American Rescue Plan Funds HCBS

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