American Rescue Plan Continued

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It was recently announced that The American Rescue Plan would provide billions of dollars for HCBS programs. Below are more details about the package. Check out the first blog to learn more.

  • Increases the total dollars available for Medicaid HCBS, as states are required to maintain their current HCBS spending to qualify for the enhanced federal funds. Specifically, states have to maintain their level of HCBS spending as of April 1, 2021. The proposed 10 percentage point increase for HCBS is added to the state’s regular Medicaid matching rate (which ranges from 50% to 78% in FY 2022), as well as to other FMAP increases available to states, including the 6% percentage point increase for Community First Choice attendant care services, the 6.2% increase provided to address the COVID-19 public health emergency (PHE) under the Families First Coronavirus Response Act, any disaster recovery FMAP (available to states with a federally declared disaster and a certain amount of FMAP decline), and the 90% federal matching rate for Medicaid expansion adults under the ACA, as well as a proposed 5% in the regular matching rate for states newly adopting the ACA expansion provided in a separate section of the bill. The cumulative enhanced matching rate for Medicaid HCBS under the bill is capped at 95%.

  • Estimated total Medicaid HCBS spending varies widely by state, ranging from $198 million dollars in Wyoming to nearly $22 billion in California. The additional $11.4 billion federal dollars from this FMAP increase is distributed proportional to the size of state HCBS programs, with California receiving nearly $2.2 billion additional federal dollars, Missouri $226 million and Wyoming receiving about $19.8 million additional federal dollars.

  • States have a new option to provide community-based mobile crisis intervention services with 85% federal matching funds for the first 3 years. The additional funds must supplement, not supplant, the level of state spending for these services in the fiscal year before the first quarter that a state elects this option. Services must be otherwise covered by Medicaid and provided by a multidisciplinary team to enrollees experiencing a mental health or substance use disorder crisis outside of a hospital or other facility setting. These services generally do not have to be offered statewide, do not have to be comparable for all enrollees, and can restrict enrollees’ free choice of provider. The new option is available to states for 5 years, beginning April 1, 2022. The law also authorizes $15 million for state planning grants, to be awarded by the HHS Secretary as soon as practicable.

  • Autistic individuals and their families have benefited from the economic impact payments provided by previous COVID-19 relief bills. However, those bills excluded dependents over the age of 16 from eligibility. The American Rescue Plan incorporates legislation to ensure that dependents over the age of 16 will qualify for $1,400 stimulus checks.

  • The American Rescue Plan includes $3 billion in dedicated funding for Individuals with Disabilities Education Act (IDEA) programs.

  • States may not use these funds to directly or indirectly reduce net tax revenue. This restriction will remain in place from March 3, 2021 until a state spends all remaining funds. If states violate this restriction, they must repay an equivalent amount of the federal aid.

Use this chart to see how much funding your state will receive.

Minimizing Temp Agency Service Costs

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Despite concerns about background checks, training, supervision, certifications and licenses, which can be troublesome to manage through a 2nd party, many providers use temporary staff from an agency when necessary.

This is not ideal. I remember working with a provider who seemed to have very low overtime costs considering the provider managed a group home program. I could not understand how they managed to keep overtime so low. Eventually I asked them what they did when they got a call off. Their answer? “We call our temping service”.

Instead of looking at payroll costs, I asked to see their Accounts Payable records. The annual expenditure on the temporary service was over $250,000 a year at a 33% higher rate than if the provider used their own staff! Meanwhile, employees were leaving because they couldn’t earn enough money!

Before using temping services, providers should look at their internal communication and scheduling systems. Often the problem is not that “no one wants the hours” but, “no one knows about the hours”.

Using existing staff can increase retention (higher gross pay) and reduce costs.

Scheduling

  • Make sure your scheduling software notifies all employees about open shifts. Let the employees request the shifts if they want them.
  • Keep open schedules up-to-date so staff can see accurate open shifts.
  • Use an availability search when a call off happens and notify available staff before contacting a temping service.
  • Consider centralized scheduling for day-to-day schedule planning and just have managers look after call offs.

Recruitment, Hiring, Training and Retention

  • Make sure you embrace high velocity hiring.
  • Create job descriptions that emphasize your competitive advantages.

Internal Communications

  • Ensure your agency has an integrated communications system that allows HR, administration and managers to easily and quickly communicate with staff.

Download our ebook, The Complete Guide to Scheduling for Providers, to learn more about your options!

American Rescue Plan Funds HCBS

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Good news has arrived for agencies! The American Rescue Plan includes a 10% (over $12 BILLION) dollar FMAP bump for HCBS!

The provision dedicates HCBS funding of $12.67 Billion, with a FMAP increase of 10% from April 1, 2021 to March 31, 2022. This is an increase from the House passed version with a 7.35% FMAP for HCBS.

The amount of Federal payments to a State depends on two factors. The first is the actual amount spent that qualifies as match-able under Medicaid and the FMAP. The Federal Medical Assistance Percentage (FMAP) is computed from a formula that takes into account the average per capita income for each State relative to the national average. By law, the FMAP cannot be less than 50%.

The FMAP formula is designed so that the federal government pays a larger portion of Medicaid costs in states with lower per capita incomes relative to the national average (and vice versa for states with higher per capita incomes). FMAP rates have a statutory minimum of 50% and a statutory maximum of 83%. For FY2021, regular FMAP rates range from 50.00% (13 states) to 77.76% (Mississippi). Relatively more FMAP money goes to states with a lower average per capita income.

This extra funding is good news for all providers to help offset higher overtime costs in 2020/21, pay for the transition to new mandates like EVV, and retool systems for the future. 

In addition, the American Rescue Plan includes:

  • Expansion of the Paycheck Protection Program (PPP). Makes larger nonprofit organizations eligible for PPP loans by considering the number of employees at a particular site, rather than the total number of employees. For example, a nonprofit provider with 1,000 employees would previously have been considered ineligible; if those employees are spread across different states, they should be eligible to apply.
  • $350 billion in funding for state and local governments.
  • A 10 percent increase in the federal Medicaid match percentage (FMAP).

Ensure your state fully leverages the plan’s 10% increase in the federal Medicaid match rate for the HCBS program.

For more information on how your agency can plan for the future, download the following publications:

Electronic Health Records (EHR) and Workforce Management All-in-One

Should Providers Offer Incentive Pay?

The Complete Guide to Scheduling for Providers