Expanding Home- and Community-Based Services


Congress and the states should expand funding for a wide range of home- and community-based services (HCBS) through Medicaid, the Older Americans Act, the Social Services Block Grant program, and other programs that offer long-term services and supports (LTSS) (see this chapter’s section The Older Americans Act, and Chapter 6, Low-Income Assistance for more information).

AARP supports initiatives to balance LTSS systems. “Balancing” or “rebalancing” means ensuring that people with LTSS needs have access to a variety of services that meet those needs and that their preferences for assistance are considered. This will require that states plan, develop, and fund an array of LTSS. Because most people prefer to receive services and supports in their homes or home-like settings, states will need to allocate more resources toward HCBS to balance Medicaid LTSS spending that now tends to favor nursing facilities. A balanced LTSS system will make efficient use of resources while meeting the needs and preferences of people who want to remain in their homes and communities.

In January 2014 Centers for Medicare & Medicaid Services (CMS) issued a final rule giving states new flexibility and responsibility for paying for HCBS through Medicaid. The rule provides a new definition of HCBS settings, emphasizing an outcomes-oriented approach so that older adults and people with disabilities have informed choices of settings and service options. The new rule emphasizes person-centered planning that reflects the care recipient’s goals and preferences, and acknowledges that family caregivers play a vital role in enabling the recipient to continue living at home or in the local community. The new rule also allows states to combine multiple Medicaid waivers that cover HCBS based on functional need rather than age or diagnosis, and serve more than one population in a waiver. States will have to submit transition plans to meet the new HCBS rule and then will have up to five years to implement the plan.

For the first time, CMS has formally recognized the importance of assessing the needs of family caregivers through the new requirements for person-centered care planning. However, the new rule relates only to assessing the needs of family caregivers under one of the Medicaid HCBS authorities, the 1915(i) HCBS state plan option that allows states to expand HCBS and target services to specific populations.

As part of the 2010 Affordable Care Act (ACA), Congress established two new financial initiatives to facilitate states’ expansion of their HCBS programs, provided additional funding for several existing programs, and made other improvements.

The State Balancing Incentive Payments Program, which ran for four years (from October 1, 2011, to September 30, 2015), provided grants to qualifying states that committed to making structural changes in their Medicaid programs to improve the balance of spending between HCBS and institutional services. A grant increased a state’s Federal Medical Assistance Percentage (FMAP) by either 2 or 5 percentage points, depending on the state’s current allocation of Medicaid spending for HCBS. Another initiative is the Community First Choice option. This increases a state’s FMAP by 6 percentage points if the state—without enrollment restrictions—offers statewide attendant services and supports to certain Medicaid-eligible individuals with disabilities.

The law also strengthened the Money Follows the Person (MFP) Rebalancing Demonstration program, which encouraged states to identify people in institutions who want to return to their communities. When a state transitioned such people, it received an enhanced FMAP for the Medicaid-funded HCBS that people receive for their relocation’s first year to help them live in the most appropriate and preferred settings. The ACA extended the MFP program through September 30, 2016, and appropriated an additional $450 million for each of the five fiscal years 2012–2016. Any unused grant funds as of 2016 can be used until 2020.

In addition, the law modifies the existing 1915(i) Medicaid state plans for HCBS to make it easier for states to use this authority to expand HCBS. It also requires all states to apply spousal impoverishment protection rules to HCBS for five years (2014–2019). States already are required to do this for the spouses of Medicaid beneficiaries who reside in nursing facilities.

To further balance LTSS-related spending, the federal government should vigorously enforce the Americans with Disabilities Act (ADA) and help states develop and implement plans to help nursing facility residents move out of their institutions. The government should also expand services to people with disabilities in community settings. Residents would move only if they could obtain adequate care and housing in the community and did not oppose moving there, as required by the ADA and the US Supreme Court’s 1999 Olmstead v. L.C. decision.

With federal funding and support, states should also establish nursing facility transition programs. Independent transition specialists would visit facilities to help residents learn about other types of LTSS and gain access to them.

States that have achieved greater success in transforming their LTSS systems to give people choices and reduce their reliance on nursing facilities share certain characteristics. They include:

  • Philosophy—all decisions extend from a commitment to deliver services to older adults and people with disabilities and their family caregivers in the most independent living situation possible and to expand cost-effective HCBS options through person- and family-centered planning. The most important factor in creating a balanced LTSS system may be the state’s determination to promote quality of life for older adults and people with disabilities, and give participants a choice in how they obtain their services.
  • Array of services—states that provide a comprehensive array of culturally appropriate services designed to meet the particular needs of each individual, regardless of income, and his or her family caregiver are less likely to channel people into institutions.
  • Organization of responsibilities—assigning responsibility for the state’s LTSS system to a single administrator is a key decision in some of the most successful states.
  • Coordinated funding sources—coordination of multiple funding sources can maximize a state’s ability to meet the needs of older adults and people with disabilities.
  • Single appropriation—this approach, sometimes called “global budgeting,” allows states to transfer funds among programs and, therefore, make more timely decisions to serve people in their preferred settings.
  • Timely eligibility—hospital discharges account for nearly half of all nursing facility admissions. When decisions must be made quickly at a time of crisis, state Medicaid programs must arrange for HCBS in a timely manner. Delays in eligibility decisions often result in unnecessary placement in nursing facilities. Successful states either presume financial eligibility for Medicaid HCBS or fast-track the determination process.
  • Standardized assessment tool—some states use a single tool to assess functional eligibility and service needs, and then develop a person- and family-centered plan of services and supports. This helps to minimize differences among care managers and prevent unnecessary institutionalization. It can also be used to collect consistent data, leading to better system management. In states where people are disproportionately institutionalized compared to other states, initiatives targeted to reducing institutionalization should be established.
  • Single entry point—research demonstrates the need for a single access point to a comprehensive array of LTSS for older adults and people with disabilities. Effective systems that determine eligibility, coordinate services, and monitor quality can support people who have their own resources to pay for services, as well as those who qualify for public programs. A robust system of information and assistance is critical because most older adults, people with disabilities, and their families have a difficult time negotiating complex systems. One model is the Aging and Disability Resource Centers, which most states are in various stages of implementing.
  • Participant direction—the movement to allow people a greater role in determining who will provide their services, as well as when and how they are delivered, responds to the desire of older adults and people with disabilities to maximize their choices and control over their lives.
  • Relocation from nursing facilities—some states regularly assess the possibility of transitioning people out of nursing facilities and into their own homes or home-like community alternatives. States may assign staff to visit nursing facilities to identify, assess, and help people relocate. Medicaid payment for transition services is critical to the success of these efforts.
  • Quality improvement—states are incorporating participant-defined measures of success in their quality improvement plans.
  • Integrating health services and LTSS—a few states have developed methods for ensuring that the array of health services and LTSS provided to older adults and people with disabilities are coordinated and delivered in a cost-effective manner. Differences in how Medicare and Medicaid programs are administered have complicated these efforts. Yet among people age 65 and older, the great majority of those receiving Medicaid are eligible for Medicare as well.

Expanding Home- and Community-Based Services: Policy


In this policy: Federal

The federal government should eliminate Medicaid’s bias favoring nursing facilities in the funding of long-term services and supports (LTSS) by mandating the provision of home- and community-based services (HCBS) for all people who meet Medicaid eligibility criteria and choose to receive services in HCBS settings.

The federal government should provide federal matching funds to reimburse states for erroneous presumptive eligibility determinations regarding beneficiaries who receive Medicaid HCBS and nursing facility services.

The federal government should give states more flexibility to set separate eligibility criteria for nursing facility care and waiver services. Only people who cannot be safely, adequately, appropriately, and cost-effectively served in the community, based on uniform and independent assessments, should be admitted to nursing facilities, unless they choose to receive services in a nursing facility.

Supplemental Security Income

In this policy: Federal

The federal government should permit states to implement nursing facility and waiver eligibility criteria that recognize the need for a comprehensive array of LTSS (see Chapter 6, Low-Income Assistance: Supplemental Security Income).

Expanding HCBS

In this policy: FederalState

Federal and state governments should carefully assess the impact of any proposed budget cuts on their efforts to balance their LTSS systems and their ability to serve people in the most integrated setting the individual chooses.

Federal and state governments also should:

  • apply the principle that consumer choice and quality of life should drive the entire LTSS system;
  • allocate a greater proportion of Medicaid funding for HCBS instead of nursing facility care;
  • provide potential consumers with viable options for HCBS that will help divert people from nursing facility care either before admission or shortly thereafter;
  • initiate and implement additional nursing facility diversion programs, and expand the availability of HCBS through LTSS programs funded by state general revenue—these programs should offer a comprehensive range of services to meet beneficiaries’ health and functional needs. At a minimum, services should include home care, conflict-free care management, personal care, respite care, and other caregiver support services, such as education and training. Eligibility for these HCBS must be determined quickly so that consumers have viable options other than a nursing facility. Services should be offered in a range of settings, including supportive housing and adult day centers. In initiating such programs, states must ensure that they do not inappropriately limit the access of people with chronic conditions and low incomes to nursing facilities or increase the cost of health care or LTSS;
  • create or expand nursing facility transition programs, such as the Money Follows the Person Rebalancing Demonstration program, to move people to more home-like settings if they choose to receive care in such settings;
  • restructure their nursing facility Medicaid reimbursement system to ensure that it does not sustain excess capacity. states should pursue appropriate efforts to address excess capacity by increasing imputed occupancy rates and considering incentives for taking excess capacity offline;
  • eliminate HCBS waiting lists—people in need of LTSS cannot wait for services and may end up in nursing facilities;
  • create or enhance the existing system for quality oversight and enforcement of quality-of-care standards in all settings;
  • offer Medicaid optional services, including conflict-free care management, personal care, and adult day services;
  • expand HCBS through waivers and other processes such as state plan amendments, Administration for Community Living programs, or state-only funding sources—particularly important are programs that provide LTSS for low-income residents of assisted living, or board and care homes, at risk of entering a nursing facility. However, current Medicaid beneficiaries should not be forced to move or have benefits reduced by the implementation of a waiver or other program;
  • expand the new requirement to assess the needs of family caregivers under the 1915(i) HCBS state plan option to all assessment tools for Medicaid HCBS. Such assessments will identify at-risk family caregivers before they burn out or compromise their own physical and mental health.
  • expand HCBS options to include a range of residential choices as well as home modifications and assistive technologies;
  • support family caregiver services such as education and training, counseling, legal consultations, and respite care, which can delay or decrease the likelihood of needing to enter a nursing facility;
  • create the capacity for prompt financial and functional Medicaid eligibility determinations for applicants who need and want HCBS, and for using presumptive eligibility for people seeking them;
  • consolidate LTSS programs, policies, and budgets within one state agency to promote efficiency, true single points of entry for LTSS, and the data collection necessary to strategically manage LTSS;
  • move to a unified global budget for publicly funded LTSS so states can manage expenditures and use the money saved through reduced nursing facility use for HCBS;
  • ensure that Olmstead plans include specific action steps, timelines, and strategies for securing necessary HCBS funding;
  • ensure that consumers fully participate in implementing and monitoring state Olmstead plans and waivers at the state and local levels—such participation would include serving on advisory committees and governing boards;
  • continue to monitor and revise as needed their Olmsteadimplementation plans;
  • establish policies to pay relatives and friends who care for people with LTSS needs as part of a plan of care, and design programs and policies to protect consumers and avoid the erosion of family care networks—programs and policies should protect consumers, guard against fraud and abuse, and avoid disincentives for unpaid caregiving;
  • identify barriers that unintentionally curtail consumers’ ability to self-direct their care or to arrange to have certain nursing tasks provided by unlicensed direct-care staff authorized and trained to do so by a registered nurse—states must ensure that registered nurses are protected from liability if they have followed the prescribed protocols for delegation, training, and supervision outlined in the states’ nurse practice acts;
  • ensure that states with a formal process for allocating the number of nursing facility beds—such as a certificate of need—base decisions on the number of people who require a specific level of care and on data projecting the need for LTSS in different areas of the state;
  • provide data on nursing facilities and HCBS service use, by age and geographic region. states should also provide per capita and aggregate cost of services, including Medicaid services in nursing facilities and HCBS to the extent possible;
  • seek to provide data on the range of the level-of-care scores of people age 85 and older who are in nursing facilities;
  • preserve and expand funding for respite care services in a range of settings, such as personal care services in the home or adult day services, to ensure that more family caregivers can have a break from their caregiving duties;
  • preserve and expand funding for respite care services regardless of whether the care recipient is eligible for Medicaid or a publicly funded program, or is a private-pay individual; and
  • allow family caregivers who are assisting care recipients of moderate incomes, and who would not otherwise qualify for publicly funded respite services, to buy into or otherwise access these services.