Long-Term Services Health Reform Provisions:
The State Balancing Incentives Payment Program
What it is
A temporary program that provides qualifying states with either a 2 or a 5 percentage point increase in their federal match for Medicaid Home- and Community-Based Services (HCBS) costs. Participating states must make certain program changes designed to increase use of HCBS in Medicaid. This program runs from October 1, 2011 through September 30, 2015. The Department of Health and Human Services (HHS) has a maximum of $3 billion available for this program.
This applies to a state’s existing HCBS Medicaid program and makes no changes in eligibility or benefits provided through Medicaid.
States eligible for added payments
States where less than 50 percent of Medicaid long-term services spending for fiscal year 2009 was on non-institutional care are eligible for Balancing Incentive payments.
Medicaid services that are considered to be non-institutional services for purposes of the program include: home health care; HCBS waivers provided under 1915(c), (d), or (i) or under an 1115 demonstration project; personal care services; certain PACE program services; and 1915(j) self-directed personal assistance services.
State requirements
Application and target percentages: States must submit an application with a budget and plan for increasing Medicaid HCBS spending to a target percentage by September 30, 2015. The target percentages are:
- 25 percent, if Medicaid HCBS spending was less than 25 percent in 2009, or
- 50 percent for other balancing incentive states.
Administrative changes: Within six months of applying, the state must institute administrative changes designed to increase HCBS use in Medicaid, including:
- “No-wrong door single entry point system” that will enable consumers to gain access to all long-term services through a single point where they will receive information on services available and referral services and will receive an assessment to determine financial and functional eligibility for various programs.
- "Conflict-free" case management to develop individual service plans and to arrange for and conduct ongoing monitoring of services (i.e., no conflict of interest regarding the case manager and the service providers).
- Core standardized assessment instrument to be used statewide to determine eligibility and appropriate services.
Reporting: States must report services and quality data and report on outcomes measures for non-institutional Medicaid long-term services.
Maintenance of Effort: Maintain 2009 eligibility levels for all non-institutional Medicaid services for which the states will get an added federal payment percentage (see below).
Added Federal Payment (FMAP) Increase
Balancing incentive payments will be based on state expenditures for the non-institutional services (see “States eligible for added payments,” above, for included services). All payments must be used to expand Medicaid non-institutional long-term services.
- States that use less than 25 percent of Medicaid long-term services spending on non-institutional care in 2009 will be eligible for a 5 percentage point FMAP increase, applied to state non-institutional care spending in Medicaid.
- States with spending of at least 25 percent but less than 50 percent are eligible for a 2 percentage point FMAP increase.
Why this is important
The administrative changes required by this program have been used in some states. They are associated with an increase in the use of non-institutional services in Medicaid and, over time, they reduce the growth in Medicaid long-term care spending. However, making those administrative changes can cost money. The added FMAP payment will help states make these changes and strengthen home- and community-based-services in their state.
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