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Medicaid Home and Community-Based Services Programs: 2011 Data Update

As states continue to implement various aspects of the Affordable Care Act (ACA), developing and expanding home and community-based alternatives to institutional care remains a priority for many state Medicaid programs. While the majority of Medicaid long-term services and supports (LTSS) dollars still go toward institutional care, the national percentage of Medicaid spending on home and community-based services (HCBS) has more than doubled from 20 percent in 1995 to 45 percent in 2012. State Medicaid programs are operating in an environment of slow economic recovery and as of 2014, are facing the competing priorities of implementing the ACA’s new streamlined eligibility and enrollment processes and determining whether to adopt the ACA’s Medicaid expansion. States also are choosing among the ACA’s new and expanded LTSS options, some of which offer enhanced federal matching funds, to expand beneficiary access to Medicaid HCBS.

This report summarizes the key national trends to emerge from the latest (2011) participant and expenditure data for the three main Medicaid HCBS programs: (1) the mandatory home health services state plan benefit, (2) the optional personal care services state plan benefit, and (3) optional § 1915(c) HCBS waivers. It also briefly discusses the provision of Medicaid HCBS through § 1115 demonstration waivers and highlights findings from a 2013 survey of Medicaid HCBS participant eligibility, enrollment, and provider reimbursement policies.  It does not include enrollment and spending for the Money Follows the Person, § 1915(i) HCBS state plan option, Balancing Incentive Program, or Community First Choice state plan option.

Key Findings: Trends in Medicaid HCBS Participants and Expenditures, 2001-2011

  • In 2011, more than 3.2 million people accessed LTSS through one of the three main Medicaid HCBS programs, representing a two percent increase in enrollment from the previous year, less than the 10-year average of four percent (Figure 1). Of this population, 813,955 people received home health state plan services (in 50 states and DC), 960,752 received personal care state plan services (32 states), and more than 1.45 million were served through § 1915(c) waivers (47 states and DC). From 2010 to 2011, participation in personal care state plan services programs rose by one percent while the total number of individuals receiving home health state plan services remained relatively constant. The number of § 1915(c) waiver participants increased by three percent, the same rate of increase from 2009 to 2010. The number of individual § 1915(c) waivers increased slightly to 291 nationwide in 2011.
Figure 1: Growth in Medicaid HCBS Participants, by Program, 2001-2011

Figure 1: Growth in Medicaid HCBS Participants, by Program, 2001-2011

  • In 2011, Medicaid HCBS expenditures for home health state plan services, personal care state plan services, and § 1915(c) waivers totaled $55.4 billion, a five percent increase over 2010 total expenditures and lower than the 10-year average of ten percent (Figure 2). In 2011, spending growth in HCBS programs was led by § 1915(c) waivers (6%) followed by home health state plan services (4%) and personal care state plan services (3%).
Figure 2: Growth in Medicaid HCBS Expenditures, by Program, 2001-2011

Figure 2: Growth in Medicaid HCBS Expenditures, by Program, 2001-2011

  • Per enrollee annual spending on Medicaid HCBS averaged $17,174 in 2011, but there was considerable variation among states and programs. Across the states, Medicaid HCBS expenditures per person served ranged from $7,702 in Mississippi to $40,049 in Tennessee. Per enrollee spending also varied across the three main HCBS programs, ranging from a national average of $7,323 for home health state plan services participants to $26,817 for § 1915(c) waiver participants. These program-to-program differences were due to the types and extent of services offered in the different home and community-based programs. Per enrollee spending also varied among § 1915(c) waivers targeted to different beneficiary populations. For example, per enrollee spending in § 1915(c) waivers targeted to beneficiaries with intellectual/developmental disabilities (I/DD) was considerably higher than for other beneficiary groups, reflecting the I/DD population’s relatively more intensive need for LTSS.
  • A minority of states use § 1115 demonstration waivers to deliver HCBS. As of 2011, three states (Arizona, Rhode Island, and Vermont) do not operate any § 1915(c) waivers and instead use
    § 1115 waivers to administer statewide Medicaid managed care programs that include all covered HCBS for all populations and services. Another six states (Delaware, Hawaii, Minnesota, New York, Tennessee, and Texas) use § 1115 waivers for Medicaid managed care programs that include HCBS for at least some geographic areas and/or populations; these states also offer HCBS via § 1915(c) waivers for other geographic areas and/or populations.

2013 Policies in Medicaid HCBS Programs

  • In 2013, all states reported using cost controls in § 1915(c) waivers, such as restrictive financial and functional eligibility standards, enrollment limits, or waiting lists. About 24 percent of § 1915(c) waiver programs used financial eligibility standards that were more restrictive than those used to determine eligibility for Medicaid coverage of institutional care. However, 10 § 1915(c) waivers used more restrictive functional eligibility criteria than those used for institutional care. Almost two-third of states offering personal care state plan services (62% or 21 states) have some form of cost controls in place, with the majority utilizing service unit limitations. Over half of states (59%, or 30 states) had some form of expenditure or service restriction in place in their home health state plan services programs.
  • In 2013, more than 536,000 people were on § 1915(c) waiver waiting lists, and the average waiting time exceeded two years. The growth in the number of people on waiting lists continued to increase, although by a smaller amount than average (2% in 2013 compared to 12% average growth over the preceding decade). The average national waiting time for waiver services was 29 months, with wide variations among waivers for different target populations and across states. The average length of time a person spent on a waiting list ranged from four months for mental health waivers to 50 months for I/DD waivers.
  • The use of beneficiary self-direction as an alternative service delivery model was present in each of the three major Medicaid HCBS programs. The self-direction model includes initiatives such as beneficiary choice in the allocation of Medicaid service budgets and/or the selection and dismissal of service providers. Forty-three (or 90%) states with § 1915(c) waivers permitted or required self-direction in at least one of their waivers in 2013. Of the states offering personal care state plan services, 21 (or 62%) permitted self-direction. In contrast, only nine (or 18%) states allowed self-direction of home health state plan services in 2013.
  • Home health agency provider reimbursement rates declined slightly while those for personal care agencies remained the same from 2012 to 2013. The national average reimbursement rate per visit for home health agencies was $91.45 and $93.16 in 2013 and 2012, respectively. The hourly reimbursement rate for agencies providing personal care state plan services remained the same ($18.19 in 2012 and $18.20 in 2013).

Over the past two decades, the increase in access to community-based alternatives to institutional care has resulted in some rebalancing of Medicaid LTSS dollars. Section 1915(c) waivers account for two-thirds of spending on LTSS provided in community settings. In the coming years, it will be important to monitor states’ adoption of state plan options and other initiatives to expand Medicaid HCBS, differences in services and spending across states, and the impact of cost control policies on access and quality.