Assessing Enhanced Federal Funding for HCBS Under the American Rescue Plan Act

Prepared for the Robert Wood Johnson Foundation’s State Health and Value Strategies program

On March 11, 2021, President Biden signed the American Rescue Plan Act (ARPA) into law, enacting a sweeping $1.9 trillion COVID-19 relief package. The legislation includes a number of provisions that will significantly impact state and federal health care policies and programs, including enhanced federal funding for state Medicaid spending on home- and community-based services (HCBS). Beginning April 1, 2021, and through March 31, 2022, states will be eligible to receive a 10 percentage point increase in their federal medical assistance percentage (FMAP)—the share of state Medicaid spending that is paid for by the federal government—for specified HCBS.

In “Assessing Enhanced Federal Funding for HCBS Under the American Rescue Plan Act,” a new brief prepared on behalf of the Robert Wood Johnson Foundation’s State Health and Value Strategies program, Manatt Health describes ARPA’s HCBS FMAP increase provision, the requirements for states receiving the enhanced federal funding, and considerations and next steps for state policymakers. The report covers key areas, including:

  • Enhanced HCBS funding in ARPA
  • How states may use the enhanced HCBS funding
  • Immediate activities that may be undertaken by states
  • Investments to expand capacity in the HCBS system for the long term
  • Outstanding questions for states to be addressed by the Centers for Medicare and Medicaid Services (CMS) in guidance

To access the full issue brief, click here.

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