Last summer, Health Policy News provided coverage of early planning at the state level to implement Section 9817 of the American Rescue Plan Act of 2021 (ARPA) related to Home and Community Based Services (HCBS). Section 9817 and subsequent guidance[1] from the Centers for Medicare and Medicaid Services (CMS) set forth the reporting and spending plan requirements, including guidance on the submission of initial and quarterly HCBS spending plans outlining how the state will supplement its existing spending and programming. Last month, CMS updated reporting guidance to states for spending plans, as well as extended the timeline for use of funds. This piece highlights the new guidance and includes a short update on state progress in HCBS investments.
Additionally, PCG subject matter experts have been working directly with states on the funds allocated via the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) under ARPA. From this experience, we compiled lessons learned and best practices for states and localities for grant and non-grant funding planning purposes.
CMS Extends Timeline for Home and Community Based Services Enhanced FMAP Funding
In June 2022, CMS announced that they were allowing states more time to expend increased Federal Medicaid Assistance Percentage (FMAP) funding to expand, enhance, and strengthen HCBS programs. These increased FMAPs were initially to be in place from April 1, 2021, through March 31, 2022, with states having to expend the FMAP funding by March 31, 2024. States will now have through March 31, 2025, to use ARPA funding. Additionally, the June 2022 guidance “Updated Reporting Requirements and Extension of Deadline to Fully Expend State Funds Under American Rescue Plan Act of 2021 Section 9817” reduced the administrative burden of HCBS spending narratives by changing the reporting cadence from quarterly to semi-annually, while still allowing states to submit a quarterly narrative to add or change previously approved scope or activities.
States spent much of 2021 working though development of spending plans tied to the enhanced federal funding for HCBS and certain behavioral health services. This funding provides a one-year, 10 percent increase to the share of state HCBS Medicaid spending that is paid for by the federal government.[2] At this time, all states’ and the District of Columbia’s spending plans for HCBS-enhanced FMAP have been approved by CMS, and implementation is underway.
Health Policy News (HPN) covered some specific state approaches this past fall, as well as including a deep dive in our annual white paper, but we wanted to provide some updates on approaches at the state level.
Some interesting advancements in this area include the following state highlights:
- Progressive approaches to worker retention, including student loan forgiveness, retention bonuses, and pay increases to direct support professionals
- For example, In Round 1 of the spending plan funding Massachusetts[3] made an immediate $100M dollar investment in rate add-ons for HCBS workers which were paid out from July through December of 2021. In Round 2, the State plans to allocate funds to workforce investments that “provide loan repayment incentives for workers with special focus on workers with diverse cultural, racial, ethnic, and linguistic backgrounds and competence.”
- Housing Accessibility and Affordability Initiatives
- At the federal level, Housing and Urban Development issued 70,000 new Emergency Housing Vouchers, funded with ARPA funds, to people experiencing homelessness or risk of homelessness. State support of Medicaid HCBS would ensure continued assistance for at-risk individuals, and many states are working on allocating funds from ARPA towards this end.
- In Connecticut, ARPA HCBS funds are being used concurrent to the Governor-led Strategic Rebalancing Effort to realign and expand housing, access to community-based services, and modernization of service. Using town-level supply and demand projects, the state seeks to model HCBS services between 2020 and 2040, hopefully allowing for greater access and accessibility for eligible individuals.
HPN will continue to monitor the unique approaches underway at the state level to improve HCBS programming via ARPA funds.
States & Counties Implement Wide Range of Programs with Fiscal Recovery Funds
ARPA allocated 350 billion in emergency funding to be used for coronavirus recovery activities. In January 2022, the Secretary of the Treasury adopted the final rule stating that SLFRF funds may be used:
- to respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
- to respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers;
- for the provision of government services to the extent of the reduction in revenue due to the COVID-19 public health emergency, relative to revenues collected in the most recent full fiscal year prior to the emergency; and
- to make necessary investments in water, sewer, or broadband infrastructure.
As the Treasury indicated, SLFRF funds may only be used for costs incurred within a specific time period beginning March 3, 2021, with all funds obligated by December 31, 2024, and all funds spent by December 31, 2026.
In recognition of the disproportionate impacts of the COVID-19 virus on health and economic outcomes in low-income and Native American communities, Treasury identified a broader range of services and programs that are considered in response to the public health emergency when provided in these communities. The SLFRF funding will make long-standing investments in all aspects of local, municipal and state priority areas.
PCG has been assisting states with the administration of grant funds, as well as ensuring clear and compliant grant guidelines and reporting standards in compliance with federal expenditure guidance. To read a short overview of PCG’s experience with, and how we can support, states in the area of ARPA grant management and planning, click here.
For more information about PCG’s ARPA grant management and planning services, please contact healthpolicynews@pcgus.com.
Footnotes
[1] https://www.medicaid.gov/federal-policy-guidance/downloads/smd21003.pdf
[2] https://www.medicaid.gov/federal-policy-guidance/downloads/smd21003.pdf
[3] https://www.mass.gov/doc/massachusetts-arpa-hcbs-initial-spending-plan-june-2021-0/download