GAO Report Details How State Medicaid Programs Cover Home and Community-based Care

As the U.S. population ages, the number of people needing long-term support services (LTSS) to help with routine daily activities has been growing and is expected to continue to increase. All state Medicaid programs finance coverage of LTSS. A new report by the U.S. Government Accountability Office looks at how five states’ Medicaid programs are choosing to fund services to help beneficiaries with physical, cognitive, or other limitations to perform activities such as eating, dressing, and making meals in their homes or other community settings.

Medicaid is the nation's primary payer of LTSS, and state Medicaid programs spent an estimated $167 billion on LTSS in 2016. The state programs are required to cover nursing home care, but can choose to cover home and community based care. They’re increasingly opting to do so, according to the report, MEDICAID HOME- AND COMMUNITY-BASED SERVICES: Selected States' Program Structures and Challenges Providing Services.

“Medicaid spending on LTSS is significant, representing about 30 percent of total Medicaid program spending in fiscal year 2016,” says Janet Heinrich, DrPH, RN, FAAN, a research professor at the George Washington University Milken Institute School of Public Health.  Prior to joining the faculty at GWU, Heinrich served as senior advisor at the Center for Medicare and Medicaid Innovation (CMMI) of the Centers for Medicare & Medicaid Services (CMS).

The amount of LTSS spending used for home and community based services (HCBS) as a percentage of overall LTSS spending surpassed the percentage spent on institutional care (nursing homes) in fiscal year 2013 and has continued to grow, climbing to 53 percent in fiscal year 2014, 54 percent in 2015, and 57 percent in 2016, Heinrich says.  “This is a major change that will likely benefit our U.S. aging population, as well as those populations with disabilities that require complex care. States have considerable flexibility in the populations targeted, beneficiary eligibility and strategies for implementing HCBS.”

The GAO report reviewed 26 HCBS programs in five states: Arizona, Florida, Mississippi, Montana and Oregon. Four of the five states had multiple HCBS programs that targeted specific populations. For example, Mississippi had separate HCBS programs for aged or physically disabled individuals and individuals with intellectual or developmental disabilities. The fifth state, Arizona, had one program that targeted two specific populations.

The report also provides information about eligibility, enrollment, the role of managed care, the HCBS workforce and funding for HCBS programs in the five states.

“It will be important to monitor the quality of the state initiatives as well as the challenges in implementing these diverse programs going forward,” Heinrich says.