist
individuals with finding stable housing, transitioning from institutional to community living, and
home adaptations or modifications to ensure housing is accessible to individuals with
disabilities.13

12 SSA 1915(c)(1) [42 U.S.C. 1396n].
13 For more information, see CMS guidance at https://www.medicaid.gov/federal-policy-guidance/downloads/cib-06-
26-2015.pdf.
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To receive federal Medicaid reimbursement, states must ensure that HCBS provided under certain
statutory authorities are delivered in home and community-based settings that meet certain
requirements, such as being integrated in the community, offering residents a choice among
settings, ensuring residents’ rights and personal independence, and offering a choice of services or
providers. Provider-owned or controlled settings also must meet the following conditions:
tenancy agreements, residents’ privacy within their units, residents’ ability to control their own
schedules and visitor access, and physical accessibility.
Effective March 17, 2014, the HCBS settings rule requires states to develop a process, approved
by CMS, to transition their current programs into compliance. Initially, states had a five-year
period to transition (i.e., through March 17, 2019); however, CMS subsequently extended the
transition period to allow states an additional three years, through March 17, 2022, to demonstrate
compliance. Due to the impact of the COVID-19 pandemic, CMS has further extended the
timeframe for states to complete the requirement implementation of activities and has provided
states an additional year, through March 17, 2023, to demonstrate compliance with the settings
requirements.14
Medicaid LTSS Coverage
Federal law requires that state Medicaid programs cover certain LTSS for eligible participants,
such as nursing facility care for adults. However, states have a range of options that allow LTSS
coverage of certain institutional and noninstitutional LTSS, including HCBS for eligible
participants based on need. These options often allow states to target coverage to specific groups
of individuals. For example, states often tailor LTSS coverage to older adults, younger adults, or
children with physical, intellectual, or developmental disabilities, or adults receiving behavioral
health services, among other populations. These flexibilities under Medicaid law have led to
widespread variation in state Medicaid LTSS benefit packages.
One important issue for Medicaid LTSS coverage is its perceived bias in favor of institutional
care. The original 1965 Medicaid law established that eligible Medicaid beneficiaries are entitled
to nursing facility care. However, increasing expenditures for institutional care and growing
public demand for community-based alternatives have spurred federal policymakers to assist
states in increasing and diversifying their Medicaid LTSS coverage to include optional HCBS,
often referred to as “rebalancing.”15
Over time, Congress has provided state Medicaid programs with additional authority as well as
federal payment incentives to expand their HCBS offerings. For example, Section 9817 of the
American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) includes a temporary 10-percentage-point
increase to the FMAP rate for certain HCBS for those states that meet the HCBS program

14 CMS established requirements for home and community-based settings in Medicaid HCBS programs and aligns
these requirements across three Medicaid authorities under the Social Security Act (SSA)—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. For more information, see CMS, SMD # 20-003, Home and
Community-Based Settings Regulation – Implementation Timeline Extension and Revised Frequently Asked Questions,
July 14, 2020), and CMS, “Home & Community Based Services Final Regulation,” at https://www.medicaid.gov/
medicaid/home-community-based-services/guidance/home-community-based-services-final-regulation/index.html.
15 CMS, Long-Term Services and Supports Rebalancing Toolkit, November 2020, https://www.medicaid.gov/medicaid/
long-term-services-supports/downloads/ltss-rebalancing-toolkit.pdf.
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requirements during the program improvement period (i.e., April 1, 2021 through March 31,
2022). States will be able to use available ARPA funds through March 31, 2025.16
In addition, these legislative and administrative activities to expand Medicaid HCBS were
prompted by the U.S. Supreme Court decision in Olmstead v. L.C.,17 which held that the
institutionalization of people who could be cared for in community settings was a violation of
Title II of the Americans with Disabilities Act (ADA). Thus, states have a broad range of
coverage options under current law to select from when designing their LTSS programs. As a
result, the share of Medicaid LTSS spending for HCBS has increased over the past three decades,
from 12% of Medicaid LTSS spending in FY1989 to more than half (59%) of total Medicaid
LTSS spending in FY2019 (see Figure 1).18
Figure 1. Medicaid Home and Community-Based Services (HCBS) and Institutional
LTSS Expenditures as a Percentage of Total Medicaid LTSS Expenditures
(FY1989 to FY2019)

Source: Caitlin Murray et al., Medicaid Long Term Services and Supports Annual Expenditures Report: Federal Fiscal
Year 2019, Mathematica Policy Research, December 9, 2021, at https://www.medicaid.gov/medicaid/long-term-
services-supports/downloads/ltssexpenditures2019.pdf.
LTSS State Plan Coverage
The state plan is the agreement between a state and the federal government that describes how
that state administers its Medicaid program and provides assurance that the state will meet federal

16 CMS, “Updated Reporting Requirements and Extension of Deadline to Fully Expend State Funds Under American
Rescue Plan Act of 2021 Section 9817,” SMD# 22-002, June 3, 2022, https://www.medicaid.gov/federal-policy-
guidance/downloads/smd22002.pdf.
17 527 U.S. 581 (1999).
18 Caitlin Murray, Alena Tourtellotte, et al., Medicaid Long-Term Services and Supports Annual Expenditures Report,
Federal Fiscal Year 2019; Mathematica Policy Research, December 9, 2021, at https://www.medicaid.gov/medicaid/
long-term-services-supports/downloads/ltssexpenditures2019.pdf.
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Medicaid requirements in order to receive federal Medicaid funds for program activities. In
general, the Medicaid state plan describes the specific eligibility groups or populations of
individuals covered; the amount, duration, and scope of benefits to be provided, including any
optional benefits a state may choose to cover; methodologies for providers to be reimbursed; and
any administrative requirements that states must meet in order to participate.19 State plans are
developed by the states and approved by 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 federal Medicaid 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). Among the mandatory and optional Medicaid state plan LTSS benefits
described in Table 1, the only benefits that participating states are required by federal law to
cover are nursing facility services for beneficiaries aged 21 and older and home health services.
States must offer these services to all enrollees across the state as determined by medical
necessity. However, each state determines the amount, duration, and scope of these services.
States may choose to cover other optional LTSS benefits (institutional and HCBS) under the
Medicaid state plan. States also have authority to cover packages of HCBS targeted at particular
groups of beneficiaries. Similar to mandatory state plan benefits, each state determines the
amount, duration, and scope of these services. With respect to state plan services, 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 needs-based eligibility criteria.
 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.
Table 1 lists the LTSS state plan services by provider setting (institutional versus HCBS) and by
type (mandatory or optional).20 With respect to the HCBS benefits identified in Table 1, the
optional state plan benefits may either be a stand-alone benefit (e.g., case management, personal
care services) or reflect a package of HCBS benefits determined by the state that are provided
under a specific statutory authority (e.g., State Plan HCBS Optional, Community First Choice).

19 CMS, Medicaid State Plan Amendments, at http://www.medicaid.gov/State-Resource-Center/Medicaid-State-Plan-
Amendments/Medicaid-State-Plan-Amendments.html.
20 This report includes those Medicaid LTSS service categories identified in Caitlin Murray, Alena Tourtellotte, et al.,
Medicaid Long Term Services and Supports Annual Expenditures Report Federal Fiscal Year 2019, Mathematica,
December 9, 2021. This report does not include discussion of SSA Section 1929, which authorizes states to provide
HCBS for functionally disabled elderly individuals. According to the Kaiser Family Foundation, Texas is the only state
that uses this statutory authority (see Sowers, M., H. Claypool, and M. Musumeci, Streamlining Medicaid Home and
Community-Based Services: Key Policy Questions, Kaiser Family Foundation, March 2016, http://files.kff.org/
attachment/issue-brief-streamlining-medicaid-home-and-community-based-services-key-policy-questions). In addition,
this report does not include discussion of the Medicaid Money Follows the Person Rebalancing Demonstration
Program. For more information, see CRS In Focus IF11839, Medicaid’s Money Follows the Person Rebalancing
Demonstration Program.
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These HCBS benefits packages may include services that are similar to those covered under
Medicaid waiver authorities such as the SSA Section 1915(c) HCBS waiver program, which
allows states additional flexibility to cover other specified HCBS, subject to HHS Secretary
approval (see the “Medicaid HCBS Waiver Programs” and “Key Features of Selected Coverage
of HCBS Under Medicaid” sections for more information).
Table 1. Key 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)(30)]
Intermediate Care Facilities for Individuals with
Intellectual Disabilities (ICFs/IID)
[SSA §1905(a)(15)]a
Institutional
Services in Institutions for Mental Diseases
Services
(IMDs) (age 65 and older)
[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
[SSA §1945]
Personal Care Services
[SSA §1905(a)(24)]
Private Duty Nursing Services
[SSA §1905(a)(8)]
Home &
Program of All-Inclusive Care for the Elderly
Community-
(PACE)
Based
[SSA §1905(a)(26)]
Services
Rehabilitative Services
[SSA §1905(a)(13)]
State Plan Home and Community-Based Services
(HCBS)
[SSA §1915(i)]
Self-Directed Personal Assistance Services (PAS)
[SSA §1915(j)]
Community First Choice (CFC)
[SSA §1915(k)]
Sources: CRS. For the ful -range of Medicaid state plan mandatory and optional benefits, see the Centers for
Medicare & Medicaid Services website at https://www.medicaid.gov/medicaid/benefits/mandatory-optional-
medicaid-benefits/index.html.
a. Federal Medicaid law uses the term “intermediate care facilities for the mentally retarded” and the
abbreviation “ICFs/MR”; however, federal agencies use the term “intermediate care facilities for individuals
with intellectual disabilities (ICFs/IID).”
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The following describes these coverage options in greater detail. For state-specific information
about certain selected optional benefits included in Table 1, see Table A-1.
Institutional Services
Under Medicaid statute, “institutional services” refer to specific benefits authorized in the SSA,
including hospital services, nursing facility services, intermediate care facilities for individuals
with intellectual disabilities (ICFs/IID), and inpatient psychiatric services for individuals under
age 21, which may be provided in hospital settings or psychiatric residential treatment facilities
(PRTFs) and institutions for mental diseases (IMDs).
Mandatory Institutional State Plan Services
The original 1965 Medicaid law established nursing facility care as a mandatory Medicaid LTSS
benefit for adults aged 21 and over. Even though nursing facility institutional services are
mandatory for enrollees who meet their state’s financial and needs-based eligibility criteria, states
can define amount, duration, and scope of services within broad federal guidelines, so coverage
varies by state.
Nursing Facility Services
States are required to cover nursing facility services for beneficiaries aged 21 and over under their
Medicaid plans.21 States have the option to cover nursing facility services for beneficiaries under
age 21.22 According to CMS, all states provide this optional service.23 Beneficiaries must also
meet state-defined nursing home eligibility criteria, often 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.24
Optional Institutional State Plan Services
Beyond the required coverage of nursing facility services, states have the option to cover
additional institutional services such as services provided in ICFs/IID and institutional mental
health services for certain populations under their Medicaid state plans. Even though these are
optional services, states that offer them must follow federal minimum standards to receive federal
Medicaid funding, but amount, duration, and scope can vary by state.
Services in Intermediate Care Facilities for Individuals with Intellectual
Disabilities (ICFs/IID) 25
States may provide services to eligible Medicaid beneficiaries residing in ICFs/IID as an optional
service under a state’s Medicaid plan. The primary purpose of the ICFs/IID is to furnish health or

21 SSA §1902(a)(10)(A) [42 U.S.C. 1396a(a)(10)(A)]; and SSA §1905(a)(4) [42 U.S.C. 1396d(a)(4)].
22 SSA §1905(a)(30) [42 U.S.C. 1396(a)(30)].
23 CMS, “Nursing Facilities,” at https://www.medicaid.gov/medicaid/long-term-services-supports/institutional-long-
term-care/index.html.
24 42 C.F.R. §§483.1-483.95.
25 Federal Medicaid law uses the term “intermediate care facilities for the mentally retarded” and the abbreviation
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rehabilitative services to persons with intellectual disabilities or other related conditions.26
ICFs/IID must provide certain services including nursing, physician, dental, pharmacy, and
laboratory services.27 According to CMS, beneficiaries who receive services in an ICF/IID are
likely to have other disabilities or conditions in addition to intellectual disabilities, such as seizure
disorders, behavior issues, and/or mental illness.28 Medicaid specifies that ICFs/IID 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 training, treatment, and health services.29 In 2018, 43 states and the District of
Columbia (DC) reported covering services in an ICF/IID.30
Institutional Mental Health Services31
Two Medicaid statutory authorities cover inpatient mental health services, each targeting a
specific subset of individuals: (1) those individuals aged 65 and over, and (2) those individuals
under age 21.32 Medicaid coverage of inpatient mental health services includes diagnosis and
medical treatment, as well as nursing care and related services under the direction of a physician
and covers services in specific types of facilities that are different for each of the following
benefits:
 Institutions for Mental Disease for Individuals Aged 65 years and Over.
States have the option to provide Medicaid coverage for inpatient mental health
services delivered in hospitals or nursing facilities that are considered institutions
for mental disease (IMD) to eligible beneficiaries aged 65 years and over. 33 In
2018, 41 states and DC reported covering services in IMDs to individuals aged
65 and over.34
 Inpatient Psychiatric Care for Enrollees Under Age 21. States have the option
to provide inpatient psychiatric hospital services in a psychiatric hospital, a
psychiatric unit in a hospital, or a psychiatric residential treatment facility for
individuals under age 21.35 This is commonly referred to as the “Psych Under 21”

“ICFs/MR”; however, federal agencies use the term “intermediate care facilities for individuals with intellectual
disabilities” and the abbreviation ICFs/IID, which is the term and abbreviation used in this report.
26 SSA §1905(d) [42 U.S.C. §1396d(d)].
27 42 C.F.R. §483.460.
28 CMS, Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICFs/IID), at https://www.cms.gov/
Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/ICFIID.
29 42 C.F.R. §483.440.
30 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Intermediate Care Facility Services for
Individuals with Intellectual Disabilities, 2018,” at https://www.kff.org/medicaid/state-indicator/intermediate-care-
facility-services.
31 This section of the report was authored by Alison Mitchell, CRS Specialist in Health Care Financing.
32 The Medicaid institutions for mental disease (IMD) exclusion rule prohibits the federal government from providing
federal Medicaid funds to states for services rendered to certain Medicaid-eligible individuals aged 21 through 64 who
are patients in IMDs. For more information, see CRS In Focus IF10222, Medicaid’s Institutions for Mental Disease
(IMD) Exclusion.
33 SSA §1905(a)(14) [42 U.S.C. §1396d(a)(14)].
34 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Services in Institutions for Mental Disease, Age
65 and Older, 2018” at https://www.kff.org/medicaid/state-indicator/services-in-institutions-for-mental-disease-age-65-
and-older/.
35 SSA §1905(a)(16) and (h) [42 U.S.C. 1396d(a)(16) and (h)]; 42 C.F.R. §441.151.
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benefit. For states that do not offer the Psych Under 21 benefit, a determination
of medical necessity under Medicaid’s early and periodic screening, diagnostic,
and treatment (EPSDT) benefit would require the state pay for inpatient
psychiatric services that are provided in these settings.36 State reported data
regarding Psych Under 21 coverage is not available.
Private Duty Nursing
States may offer private duty nursing services to beneficiaries who require greater individual and
continuous care than what is routinely provided by the nursing staff in a hospital or nursing
facility.37 When private duty nursing is provided in institutional settings, the benefit does not
include room and board. Private duty nursing can also be provided in community-based settings
(see the “Optional State Plan HCBS” section below). Private duty nursing is intensive skilled
nursing care 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. These skilled nursing services are provided by a registered nurse or a licensed
practical nurse under the direction of the beneficiary’s physician. In 2020, 31 states reported
covering any private duty nursing services.38
Home and Community-Based Services (HCBS)
HCBS refer to a category of various types of LTSS that are delivered in private homes and
community settings, such as adult day health centers, assisted living facilities, and similar types
of community-based residential settings, as opposed to institutional settings, such as hospitals or
nursing homes. HCBS includes health services that are provided for medical and other health-
related purposes, as well as social services and supports that assist individuals with activities of
daily living and provide support for independent living in the community. This section of the
report focuses on Medicaid coverage of HCBS that are provided to individuals who have a need
for LTSS.
Mandatory State Plan HCBS
Home health is the only mandatory HCBS benefit under a Medicaid state plan. States must
provide the home health benefit for enrollees who meet their state’s financial and needs-based

36 Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is a broad Medicaid pediatric benefit available to
most enrollees under age 21. EPSDT encompasses periodic screenings (comprehensive child health assessments,
including physical examinations, preventive dental services, vision and hearing testing, appropriate immunizations, and
laboratory tests), certain interperiodic screenings, diagnosis, and treatment. States are required to furnish all Medicaid-
coverable, appropriate, and medically necessary services needed to correct and ameliorate health conditions identified
during a health care screening. EPSDT services may cover certain LTSS that are medically necessary for children and
young adults under the age of 21. For more information on EPSDT, see CMS, “Early and Periodic Screening,
Diagnostic, and Treatment,” at https://www.medicaid.gov/medicaid/benefits/early-and-periodic-screening-diagnostic-
and-treatment/index.html.
37 42 C.F.R. §440.80.
38 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-appendix/#table7. This data do not distinguish whether the private duty nursing service was offered in an
institutional or community-based setting.
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eligibility criteria, but states can define amount, duration, and scope of services within broad
federal guidelines, so coverage varies by state.
Home Health Services
Home health services are a mandatory benefit linked to requirements that states provide nursing
facility coverage for certain individuals.39 States must cover home health services for
categorically eligible individuals aged 21 and older who are entitled to nursing facility coverage
under a state’s Medicaid state plan.40,41 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. 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. Further, Medicaid home
health services are not limited to beneficiaries who are homebound, nor are they required to be
furnished in the place of residence, with certain exceptions.42
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.43 States have
the flexibility to offer additional therapeutic services under the home health benefit, such as
physical therapy, occupational therapy, speech pathology, and audiology services. In 2018, most
states reported expanding the scope of their mandatory home health benefit to include these
optional therapies.44 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,
nurse practitioner, clinical nurse specialist, or physician assistant as part of a written plan of care
and reviewed by the physician every 60 days.

39 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.
40 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 with income 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.
41 Individuals who are eligible for nursing facility services are not necessarily entitled to such care. To be entitled to
nursing facility services, eligible individuals must also meet state-based nursing facility eligibility criteria or
institutional level-of-care criteria. Federal regulations specify coverage groups entitled to home health as (1)
categorically eligible individuals aged 21 or over; (2) categorically eligible individuals under age 21 if the state plan
provides nursing facility services to this population group; and (3) medically needy individuals to whom nursing
facility services are provided under the state plan (42 C.F.R. §441.15).
42 See 42 C.F.R. §440.70(c)(1).
43 See 42 C.F.R. §440.70.
44 In 2018, 44 states covered these optional services, 2 states (Alabama and Oklahoma) do not, and 5 states did not
report; see Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Home Health Services – Physical
Therapy, Occupational Therapy, and/or Speech Pathology/Audiology, 2018,” at https://www.kff.org/other/state-
indicator/medicaid-benefits-home-health-services-including-physical-therapy-occupational-therapy-and-or-speech-
pathology-audiology.
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Optional State Plan HCBS
Beyond the required coverage of home health services, states have the option to cover additional
HCBS under their Medicaid state plan. Even though these are optional services, states that offer
them must follow federal minimum standards to receive a federal Medicaid funding, but amount,
duration, and scope can vary by state.
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. As with the case management benefit, states can use
targeted case management to help such individuals gain 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. In FY2020, 30 states reported
covering case management services.45
Health Homes
States may establish and offer health homes, which integrate physical and behavior health
services with LTSS for Medicaid beneficiaries with complex care needs, as an optional Medicaid
state plan benefit.46 The health home benefit includes six core services, which are listed in federal
statute and are defined by the state. These six core services are comprehensive care management;
care coordination; health promotion; comprehensive transitional care and follow-up; individual
and family support; and referral to community and social support services.47 States determine the
type of providers that can deliver the health home benefit (i.e., physicians, rural health clinics,
teams of health professionals, etc.) within certain federally determined parameters.
To qualify for the health home benefit, a Medicaid beneficiary must have at least two chronic
conditions, or have one chronic condition and be at risk for another, or have one serious and
persistent mental health condition.48 Qualifying chronic conditions include a mental health
condition, substance use disorder, asthma, diabetes, heart disease, being overweight, or other

45 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-appendix/#table8.
46 SSA §1945 [42 U.S.C. §1396w-4].
47 CMS, “Medicaid Health Homes: An Overview,” Fact Sheet, April 2021, at medicaid.gov/state-resource-
center/medicaid-state-technical-assistance/health-home-information-resource-center/downloads/hh-overview-fact-
sheet.pdf.
48 SSA §1945 [42 U.S.C. §1396w-4(h)(1)(A)].
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conditions as allowed by the HHS Secretary.49 States can target the health home benefit to
Medicaid beneficiaries with certain qualifying medical conditions and also geographically;
however, they must offer the benefit to all categorically needy individuals that meet the state’s
eligibility criteria and without consideration to age.50 In 2018, 22 states and DC reported offering
health homes as a covered service.51
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.52 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 prompting an individual to perform the task by himself or
herself. For individuals with cognitive impairments, such assistance may also include supervising
or prompting an individual to perform 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). In general, 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/IID), or psychiatric
institutions.53 Personal care services must be provided by a qualified provider and may be
furnished by family members of the Medicaid participant, with the exception of legally
responsible relatives (i.e., spouse or parent of minor children). Furthermore, the provision of
personal care services may be directed by the beneficiary, including the beneficiary having the

49 SSA §1945 [42 U.S.C. §1396w-4(h)(2)].
50 CMS, at https://downloads.cms.gov/cmsgov/archived-downloads/SMDL/downloads/SMD10024.pdf.
51 Health Homes refers to health homes as established by Section 2703 of the Affordable Care Act. Kaiser Family
Foundation, “State Health Facts, Medicaid Benefits: ACA Health Homes, 2018,” at https://www.kff.org/other/state-
indicator/medicaid-benefits-aca-health-home/.
52 As per SSA §1905(a)(24) [42 U.S.C. §1396d]; 42 C.F.R. §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.
53 Section 3715 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) authorizes
states to continue to provide HCBS to individuals in acute care hospitals. Such services must meet the needs of the
individual that are not met through the provision of hospital services and are in addition to, and may not substitute for,
the services the hospital is obligated to provide. HCBS provided must also be identified in the individuals’ person-
centered service plan and be designed to ensure smooth transitions between acute care settings and home and
community-based settings and to preserve the individual’s functional abilities. Additionally, states must describe the
services provided by the HCBS provider or caregiver to avoid duplication of services, how the HCBS will assist the
individual in returning to the community, and any differences in the typical billed rate for HCBS provided during
hospitalization. For more information, see CRS Report R46334, Selected Health Provisions in Title III of the CARES
Act (P.L. 116-136), and CMS, Covid-19 Frequently Asked Questions (FAQs) for State Medicaid and Children’s Health
Insurance Program (CHIP) Agencies (last Updated January 6, 2021), at https://www.medicaid.gov/state-resource-
center/downloads/covid-19-new-faqs.pdf.
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ability to hire, train, and supervise personal care attendants.54 In FY2020, 36 states and DC
reported covering personal care services.55
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.56 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. Private
duty nursing can also be provided in institutional settings (see the “Optional Institutional State
Plan Services” section above). Private duty nursing is intensive skilled nursing care provided by a
registered nurse or a licensed practical nurse under the direction of the beneficiary’s physician.
Such services can be provided to a beneficiary in a community-based setting, including outside of
the home when a recipient’s normal life activities take the recipient into other community
settings, such as school. However, the benefit is limited to Medicaid beneficiaries who need such
services in the home.57 In FY2020, 31 states reported covering any private duty nursing
services.58
Program for All-Inclusive Care for the Elderly (PACE)59
The Program for All-Inclusive Care for the Elderly (PACE) is a federal-state program that
provides eligible, frail elderly individuals with a community-based alternative to other LTSS
delivery options.60 Organizations that provide PACE, which are nonprofit as well as for-profit
entities, integrate Medicare and Medicaid services and operate similarly to health maintenance
organizations (HMOs). The PACE programs these organizations provide include a full range of
social and medical home-and-community based services, for example adult day health, home
health, and social services, as well as traditional acute care medical services.61 In FY2020, 33
states reported offering PACE as a covered service.62

54 SSA §1915(j) expands participant direction for personal care services for states offering such care under their
Medicaid state plan or offering a SSA §1915(c) HCBS waiver program. See the “Self-Directed Personal Care
Assistance” section below.
55 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices About Medicaid Home
and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-
the-pandemic-appendix/#table6.
56 42 C.F.R. §440.80.
57 CMS, Section 4310 of the State Medicaid Manual, at http://www.cms.gov/Regulations-and-Guidance/Guidance/
Manuals/Paper-Based-Manuals-Items/CMS021927.html.
58 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-appendix/#table7. This data do not distinguish whether the private duty nursing service was offered in an
institutional or community-based setting.
59 This section of the report was authored by Cliff Binder, CRS Analyst in Health Care Financing.
60 States must amend their state Medicaid plans to provide PACE as an optional Medicaid benefit.
61 PACE Manual, Chapter 1–Introduction to PACE, 30.2 PACE Organizations.
62 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at
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To qualify for PACE programs, individuals must reside in a PACE center service area, be at least
age 55, require nursing home levels of care as determined by state Medicaid programs, and at the
time of enrollment be able to live safely in a community setting with PACE assistance.63 Most
PACE participants are eligible for both Medicare and Medicaid (dually eligible), but Medicare or
Medicaid eligibility is not required to enroll in the PACE program.64
PACE organizations, like HMOs, are paid a capped fixed monthly fee regardless of the care
needed by PACE participants, including prescription drugs. PACE participants do not have
deductibles, co-payments, or other cost sharing requirements.65 PACE organizations receive
capitated payments from Medicare as well as state Medicaid programs.66 Generally, Medicare
covers the acute care portion of PACE benefits, while Medicaid covers the LTSS and additional
social support benefits. Individuals not covered by Medicare and/or Medicaid are financially
responsible for the premiums for the program(s) for which they are ineligible.67 Typically, PACE
programs deliver most health and social services needed by PACE participants at community-
based centers, most often adult day care centers. PACE organizations also are required to have
contracts for ambulatory, inpatient, and specialty care providers to ensure that the full range of
acute and long-term care that may be needed by PACE participants is available.68
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.”69 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/IID. Services provided under the
optional Medicaid rehabilitative benefit span a wide range of treatments. States may use the
rehabilitative services benefit option to provide services to beneficiaries diagnosed with mental

https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-appendix/#table10.
63 Programs of All-Inclusive Care for the Elderly (PACE) Manual, Chapter 4–Enrollment and Disenrollment, 10.2
Eligibility Criteria.
64 In 2022, approximately 90% of PACE participants were dually eligible for Medicare and Medicaid. National PACE
Association, PACE by the Numbers.
65 PACE Manual, Chapter 1–Introduction to PACE, 30.3 Eligibility and Benefits.
66 PACE Manual, Chapter 13–Payments to PACE Organizations, 10.1 General Payment Principles.
67 PACE Manual, Chapter 1–Introduction to PACE, 30.4, Payments to PACE Organizations.
68 The PACE model of care relies on an Interdisciplinary Team (IDT) composed of a required mix of specific types of
health professionals. PACE Manual, Chapter 8 – IDT, Assessment & Care Planning, 10.1, IDT Composition.
69 SSA §1905(a)(13) [42 U.S.C. §1396d(a)(13)].
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health conditions or substance use disorders, and/or to provide beneficiaries with physical,
occupational, and speech therapy. In FY2020, 24 states reported covering rehabilitative services.70
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 their 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, $1,699 per
month for an individual in 2022),71 and
 have a level-of-care need that is less than the level of care required in an
institution, as defined by the state.
States may extend eligibility for the Section 1915(i) benefit to beneficiaries with incomes up to
300% of the Supplemental Security Income (SSI) federal benefit rate ($2,523 per month for an
individual in 2022)72 for those eligible for HCBS under home and community-based waiver
programs.73 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.74
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. When states target the state plan HCBS option to certain groups of beneficiaries,
such state plan amendments are for five-year periods (i.e., an initial five-year period and
subsequent five-year renewal periods).75 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 eligibility 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 2 in the “Medicaid HCBS Waiver
Programs” section 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,

70 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-appendix/#table9.
71 HHS, “Poverty Guidelines, HHS Poverty Guidelines for 2022,” at https://aspe.hhs.gov/poverty-guidelines.
72 SSA, “Fact Sheet: 2022 Social Security Changes,” at https://www.ssa.gov/news/press/factsheets/colafacts2022.pdf.
73 Includes Medicaid waiver programs authorized under SSA §1115 or SSA §1915(c), (d) or (e).
74 States may also create a new SSA §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.
75 SSA §1915(i)(7)(B) [42 U.S.C. §1396n(i)(7)(B)].
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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.76 In FY2020, 12 states and DC reported having a Section 1915(i) state plan HCBS option
in place.77
Self-Directed Personal Care Assistance Services (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 responsible relatives to provide care (such as spouses or parents) and
purchase nontraditional 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 2018, 21 states reported participating in the Section 1915(j) PAS state plan option.78
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.79 Eligible beneficiaries
include those who are (1) eligible for medical assistance under the state plan, and (2) in an

76 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. For further information about regulatory implementation, see CMS,
“Home and Community-Based Services Final Regulation,” https://www.medicaid.gov/medicaid/home-community-
based-services/guidance/home-community-based-services-final-regulation/index.html.
77 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices About Medicaid Home
and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-
the-pandemic-appendix/#table6.
78 Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Self-Direct Personal Assistance Services, 2018,”
at https://www.kff.org/other/state-indicator/medicaid-benefits-personal-assistance-services/.
79 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. To the extent applicable,
the increased FMAP under Section 9817 of ARPA (P.L. 117-2) was additive to the increased CFC FMAP specified in
SSA Section 1915(k); see CMS, Implementation of American Rescue Plan Act of 2021 Section 9817: Additional
Support for Medicaid Home and Community-Based Services during the COVID-19 Emergency, SMD# 21-003, May
13, 2021, https://www.medicaid.gov/federal-policy-guidance/downloads/smd21003.pdf.
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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.80 States must provide these services on a statewide
basis and in the most integrated community-based setting in which individuals with disabilities
interact with nondisabled 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).81 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 nonmedical transportation or purchasing a microwave
oven.82
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. In FY2020, nine
states had a CFC option in place.83
Medicaid HCBS Waiver Programs
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.
Waiver programs 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.
In addition, states must demonstrate certain federal spending requirements over the period of the
waiver program, referred to as cost neutrality and budget neutrality. States may also cap the

80 Ibid., p. 26837.
81 42 C.F.R. §441.550.
82 CMS, “Medicaid Program; Community First Choice; Final Rule,” 77 Federal Register 26828, May 7, 2012.
83 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices About Medicaid Home
and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-
the-pandemic-appendix/#table6.
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enrollment in these programs by setting a numerical limit. Because state Medicaid HCBS waiver
programs often have greater demand than the number of available waiver “slots” for a given
program, limiting the number of individuals receiving HCBS is one way for states to contain
costs. As a result, many states maintain waiting lists (sometimes referred to as interest lists,
planning lists, and registries) when their program slots are filled or when state legislatures do not
fully fund the maximum number of waiver slots under the CMS-approved waiver program.
Together, these waiver programs operate side-by-side with state plan authorities offering states a
range of options in designing their LTSS benefit packages for eligible beneficiaries.
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, as defined by the state. Some states also use the
waiver authority under SSA Section 1115, Research and Demonstration Projects, to cover HCBS.
Of the 267 approved waivers for HCBS in FY2020, 255 were Section 1915(c) waivers and 12
were Section 1115 waivers.84 States often have multiple Medicaid waiver programs that operate
side-by-side with the Medicaid state plan authority. These waiver options are described in greater
detail below.85
Section 1915(c) Waivers
Section 1915(c) waivers, often referred to as HCBS waivers, 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 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 2. 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

84 Ibid., https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-
amid-the-pandemic-issue-brief/.
85 SSA §1915(d) and (e) provide waiver authority for the provision of HCBS to elderly individuals and certain children,
respectively. According to CMS, no state elects to provide services under these authorities and therefore they are not
described in this report. 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.
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substantial state-to-state variation in naming conventions and service definitions across Section
1915(c) waiver programs.
Table 2. 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 noninstitutional, 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 skil s necessary for individuals to reside successful y
in home and community-based settings. May include the fol owing 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 C.F.R. §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.
Other (Secretary approved) Other specified services under the waiver program may include home
modifications, skil ed nursing services, nonmedical transportation, specialized
medical equipment and supplies, personal emergency response systems, adult foster
care, and assisted living services, among others.
Source: SSA §1915(c) HCBS Waiver Application Instructions, “Appendix C: Participant Services,” at
http://157.199.113.99/WMS/help/35/appInstrSecC.html.
Notes: Covered services are those listed in SSA §1915(c)(4)(B) [42 U.S.C. §1396n]. For individuals with chronic
mental il ness, the HHS Secretary may also approve the fol owing 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
C.F.R. §440.167. A state may offer personal care under a waiver when (1) it does not offer personal care
under its state plan; (2) its coverage under the waiver differs in scope and nature from the coverage under
the state plan; or (3) the state wishes to furnish personal care services in an amount, duration, or frequency
that exceeds the limits in the state plan.
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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 aged 65 and older, or individuals with mental illness. States also have the option to
combine target groups within one waiver program. 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.86
Eligible waiver participants must meet certain financial requirements (including income and
resource requirements) and state-defined needs-based eligibility criteria or level-of-care criteria
that demonstrate the need for institutional 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, ICF/IID, or hospital care.
Under Section 1915(c), the HHS Secretary has
Needs-Based Eligibility Criteria
the authority to waive Medicaid’s
In general, states determine an eligible individual’s need
“statewideness” requirement to allow states to
for Medicaid covered LTSS, both institutional and
offer HCBS in a limited geographic area. The
HCBS. To define needs-based eligibility, sometimes
HHS Secretary may also waive the
referred to as level-of-care criteria, states may use
“functional” eligibility criteria such as an individual’s
“comparability” requirement that services be
ability to perform certain self-care activities, often
comparable in amount, duration, or scope for
referred to as Activities of Daily Living (ADLs; e.g.,
individuals in particular eligibility categories.
eating, bathing, dressing, and walking). Functional
States may use the Section 1915(c) waiver to
eligibility criteria also include the ability to perform
limit the number of individuals served by
certain household activities, often referred to as
Instrumental Activities of Daily Living (IADLs; e.g.,
capping enrollment. The Section 1915(c)
shopping, housework, and meal preparation) that allow
waiver is time limited, and waiver approvals
an individual to live independently in the community.
are subject to reporting and evaluation
Along with functional eligibility criteria, states may also
requirements. State-approved Section 1915(c)
use “clinical” criteria that include diagnosis of an il ness,
waivers must also meet a “cost-neutrality”
injury, disability or other medical condition, treatment
and medications, and cognitive status, among other
test, where average Medicaid expenditures for
information (i.e., autism or intellectual disability, serious
waiver participants cannot exceed institutional
mental il ness, traumatic brain injury).
care expenditures that would have been
Of the 267 HCBS waivers in FY2020, 242 waivers used
incurred absent the waiver. Among states with
the same functional eligibility criteria as required for
Section 1915(c) waivers, the majority of states
nursing facility eligibility (i.e., institutional care).
(75%) reported in 2018 that they used cost-
Moreover, 20 waivers across 10 states used functional
eligibility criteria that were less restrictive than those
containment strategies in addition to the
required for institutional care, and 5 waivers across 4
federally mandated cost neutrality
states used functional eligibility criteria that were more
requirement, such as fixed expenditure caps
restrictive. Self-care needs were more frequently
either applied to individual participants or in
required to establish functional eligibility than
household activity needs. Among those HCBS waivers
aggregate as well as service limitations, and
that require self-care needs for eligibility, most require
individuals to need help with three or more activities.87

86 States have the option to combine target groups within one waiver program; 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. Prior to this regulatory 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.
87 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices about Medicaid Home
and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at
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geographic limits.88 Expenditures under these waivers are matched at the state’s regular FMAP
rate.
In FY2020, more than 1.9 million Medicaid beneficiaries were receiving services under Section
1915(c) HCBS waivers.89 At that time, 46 states and DC offered at least one Section 1915(c)
HCBS waiver, with states generally offering multiple waivers targeting HCBS to different
groups.90 Of the 255 Section 1915(c) HCBS waivers in FY2020, 46 states and DC had at least one
Section 1915(c) waiver for populations with intellectual and/or developmental disabilities; 36
states and DC had at least one waiver targeting seniors and adults with physical disabilities; and
21 states targeted traumatic brain injury/spinal cord injury populations with their waivers.
Additional populations served by Section 1915(c) waivers in FY2020 included medically
fragile/technology dependent children (18 states), adults with physical disabilities (15 states),
mental health (11 states), seniors (8 states), and HIV/AIDS (5 states).91
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.92 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 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

https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-
the-pandemic-issue-brief/.
88 MaryBeth Musumeci, Molly O’Malley Watts, and Priya Chidambaram, Key State Policy Choices About Medicaid
Home and Community-Based Services, Kaiser Family Foundation, Issue Brief, February 2020, p. 51, at
https://files.kff.org/attachment/Issue-Brief-Key-State-Policy-Choices-About-Medicaid-Home-and-Community-Based-
Services.
89 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-issue-brief/.
90 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices about Medicaid Home
and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-
the-pandemic-appendix/#table1.
91 Ibid.
92 SSA §1903 [42 U.S.C. 1396b] describes the conditions under which federal financial participation is available. SSA
§1115(a)(2) stipulates that expenditures under a waiver are eligible for federal Medicaid funding under SSA §1903.
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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.93
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 with Section 1915(c) HCBS
waivers, the use of Section 1115 waivers offers states some additional flexibilities in the design of
the 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.
In FY2020, four states (Arizona, New Jersey, Rhode Island, and Vermont) used Section 1115
waivers to provide Medicaid-covered HCBS to all eligible populations, and eight states
(California, Delaware, Hawaii, New Mexico, New York, Tennessee, Texas, and Washington) used
a combination of Section 1115 waivers and Section 1915(c) waivers to cover specific subsets of
eligible individuals within a particular state.94 Section 1115 waivers that provided HCBS covered
over 1.1 million individuals during this time period.95 Ten states (Arizona, California, Delaware,
Hawaii, New Jersey, New Mexico, New York, Rhode Island, Tennessee, and Texas) used Section
1115 waivers to utilize Medicaid managed care programs for HCBS waiver recipients. Kansas
and North Carolina used joint Section 1115 and Section 1915(c) HCBS waivers for capitated
Medicaid managed care programs that included HCBS.96

93 SSA §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 SSA §1115(e) and at §1115(f), respectively.
94 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices about Medicaid Home
and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-
the-pandemic-issue-brief/.
95 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-appendix/#table1.
96 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices about Medicaid Home
and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at
https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-
the-pandemic-issue-brief/, see Figure 5.
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Key Features of Selected Coverage of HCBS Under
Medicaid
As previously discussed, states have a range of options in covering HCBS under Medicaid. Table
3 compares key features of selected optional statutory authorities. 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 service may determine whether all Medicaid beneficiaries have access to these services
statewide or if access is limited to beneficiaries in 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.97

97 Molly O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022,
https://www.kff.org/report-section/medicaid-home-community-based-services-people-served-and-spending-during-
covid-19-issue-brief/, see Table 1. For further discussion of HCBS taxonomy, see Victoria Peebles and Alex Bohl, The
HCBS Taxonomy: A New Language for Classifying Home and Community-Based Services, Medicare & Medicaid
Research Review, vol. 4, no. 3, CMS Office of Information Products & Data Analytics, 2014, http://dx.doi.org/10.5600/
mmrr.004.03.b01.
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Table 3. Key Features of Selected Coverage of Home and Community-Based Services (HCBS) Under Medicaid
§1915(k) Community
Optional HCBS State
§1915(i) HCBS
First Choice State Plan
Feature
Plan Benefits
§1915(c) HCBS Waiver
State Plan Benefits
Benefits
§1115 Waiver
Benefit
States must provide services
States can target services to
States can target services to
States must provide services
States can target services to
Eligibility
to all categorical y eligible
specific populations (e.g., age
specific populations (e.g., age
to all individuals who are
specific populations (e.g., age
individuals who are enrol ed
and diagnosis) who meet the
and diagnosis) but must
enrol ed in Medicaid in an
and diagnosis) who meet the
in Medicaid and meet the
needs-based eligibility criteria,
provide services to all
eligibility group under the
needs-based criteria identified
needs-based eligibility criteria
and can limit the number of
individuals in an eligibility
state plan that covers nursing
in the waiver, and can limit
people served
group who meet the
facility services or, if not in
the number of people served
applicable financial and needs-
such group, have an income
based eligibility criteriaa
that is at or below 150% of
FPL. Individuals must also
meet the needs-based
eligibility criteria
Geographic
Services must be available
Services can be limited to
Services must be available
Services must be available
Services can be limited to
Criteria
statewide
certain geographic area(s)
statewide
statewide
certain geographic area(s)
Needs-
Beneficiaries must meet state-
Beneficiaries must meet state-
Beneficiaries must meet state-
Beneficiaries must meet state-
Beneficiaries must meet state-
Based
defined needs-based eligibility
defined institutional level-of-
defined needs-based eligibility
defined institutional level-of-
defined needs-based eligibility
Eligibility
criteria
care criteria
criteria that are less stringent
care criteria
criteria
Criteria
than state-defined
institutional level-of-care
criteria

Beneficiaries eligible for

certain approved waiver
programs with income that
does not exceed 300% of the
Supplemental Security Income
(SSI) income federal benefit
rate may also have to meet
institutional level-of-care
criteria
Coverable
Only federally specified
A broad array of state-defined
Same as Section 1915(c)
Coverage includes personal
A broad array of state-
Services
services for each of the
services, some of which are
HCBS waiver
care attendant services and
defined services, some of
fol owing: personal care,
specified in federal statute, such
supports and may include
which are specified in federal
private duty nursing, case
as adult day health, case
transition costs (e.g., first
statute, such as adult day
CRS-26

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§1915(k) Community
Optional HCBS State
§1915(i) HCBS
First Choice State Plan
Feature
Plan Benefits
§1915(c) HCBS Waiver
State Plan Benefits
Benefits
§1115 Waiver
management, and
management, habilitation,
month’s rent, utilities) and
health, case management,
rehabilitative services
homemaker, home health aide,
services that improve
habilitation, homemaker,
personal care, respite care, and
independence or substitute
home health aide, personal
other Secretary-approved
for human assistance, such as
care, respite care, and other
servicesb
nonmedical transportation
Secretary-approved services
services
Permits
Relatives who are not legally
Relatives, including those legally
Same as Section 1915(c)
Same as Section 1915(c)
Same as Section 1915(c)
Payment of
responsible may provide
responsible, may be paid to
HCBS waiver
HCBS waiver
HCBS waiver
Relatives
personal care
provide personal care and other
services under specific
circumstances as determined by
the state
FMAP Rate
Regular state FMAP rate
Regular state FMAP rate
Regular state FMAP rate
6% enhanced state FMAP
Regular state FMAP rate
ratec
Subject to
No
Yes, initial term of three years,
Yes, renewable every five
No
Yes, generally an initial term
Renewal
renewable for five-year periodsd years
of five years, renewable for
three to five year periods
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, and 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 SSA §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 ful Medicaid benefits to this new eligibility group.
b. For individuals with chronic mental il ness, the HHS Secretary may also approve the fol owing services: day treatment or other partial hospitalization services,
psychosocial rehabilitation services, and clinic services (whether or not furnished in a facility).
c. The SSA §1915(k) Community First Choice 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.
CRS-27

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Appendix A. Optional Medicaid Long-Term Services and Supports (LTSS)
State Plan Benefits
Table A-1. Coverage of Selected Optional Medicaid Long-Term Services and Supports (LTSS) State Plan Benefits, by State

Institutional Services
Home and Community-Based Services
Self-
Case
Health
Pers.
Priv. Duty
State Plan Directed
State
ICFs/IIDa
IMD 65+b
Mngmt.c
CFCd
Homese
PACEf
Careg
Nurs.h
Rehab.i
HCBSj
PASk
Yeark
2018
2018
2020
2020
2018
2020
2020
2020
2020
2020
2018
Alabama
Yes
Yes
Yes
—
Yes
Yes
—
No
No
—
No
Alaska
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
—
No
Arizona
Yes
Yes
Yes
—
No
No
—
Yes
—
—
No
Arkansas
Yes
Yes
No
—
—
Yes
Yes
No
No
Yes
—
California
Yes
Yes
No
Yes
Yes
Yes
Yes
No
—
Yes
Yes
Colorado
Yes
Yes
Yes
—
Yes
Yes
—
Yes
Yes
—
No
Connecticut
Yes
No
—
Yes
No
No
—
No
—
Yes
No
Delaware
No
Yes
Yes
—
No
Yes
Yes
Yes
Yes
Yes
No
Dist. of Columbia
Yes
Yes
—
—
Yes
No
Yes
—
—
Yes
No
Florida
Yes
Yes
Yes
—
No
Yes
Yes
Yes
Yes
—
Yes
Georgia
Yes
Yes
Yes
—
Yes
Yes
—
—
—
—
No
Hawaii
Yes
No
—
—
No
No
—
—
—
—
No
Idaho
Yes
Yes
Yes
—
No
No
Yes
Yes
Yes
Yes
Yes
Il inois
—
—
Yes
—
—
No
—
No
Yes
—
—
Indiana
Yes
Yes
Yes
—
No
Yes
Yes
No
Yes
Yes
Yes
Iowa
—
—
Yes
—
—
Yes
Yes
Yes
No
Yes
—
CRS-28

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Institutional Services
Home and Community-Based Services
Self-
Case
Health
Pers.
Priv. Duty
State Plan Directed
State
ICFs/IIDa
IMD 65+b
Mngmt.c
CFCd
Homese
PACEf
Careg
Nurs.h
Rehab.i
HCBSj
PASk
Yeark
2018
2018
2020
2020
2018
2020
2020
2020
2020
2020
2018
Kansas
Yes
Yes
Yes
—
Yes
Yes
Yes
No
Yes
—
Yes
Kentucky
Yes
Yes
No
—
Yes
No
—
Yes
No
—
No
Louisiana
Yes
Yes
Yes
—
No
Yes
Yes
No
Yes
—
No
Maine
Yes
Yes
Yes
—
Yes
No
Yes
Yes
Yes
—
No
Maryland
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
—
Yes
Massachusetts
Yes
Yes
Yes
—
No
Yes
Yes
Yes
Yes
—
No
Michigan
No
Yes
Yes
—
Yes
Yes
Yes
Yes
No
Yes
Yes
Minnesota
Yes
Yes
Yes
—
Yes
No
Yes
—
—
—
Yes
Mississippi
Yes
Yes
No
—
Yes
No
—
Yes
No
Yes
No
Missouri
Yes
Yes
Yes
—
No
No
Yes
Yes
No
—
No
Montana
Yes
Yes
No
Yes
No
No
Yes
Yes
Yes
—
Yes
Nebraska
Yes
Yes
Yes
—
No
Yes
Yes
Yes
Yes
—
Yes
Nevada
Yes
No
No
—
—
No
Yes
Yes
Yes
Yes
No
New Hampshire
—
—
—
—
—
Yes
Yes
—
—
—
—
New Jersey
Yes
Yes
Yes
—
Yes
Yes
Yes
Yes
Yes
—
Yes
New Mexico
Yes
Yes
No
—
Yes
Yes
Yes
—
—
—
No
New York
—
—
—
Yes
—
Yes
Yes
—
—
—
—
North Carolina
Yes
Yes
—
—
—
Yes
Yes
Yes
No
—
No
North Dakota
Yes
Yes
Yes
—
No
Yes
Yes
Yes
Yes
—
No
Ohio
Yes
No
No
—
Yes
Yes
—
Yes
No
Yes
Yes
Oklahoma
Yes
Yes
No
—
Yes
Yes
Yes
No
No
—
Yes
CRS-29

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Institutional Services
Home and Community-Based Services
Self-
Case
Health
Pers.
Priv. Duty
State Plan Directed
State
ICFs/IIDa
IMD 65+b
Mngmt.c
CFCd
Homese
PACEf
Careg
Nurs.h
Rehab.i
HCBSj
PASk
Yeark
2018
2018
2020
2020
2018
2020
2020
2020
2020
2020
2018
Oregon
Yes
Yes
No
Yes
No
Yes
Yes
No
No
—
Yes
Pennsylvania
Yes
Yes
Yes
—
No
Yes
Yes
Yes
Yes
—
No
Rhode Island
Yes
Yes
Yes
—
Yes
Yes
Yes
No
Yes
—
Yes
South Carolina
—
—
Yes
—
—
Yes
—
Yes
No
—
—
South Dakota
Yes
Yes
No
—
Yes
No
Yes
Yes
Yes
—
No
Tennessee
Yes
Yes
—
—
Yes
Yes
—
Yes
—
—
Yes
Texas
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
—
Yes
Yes
Utah
Yes
Yes
No
—
No
No
Yes
Yes
Yes
—
Yes
Vermont
Yes
Yes
Yes
—
Yes
No
Yes
Yes
No
—
Yes
Virginia
Yes
Yes
Yes
—
No
Yes
—
Yes
No
—
Yes
Washington
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
—
No
West Virginia
Yes
Yes
Yes
—
—
No
Yes
Yes
Yes
—
Yes
Wisconsin
Yes
Yes
Yes
—
Yes
Yes
Yes
Yes
Yes
—
No
Wyoming
Yes
Yes
No
—
No
Yes
—
No
Yes
—
No
Total # of States
44 Yes
42 Yes
30 Yes
9 Yes
23 Yes
33 Yes
37 Yes
31 Yes
24 Yes
13 Yes
21 Yes
and DC
2 No
4 No
14 No
42—
19 No
18 No
0 No
13 No
15 No
38—
24 No
5—
5—
7—
9—
0—
14—
7—
12—
6—
Source: CRS analysis of data for states and the District of Columbia (DC) from Kaiser Family Foundation: State Health Facts, and other published sources.
Notes: “Yes” = State reported covering this service; “No” = State reported not covering this service; “—” = State either did “not respond” or field was blank and no
data were reported.
CRS-30

Medicaid LTSS benefit coverage varies across states in the amount, duration, and scope of the benefit, as well as the package of included services within a specific benefit
(e.g., SSA §1915(i) State Plan HCBS and (j) Self-Directed PAS). Some of the state plan services in this table may vary by category of Medicaid enrol ee (e.g., alternative
benefit plan or managed care enrol ee) or active waivers. Data range consists of a calendar year (CY) or a federal fiscal year (FY), depending on the source.
a. ICFs/IID refers to Intermediate Care Facilities for Individuals with Intellectual Disabilities. Federal Medicaid law uses the term “intermediate care facilities for the
mentally retarded” and the abbreviation “ICFs/MR”; however, federal agencies use the term “intermediate care facilities for individuals with intellectual disabilities
(ICFs/IID).” Kaiser Family Foundation, “State Health Facts, Medicaid Benefits: Intermediate Care Facility Services for Individuals with Intellectual Disabilities, 2018,”
at http://kff.org/medicaid/state-indicator/intermediate-care-facility-services-for-the-mentally-retarded/.
b. IMD 65+ refers to Institutions for Mental Diseases for individuals aged 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, 2018,” at https://www.kff.org/medicaid/state-
indicator/services-in-institutions-for-mental-disease-age-65-and-older/.
c. Case management refers to the optional state plan benefit for case management. Mol y O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home
& Community-Based Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at https://www.kff.org/report-section/
medicaid-home-community-based-services-people-served-and-spending-during-covid-19-appendix/#table8.
d. CFC §1915(k) refers to the Community First Choice state plan option under SSA §1915(k). Centers for Medicare & Medicaid Services (CMS), “Medicaid State Plan
Amendments.” Mol y O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices About Medicaid Home and Community-Based Services Amid the
Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-
services-amid-the-pandemic-appendix/#table6.
e. Health Homes refers to health homes as established by Section 2703 of the Affordable Care Act. Kaiser Family Foundation, “State Health Facts, Medicaid Benefits:
ACA Health Homes, 2018,” at https://www.kff.org/other/state-indicator/medicaid-benefits-aca-health-home/.
f.
PACE refers to Program for All-inclusive Care of the Elderly. Mol y O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based
Services: People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at https://www.kff.org/report-section/medicaid-home-
community-based-services-people-served-and-spending-during-covid-19-appendix/#table10.
g. Pers. Care refers to personal care services. Mol y O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, State Policy Choices About Medicaid Home and
Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief, March 2022, at https://www.kff.org/report-section/state-policy-choices-about-
medicaid-home-and-community-based-services-amid-the-pandemic-appendix/#table6.
h. Priv. Duty Nurs. refers to Private Duty Nursing. Mol y O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based Services:
People Served and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at https://www.kff.org/report-section/medicaid-home-community-
based-services-people-served-and-spending-during-covid-19-appendix/#table7.
i.
Rehab. refers to rehabilitative services. Mol y O’Malley Watts, MaryBeth Musumeci, and Meghana Ammula, Medicaid Home & Community-Based Services: People Served
and Spending During COVID-19, Kaiser Family Foundation, Issue Brief, March 2022, at https://www.kff.org/report-section/medicaid-home-community-based-services-
people-served-and-spending-during-covid-19-appendix/#table9.
j.
State Plan HCBS §1915(i) refers to the Home and Community-Based Services state plan option under the SSA §1915(i) of the SSA. Mol y O’Malley Watts, MaryBeth
Musumeci, and Meghana Ammula, State Policy Choices About Medicaid Home and Community-Based Services Amid the Pandemic, Kaiser Family Foundation, Issue Brief,
March 2022, at https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-the-pandemic-appendix/#table6.
k. Self-Directed PAS §1915(j) refers to the Personal Assistance Services state plan option under SSA §1915(j). Kaiser Family Foundation, “State Health Facts, Medicaid
Benefits: Self-Direct Personal Assistance Services, 2018,” at https://www.kff.org/other/state-indicator/medicaid-benefits-personal-assistance-services/.
l.
Data for 2018 are as of July 1, 2018; data for 2020 are for FY2020.
CRS-31

link to page 37 link to page 37 Medicaid Coverage of Long-Term Services and Supports

Appendix B. Medicaid Long-Term Services and
Supports (LTSS) Expenditures
Data from the latest Medicaid LTSS annual expenditures report, sponsored by CMS, provides
detailed information about combined federal and state Medicaid LTSS expenditures for FY2019
by type (institutional versus HCBS) and service category.98 Expenditure data are from several
sources, including Medicaid CMS-64 expenditure reports for state plan and waiver services, state-
reported managed LTSS (MLTSS) expenditures, Money Follows the Person (MFP) Rebalancing
Demonstration Program worksheets for proposed budgets, and CMS 372 report data for SSA
Section 1915(c) HCBS waiver programs. Note that one limitation of the FY2019 Medicaid LTSS
expenditure data is the exclusion of four states due to missing data. These states (California,
Delaware, Illinois, and Virginia) were unable to submit MLTSS expenditure data for the FY2019
period and MLTSS spending accounts for a large share of overall Medicaid LTSS spending in
each of those states.
Figure B-1 shows the distribution of FY2019 Medicaid HCBS expenditures (both federal and
state) by service category. SSA Section 1915(c) HCBS waiver programs accounted for more than
half of HCBS expenditures in FY2019 (50.7%),99 followed by the personal care state plan option
(21.7%) and other HCBS provided under MLTSS financing and delivery models (8.6%). These
“HCBS MLTSS: Other” services include adult day care services, home-delivered meals, durable
medical equipment, and respite services, among others. Another 7.4% of spending was for the
SSA Section 1915(k) CFC state plan option and 5.0% was for home health. Other HCBS was
3.7% of spending and includes the following service categories: case management, Program for
All-Inclusive Care of the Elderly (PACE), private duty nursing, Health Homes, SSA Section
1915(i) HCBS state plan option, and SSA Section 1915(j) self-directed personal assistance
services, as well as expenditures for the Money Follows the Person Rebalancing Demonstration
Program.100 Finally, 2.9% of Medicaid HCBS spending was for rehabilitative services.
Figure B-1 also shows the distribution of Medicaid institutional expenditures (both federal and
state) for FY2019. The majority of institutional LTSS expenditures were spent on nursing facility
services (80.0%), followed by Intermediate Care Facilities for Individuals with Intellectual
Disabilities (ICFs/IID) (11.8%), mental health facilities (7.9%),101 and “other” institutional LTSS
expenditures that are reported by states in their MLTSS data (0.4%).102

98 Caitlin Murray et al., Medicaid Long Term Services and Supports Annual Expenditures Report: Federal Fiscal Year
019, Mathematica Policy Research, December 9, 2021, at https://www.medicaid.gov/medicaid/long-term-services-
supports/downloads/ltssexpenditures2019.pdf.
99 New Jersey and Rhode Island did not have any SSA Section 1915(c) waiver programs in FY2019; however, these
states reported fee-for-service HCBS expenditures that were provided through SSA Section 1115 waiver programs,
which were captured as SSA Section 1915(c) HCBS waiver program expenditures in this analysis.
100 Other HCBS also includes state-reported SSA Section 1115 demonstration expenditures for Vermont that do not fit
into one of the existing service categories; these included expenditures for adult day care services, community and
rehabilitative treatment (CRT), enhanced residential care (ERC), and other HCBS and residential services.
101 Mental health facility expenditures include inpatient psychiatric hospital services for individuals under age 21 and
Institution for Mental Diseases (IMD) services for individuals aged 65 or older, as well as mental health
disproportionate share hospital (DSH) payments.
102 Other institutional LTSS expenditures also include state-reported MLTSS from Arizona, Hawaii, Minnesota, and
South Carolina, and SSA Section 1115 waiver expenditures from Vermont that do not fit into one of the existing
service categories, such as expenditures for inpatient or residential substance use disorder treatment.
Congressional Research Service

32

Medicaid Coverage of Long-Term Services and Supports

Figure B-1. Total Medicaid Long-Term Services and Supports (LTSS) Expenditures,
by Type and Service Category, FY2019

Source: Adapted from Caitlin Murray et al., Medicaid Long Term Services and Supports Annual Expenditures Report:
Federal Fiscal Year 2019, Mathematica Policy Research, December 9, 2021, at https://www.medicaid.gov/medicaid/
long-term-services-supports/downloads/ltssexpenditures2019.pdf.
Notes: HCBS = home and community-based service; MLTSS = Medicaid managed Long-Terms Services and
Supports; ICFs/IID = Intermediate Care Facilities for Individuals with Intellectual Disabilities.
a. Medicaid LTSS expenditures for California, Delaware, Il inois, and Virginia were excluded because of missing
data.
b. “HCBS MLTSS: Other” includes expenditures for adult day care services, home-delivered meals, durable
medical equipment, and respite services, among others.
c. “HCBS Other” includes expenditures for the fol owing service categories: case management, Health Homes,
Money Fol ows the Person Rebalancing Demonstration Program, Program for All-Inclusive Care of the Elderly
(PACE), private duty nursing, SSA Section 1915(i) Optional HCBS State Plan, and SSA Section 1915(j).
d. “Mental Health Facilities” include expenditures for inpatient psychiatric hospital services for individuals under
age 21, Institution for Mental Diseases (IMD) services for individuals aged 65 or older, and mental health
disproportionate share hospital (DSH) payments.
e. “Institutional Other” includes expenditures for other institutional LTSS and MLTSS reported by states in their
data that do not fit into one of the existing service categories (such as SSA Section 1115 waiver service
expenditures and expenditures for inpatient or residential substance use disorder treatment).

Author Information

Kirsten J. Colello

Specialist in Health and Aging Policy

Congressional Research Service

33

Medicaid Coverage of Long-Term Services and Supports

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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
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Congressional Research Service
R43328 · VERSION 12 · UPDATED
34

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