Assessing Enhanced Federal Funding for HCBS Under the American Rescue Plan

Stephanie Anthony and Alixandra Gould, Manatt Health

On March 11, 2021, President Biden signed the American Rescue Plan (ARP) 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 Section 9817, which provides enhanced federal funding for state Medicaid spending on home- and community-based services (HCBS). Beginning April 1, 2021 and through March 31, 2022, states are 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. On May 13, the Centers for Medicare and Medicaid Services (CMS) released guidance on implementing Section 9817 of ARP. The guidance also addresses many of the outstanding questions not addressed by the legislation. This updated brief describes ARP’s HCBS enhanced FMAP provision, CMS’s recent implementation guidance, and considerations and next steps for state policymakers.

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