The NCSL Blog


By Haley Nicholson

The American Rescue Plan (ARP) Act includes several flexibilities for state Medicaid programs, including  provisions allowing states to receive increased federal medical assistance percentage (FMAP) funding for different services.

The FMAP determines the federal government’s share of the cost of covered services in state Medicaid programs. Section 9817 of the ARP allows for a temporary FMAP increase of 10% for Home and Community Based Services (HCBS) for Medicaid beneficiaries. The HCBS allows recipients to receive health and social services in their homes and communities, outside of a facility, like a nursing home.

While the ARP passed in March and broadly outlined what kinds of services would qualify for an increased FMAP, official guidance on what is required of states was released in May. Now states have more details and clarity on what they need to do to apply.

States can apply for the temporary FMAP increase for certain Medicaid HCBS services from April 1, 2021, through March 31, 2022, with a deadline to spend the increased funding by March 31, 2024.

Funding must be used for qualifying activities listed under guidance and to improve HCBS under the Medicaid program. The guidance emphasizes that the increased funding must be used to supplement and not supplant one or more HCBS activities.

The services that are eligible are primarily based off those that are under ARP statue with the additional inclusion of private nursing services. If states do qualify, they can use the increased FMAP to supplement existing state funds that are equivalent to the FMAP increase and cannot impose stricter enrollment requirements for the HCBS than what was in place prior to April 1, 2021. Funds must be used for activities that enhance, expand or strengthen HCBS under the Medicaid program.

Additional funding can be used by states to customize for HCBS enhancements, including those that:

  • Reflect the needs and priorities of program residents.
  • Protect and support the HCBS workforce.
  • Ensure financial stability for HCBS providers.
  • Accelerate long-term services and supports to the level of innovation and enhancement states need.

If states do apply, they will need to provide the Centers for Medicare and Medicaid Services (CMS) with spending plans and narratives within 30 days of the guidance release, with the CMS committing to respond to state plans within 30 days of receiving plans. States are encouraged to include as many details as possible but can also make spending and plan estimates that will require more detail in future reporting.

States can supplement their programs in several ways ranging from initiating infrastructure enhancements to providing paid family leave for direct care workforce or providing assistive technology for program recipients. The funding can look toward short-term projects to address COVID-19 but to also beyond the pandemic. The CMS has provided guidance to state Medicaid directors, and is also happy to assist states as they put together plans for proposed and ongoing reporting. States can reach out to for further assistance.

NCSL Resources:

NCSL Overview- American Rescue Plan of 2021

Finding Long Term Solutions for Long Term Care

Shoring Up the Long-Term Care Workforce

Haley Nicholson is senior policy director-HHS in NCSL's State-Federal Affairs Program.

Email Haley

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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.