HHS, CMS Extend American Rescue Plan Funding For HCBS Another Year

The US Department of Health and Human Services (HHS) and CMS announced that states will have another year to invest American Rescue Plan funds in home- and community-based services (HCBS).

“The Biden-Harris Administration is committed to expanding access to home- and community-based care for people with disabilities and older adults. Thanks to the American Rescue Plan, these additional funds will help people with Medicaid to live and thrive in the setting of their choice,” CMS Administrator Chiquita Brooks-LaSure said in the press release. 

“With this extension, we are addressing states’ concerns, giving states the time and resources to strengthen connections to care at home and in communities.”

States will be able to use American Rescue Plan funds for HCBS initiatives through March 31, 2025. 

“Everyone deserves the dignity to live in their own homes and communities, and the Biden-Harris Administration is committed to protecting that right,” HHS Secretary Xavier Becerra stated in the press release. 

“Thanks to extended funding from President Biden’s American Rescue Plan, we are expanding home- and community-based services for millions of aging Americans and people with disabilities across the country. We are working hand-in-hand with states to ensure they have the time and support they need to strengthen their home care systems and workforce.”

HCBS have been crucial for Medicaid beneficiaries living in communal settings as they face a higher risk of coronavirus spread. The American Rescue Plan incentivized states to bolster these services by offering a temporary 10 percentage point increase to the federal medical assistance percentage (FMAP) for HCBS-related Medicaid spending.

Prior to this announcement, states had three years to leverage these funds, from April 1, 2021 through March 31, 2024.

The press release also cited the strain on the healthcare workforce as a key motivator behind this decision. Additionally, the funds may help individuals who are on the HCBS waitlists gain access to care, allow states to refine activities for beneficiaries who require HCBS, and reimburse direct service workers.

Medicaid spending on HCBS rose by $116 billion in 2020, before the American Rescue Plan Act’s additional funding became available. Experts predicted that Medicaid spending on HCBS would shift once states received the American Rescue Plan Act’s funding, with varying effects based on the state.

HCBS have been an important part of the social determinants of health strategy at CMS.