Providing Long-Term Services through Medicaid:
The Basics

There are several administrative mechanisms through which states can provide long-term services in Medicaid.

State Medicaid Plans.
All states have a state Medicaid plan. The plan has been approved by the Department of Health and Human Services (HHS). States must submit any changes to the plan to the Center for Medicare and Medicaid Services (CMS), the agency within HHS that administers the federal aspects of the Medicaid program. State plans must meet a list of federal requirements related to administration and benefits, and must include information on all mandatory services. Generally, services offered through the state plan must be available to everyone in the state who meets the eligibility criteria for the service and cannot target certain groups (e.g., services cannot be limited to people with specific conditions, such as head trauma survivors, or people residing in a specific geographic area). If a state wants to change coverage criteria, benefits, or provider reimbursement, it must submit the changes to CMS as a state plan amendment.

Waivers.
There are sections of the Medicaid statute that allow states to request the Department of Health and Human Services to waive select Medicaid requirements. Under these “waivers,” states can receive Medicaid matching funds for certain services even though the state is not offering those services in compliance with the Medicaid requirements. Waivers are a very important avenue through which states offer long-term services, particularly home-and community- based services. HHS is not required to approve waiver requests. Waivers cannot increase Medicaid costs above what they would have been without the waiver, i.e. it must be budget neutral. If they do, the state is responsible for the overrun. Waivers are approved for limited time periods and can be renewed.

Grants and Demonstration Programs.
The Centers for Medicare and Medicaid Services also has special grants and demonstration programs. These programs, established by Congress, generally have limited funding to pay for new modes of service delivery or to encourage states to undertake certain types of care. States must apply to receive grant funding and approval for demonstration projects. These programs usually are available for a set period of time, and are often renewed by Congress if the program is successful. Money Follows the Person is an important long-term care demonstration program that is currently in operation.