DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
SMD# 21-003 
RE: Implementation of American Rescue 
Plan Act of 2021 Section 9817: Additional 
Support for Medicaid Home and 
Community-Based Services during the 
COVID-19 Emergency 
May 13, 2021 
Dear State Medicaid Director: 
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARP) (Pub. 
L.117-2).  Section 9817 of the ARP provides qualifying states with a temporary 10 percentage
point increase to the federal medical assistance percentage (FMAP) for certain Medicaid
expenditures for home and community-based services (HCBS).  States must use the federal funds
attributable to the increased FMAP to supplement, not supplant, existing state funds expended
for Medicaid HCBS in effect as of April 1, 2021, and states must use state funds equivalent to
the amount of federal funds attributable to the increased FMAP to implement or supplement the
implementation of one or more activities to enhance, expand, or strengthen HCBS under the
Medicaid program.
The purpose of this letter is to provide guidance to states on the implementation of section 9817 
of the ARP, as well as to describe opportunities for states to strengthen the HCBS system in 
response to the COVID-19 Public Health Emergency (PHE), increase access to HCBS for 
Medicaid beneficiaries, adequately protect the HCBS workforce, safeguard financial stability for 
HCBS providers, and accelerate long-term services and supports (LTSS) reform under section 
9817 of the ARP.  This increased federal funding can help states increase community living 
options for people with disabilities, in accordance with Title II of the Americans with Disabilities 
Act, 42 U.S.C.  1213112134, as interpreted by the Supreme Court in Olmstead v. L.C., 527 
U.S. 581 (1999), which requires public entities to administer services to individuals with 
disabilities in the most integrated setting appropriate to their needs.   In addition, this letter 
updates Medicaid retainer payment policy for HCBS providers during the COVID-19 PHE. 
Section 1: Increased Federal Medical Assistance Percentage (FMAP) under Section 9817 of 
the ARP 
Section 9817 of the ARP temporarily increases the FMAP by 10 percentage points for certain 
Medicaid1 HCBS expenditures beginning April 1, 2021, and ending March 31, 2022 (see 
Appendix A).  To receive the increased FMAP, states and territories must meet certain 
1 The increased FMAP under section 9817 of the ARP is not applicable to HCBS expenditures under the Childrens 
Health Insurance Program.   Page 2  State Medicaid Director 
  
requirements, referred to as Program Requirements below.  It is important to note that the 
increased FMAP for HCBS for any state or territory cannot exceed 95 percent. Additionally, any 
payment made to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, or 
American Samoa for expenditures on medical assistance subject to the FMAP increase must not 
be taken into account for purposes of applying payment limits under subsections (f) and (g) of 
section 1108 of the Social Security Act (the Act).  
 
A.  Eligible Services 
 
As required by section 9817 of the ARP, the increased FMAP is only available for expenditures 
for certain services provided under title XIX of the Act.  Appendix B provides a brief 
description of eligible services under section 9817 of the ARP and includes the corresponding 
Form CMS-64 claiming line for these services. Later in this letter is a further discussion of Form 
CMS-64 and the increased FMAP claiming process.  States can contact 
HCBSincreasedFMAP@cms.hhs.gov if they have questions about the services for which they 
can claim the increased FMAP.  
 
A state may not claim the increased FMAP for any HCBS expenditures other than those listed in 
Appendix B.  For example, Medicaid administrative claiming for HCBS activities performed by 
state No Wrong Door systems and state long-term care ombudsman programs are not eligible for 
the increased FMAP.2  These HCBS activities are administrative in nature and are not considered 
HCBS services as defined under section 9817(a)(2)(B) of the ARP and as described in Appendix 
B of this letter.  
 
B.  Program Requirements 
 
In accordance with section 9817(b) of the ARP, states must comply with two program 
requirements to receive the increased FMAP for HCBS expenditures: (1) federal funds 
attributable to the increased FMAP must be used to supplement existing state funds expended for 
Medicaid HCBS in effect as of April 1, 2021; and (2) states must use the state funds equivalent 
to the amount of federal funds attributable to the increased FMAP to implement or supplement 
the implementation of one or more activities to enhance, expand, or strengthen HCBS under the 
Medicaid program.  Requirements are effective retroactively to April 1, 2021. In other words, 
states cannot use the state funds equivalent to the amount of federal funds made available by the 
increased FMAP to pay for HCBS that is available under the Medicaid program as of April 1, 
2021.  These state funds must be used to enhance, expand, or strengthen HCBS beyond what is 
available under the Medicaid program as of April 1, 2021.  Additional information is provided 
later in this subsection related to the requirements for states that have implemented temporary 
changes to their HCBS programs in response to the COVID-19 PHE.   
 
States will be permitted to use the state funds equivalent to the amount of federal funds 
attributable to the increased FMAP through March 31, 2024, on activities aligned with the goals 
of section 9817 of the ARP.  This time period to expend funds attributable to the increased 
                                                           
2 As indicated in Appendix D, states could consider using the state funds equivalent to the amount of federal funds 
attributable to the increased FMAP to support these programs as part of their efforts to implement or supplement the 
implementation of one or more activities to enhance, expand, or strengthen HCBS under the Medicaid program.   
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 3  State Medicaid Director 
  
FMAP will provide states with sufficient time to design and implement short-term activities to 
strengthen the HCBS system in response to the COVID-19 PHE, as well as longer term strategies 
to enhance and expand the HCBS system and to sustain promising and effective programs and 
services.  It also aligns with the two-year time period during which states may file claims for 
federal financial participation (FFP) for Medicaid expenditures.  This time period will ensure that 
states have sufficient time to demonstrate that they fully expended the state funds equivalent to 
the amount of federal funds attributable to the increased FMAP for claims paid through March 
31, 2022. 
 
CMS expects states to demonstrate compliance with section 9817 of the ARP, beginning April 1, 
2021, and until the state funds equivalent to the amount of federal funds attributable to the 
increased FMAP are fully expended. To demonstrate compliance with the requirement not to 
supplant existing state funds expended for Medicaid HCBS, states must: 
 
  Not impose stricter eligibility standards, methodologies, or procedures for HCBS 
programs and services than were in place on April 1, 2021;  
  Preserve covered HCBS, including the services themselves and the amount, duration, and 
scope of those services, in effect as of April 1, 2021; and 
  Maintain HCBS provider payments at a rate no less than those in place as of April 1, 
2021.  
 
Please note that these requirements do not supersede other statutory or regulatory requirements 
that apply to section 1915(c) waivers, or other requirements under other provisions authorizing 
HCBS, including requirements set forth in Special Terms and Conditions under section 1115 
demonstrations and managed care authorities under which states are delivering HCBS.  For 
example, if states have implemented temporary changes to HCBS eligibility, covered services, 
and/or payment rates through the Appendix K template for section 1915(c) waivers, a disaster 
relief state plan amendment for section 1915(i) or (k) programs, or an Attachment K for HCBS 
services under a section 1115 demonstration, states are expected to retain those changes for as 
long as allowable under those authorities (e.g., according to the end date approved under an 
Appendix K but no later than 6 months post PHE).  However, CMS will not apply penalties or 
non-compliance restrictions on the receipt of the increased FMAP once the authority for those 
temporary changes has expired or if the state needs to implement changes to comply with other 
federal statutory or regulatory requirements.  
 
States should contact CMS about anticipated eligibility or other changes to their HCBS programs 
that could take effect before the state funds equivalent to the federal funds attributable to the 
increased FMAP are fully expended to ensure that the changes will not result in non-compliance 
with these requirements.  
 
To demonstrate compliance with the requirement to use state funds equivalent to the amount of 
federal funds attributable to the increased FMAP to implement or supplement the 
implementation of one or more activities to enhance, expand, or strengthen HCBS under the 
Medicaid program, states must spend the state funds on HCBS-related services and 
infrastructure, as discussed further in this letter.  States may use these funds to pay for additional 
Medicaid-covered services listed in Appendix B and, in turn, may be eligible for the increased 
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 4  State Medicaid Director 
  
FMAP on those expenditures one additional time.  However, once the state has reinvested state 
funds equivalent to the amount of federal funds attributable to the increased FMAP for additional 
Medicaid-covered services listed in Appendix B, the state should not claim the increased FMAP 
for subsequent expenditures occurring between April 1, 2021, and March 31, 2022, on Medicaid-
covered HCBS.  Please see Appendix E for an example of how a state could reinvest the funds 
attributable to the increased FMAP in additional Medicaid-covered HCBS to receive additional 
federal match. 
 
CMS understands that states may experience enrollment and utilization fluctuations unrelated to 
changes in state policies and procedures, especially during the COVID-19 PHE.  CMS will not 
apply penalties or non-compliance restrictions on the receipt of the increased FMAP if states 
experience reductions in HCBS enrollment, service utilization, or expenditures that are unrelated 
to changes in state policies or procedures.   
 
C.  Activities to Enhance, Expand, or Strengthen HCBS  
 
Under section 9817 of the ARP, states can implement a variety of activities, including 
enhancements to HCBS services, eligibility, infrastructure, and reimbursement methodologies, to 
enhance, expand, or strengthen Medicaid HCBS.  CMS understands that some states may have 
an immediate need to address the continued impact of the COVID-19 pandemic while also 
furthering longstanding state priorities to build HCBS capacity and to pursue innovative 
rebalancing strategies to reform LTSS systems.  The funds attributable to the increased FMAP 
described in section 9817 of the ARP are available to assist states to engage in simultaneous 
short-term and longer-term implementation activities.  
 
Examples of activities that states can initiate as part of this opportunity are provided in 
Appendices C and D. These appendices include activities to address COVID-related concerns, 
to promote HCBS capacity building and infrastructure development activities, and to pursue 
innovative LTSS rebalancing strategies.  CMS recognizes that states are in a unique position to 
identify and tailor activities that align with state goals and priorities, and accordingly, these 
examples are not exhaustive.   CMS will determine whether a states activities meet the 
requirements of section 9817 of the ARP through the required reporting discussed under 
Required Reporting on Activities to Enhance, Expand, or Strengthen HCBS under the Medicaid 
Program. 
 
States should follow the applicable rules and processes for section 1915(c) waivers, other 
Medicaid HCBS authorities, including section 1115 demonstrations, and other managed care 
authorities (as applicable), if they are making changes to an HCBS program and intend to use 
state funds equivalent to the funds attributable to the increased FMAP to pay the state share of 
the costs associated with those changes.  If states make programmatic changes to comply with 
section 9817 of the ARP, states should monitor section 1915(b) waiver expenditures.  For 
example, states should evaluate if activities to demonstrate compliance with section 9817 of the 
ARP (e.g., expanding the amount, duration, or scope of existing HCBS services provided in a 
managed care delivery system or increasing the HCBS provider payment rates) will increase 
expenditures above the projections approved in a section 1915(b) waiver.  If states have concerns 
about exceeding cost effectiveness projections, states should consider a waiver amendment, as 
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appropriate, to revise cost effectiveness projections prospectively.  CMS notes that increasing 
FMAP for HCBS services rendered through a section 1915(c) waiver generally will not have any 
adverse effect on demonstrating cost neutrality under a section 1915(c) waiver, but when states 
add HCBS to a section 1915(c) waiver, they must calculate the impact on cost neutrality prior to 
submitting the amendment.  Section 1115 demonstrations must be budget neutral, which means 
that the proposed demonstration cannot cost the federal government more than it would absent 
the demonstration.  CMS will work closely with states to determine the feasibility of their budget 
neutrality models and suggest changes as necessary.   
 
We note that states are not limited to using state funds equivalent to the amount of the increased 
FMAP for services that are otherwise covered in Medicaid; however, FFP is only available for 
covered services.  Please also note that, regardless of whether a state intends to claim FFP, the 
state should follow the reporting requirements described below under Required Reporting on 
Activities to Enhance, Expand, or Strengthen HCBS under the Medicaid Program for approval of 
the activity under section 9817 of the ARP. 
 
States are encouraged to review guidance and information from CMS to learn more about 
activities to enhance, expand, and strengthen HCBS under the Medicaid program. Recently 
released CMS documents include a Long-term Services and Supports Rebalancing Toolkit, a  
State Health Officials letter regarding Opportunities in Medicaid and CHIP to Address Social 
Determinants of Health (SDOH), and the Medicaid Long Term Services and Supports Annual 
Expenditures Report for Federal Fiscal Years 2017 and 2018.  
 
CMS recognizes the importance of effective stakeholder engagement processes that can provide 
states with varied perspectives on how to expand, enhance, and strengthen HCBS. States may 
want to consider engaging a broad community of stakeholdersMedicaid and other state agency 
leadership, participants in HCBS programs, residents in long-term care facilities, HCBS 
providers, family members and other caregivers, the aging and disability network, health plans, 
and the direct support workforceto provide insight, ideas, and feedback to inform the states 
approach to developing and implementing activities under section 9817 of the ARP.  Further, 
CMS expects that states will offer, in good faith and in a prudent manner, a public notice 
process, including tribal consultation as applicable, when implementing changes to their HCBS 
programs. 
 
D.  Required Reporting on Activities to Enhance, Expand, or Strengthen HCBS under 
the Medicaid Program 
 
CMS requires participating states to submit both an initial and quarterly HCBS spending plan 
and narrative to CMS on the activities that the state has implemented and/or intends to 
implement to enhance, expand, or strengthen HCBS under the Medicaid program to demonstrate 
that the state is supplementing, but not supplanting, existing state funds expended for Medicaid 
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HCBS.3,4  Spending plans and narratives may be submitted in a state preferred format. The state 
must submit the initial HCBS spending plan and narrative within 30 days of the release of this 
guidance. Please submit all HCBS spending plans and narratives to 
HCBSincreasedFMAP@cms.hhs.gov. CMS will review and approve the initial state spending 
plan and narrative within 30 days of a states submission if the submission adheres to the terms 
of this SMDL.  CMS will provide an electronic approval notification.   
 
  Initial HCBS Spending Plan Projection: The initial HCBS spending plan projection 
should estimate the total amount of funds attributable to the increase in FMAP that the 
state anticipates claiming between April 1, 2021, and March 31, 2022, as well as the 
anticipated expenditures for the activities the state intends to implement to enhance, 
expand, or strengthen HCBS under the state Medicaid program between April 1, 2021, 
and March 31, 2024. The spending plan projection is the primary place for quantitative 
information.  
  Initial HCBS Spending Narrative: The initial HCBS spending narrative is intended to 
provide information on the states required ARP section 9817 activities and the 
connection between the spending plan projection and the scope of the activities. States 
must provide sufficient detail to demonstrate that the states activities enhance, expand, 
or strengthen HCBS under the state Medicaid program.  States should explain how they 
intend to sustain such activities beyond March 31, 2024. 
 
When submitting the initial HCBS spending plan projection and narrative, the state should also 
submit a letter signed by the State Medicaid Director that provides a designated state point of 
contact for the quarterly spending plan and narrative submissions and an assurance of the 
following: 
  The state is using the federal funds attributable to the increased FMAP to supplement and 
not supplant existing state funds expended for Medicaid HCBS in effect as of April 1, 
2021;  
  The state is using the state funds equivalent to the amount of federal funds attributable to 
the increased FMAP to implement or supplement the implementation of one or more 
activities to enhance, expand, or strengthen HCBS under the Medicaid program; 
  The state is not imposing stricter eligibility standards, methodologies, or procedures for 
HCBS programs and services than were in place on April 1, 2021;  
  The state is preserving covered HCBS, including the services themselves and the amount, 
duration, and scope of those services, in effect as of April 1, 2021; and 
  The state is maintaining HCBS provider payments at a rate no less than those in place as 
of April 1, 2021. 
                                                           
3 The spending plan process described here is different from the budget submission process that states complete 
quarterly by submitting a form CMS-37 in the Medicaid Budget Expenditure System (MBES) related to quarterly 
Medicaid grants awards. For the latter process, CMS will send to states instructions regarding how to account for the 
increase to states projected federal share expenditures related to the increased HCBS FMAP on future budget 
submissions.   
4 These requirements do not necessitate that CMS promulgate new regulations because they can be implemented 
under existing authorities applicable to state reporting requirements set forth in section 1902(a)(6) of the Act and 
regulations at 42 C.F.R.  431.16. 
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 7  State Medicaid Director 
  
 
States also must submit a quarterly HCBS spending plan and narrative for CMS review and 
approval.  States may update their initial spending plan submissions through the quarterly 
spending plan submissions.  Updates and/or modifications to the quarterly HCBS spending plan 
and narrative should be highlighted for ease of CMS review.  The reporting interval is based on 
federal fiscal year quarterly reports.  States must report on a quarterly basis until funds are 
expended. As part of the reporting cycle, two documents to be submitted:  
 
  Quarterly HCBS Spending Plan: The quarterly HCBS spending plan should estimate, 
by quarter and in total, the amount of funds attributable to the increase in FMAP that the 
state has claimed and/or anticipates claiming between April 1, 2021, and March 31, 2022, 
as well as anticipated and/or actual expenditures for the states activities to implement, to 
enhance, expand, or strengthen HCBS under the state Medicaid program between April 1, 
2021, and March 31, 2024. States must submit the quarterly projected spending plan 75 
days prior to the beginning of each federal fiscal quarter beginning with the quarter that 
starts on October 1, 2021, and until the states funds in an amount equivalent to the 
enhanced FMAP received by the state have been expended.  
 
  Quarterly HCBS Spending Narrative: Similar to the narrative that was submitted with 
the initial HCBS spending plan, a shorter narrative for progress reports serves to provide 
activity updates.  A state may also choose to provide information on activity outcomes, 
lessons learned, challenges, or any other information that the state deems as relevant and 
important to advancing HCBS.  States should explain how they intend to sustain such 
activities beyond March 31, 2024.  States must submit the HCBS spending narrative 75 
days prior to the beginning of each federal fiscal quarter beginning with the quarter that 
starts on October 1, 2021, and until the states funds in an amount equivalent to the 
enhanced FMAP received by the state has been expended.  
 
CMS will publicly post summary information reported by states on their initial and quarterly 
spending plans and narrative, including the amount of funds attributable to the FMAP increase 
that the state anticipates claiming or has claimed and the activities the state intends to implement 
and has implemented to enhance, expand, or strengthen HCBS under the state Medicaid 
program. 
 
The initial and quarterly spending plans and narrative should be inclusive of any additional 
federal funds attributable to increased FMAP that the state expects to receive by reinvesting the 
state funds equivalent to the amount of federal funds attributable to the increased FMAP as state 
share for additional Medicaid-covered HCBS between April 1, 2021, and March 31, 2022.  As 
noted previously, states may reinvest state funds equivalent to the amount of federal funds 
attributable to the increased FMAP for additional Medicaid-covered services listed in Appendix 
B once, and states should not claim the increased FMAP for subsequent expenditures occurring 
between April 1, 2021, and March 31, 2022 on Medicaid-covered HCBS.  In the initial and 
quarterly spending plans and narratives, states should demonstrate that the subsequent 
expenditures are for activities for which the state does not receive the increased FMAP.  
 
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
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When submitting the quarterly HCBS spending plan and narrative, the designated state point of 
contact should attest to the following via email: 
  The state is using the federal funds attributable to the increased FMAP to supplement and 
not supplant existing state funds expended for Medicaid HCBS in effect as of April 1, 
2021;  
  The state is using the state funds equivalent to the amount of federal funds attributable to 
the increased FMAP to implement or supplement the implementation of one or more 
activities to enhance, expand, or strengthen HCBS under the Medicaid program; 
  The state is not imposing stricter eligibility standards, methodologies, or procedures for 
HCBS programs and services than were in place on April 1, 2021;  
  The state is preserving covered HCBS, including the services themselves and the amount, 
duration, and scope of those services, in effect as of April 1, 2021; and 
  The state is maintaining HCBS provider payments at a rate no less than those in place as 
of April 1, 2021. 
 
These reporting requirements are based largely on those of the Balancing Incentive Program,5 
which also provided a temporary FMAP increase for Medicaid HCBS.  CMS has purposefully 
developed simplified reporting processes for section 9817 of the ARP to expedite the release of 
funds and to minimize state administrative burdens.  CMS has also aligned time-frames for 
reporting with state FMAP claiming periods.  These operational requirements, combined with 
using the Form CMS-64 for states to claim the increased FMAP for HCBS expenditures, provide 
a pathway for states to quickly access funding to implement activities to expand, enhance, and 
strengthen state HCBS systems.  By providing quicker access to the funding, states are in a 
stronger position to address the impact of the COVID-19 pandemic on Medicaid HCBS 
beneficiaries and the providers who serve them.   
 
Please note that these initial and quarterly HCBS spending plan and narrative requirements do 
not supersede any authorization requirements that apply to section 1915(c) waivers, other 
Medicaid HCBS authorities, including section 1115 demonstrations, and managed care 
authorities. States should follow the applicable rules and processes of those authorities if they are 
making changes to an HCBS program that operates under section 1915(c) or another Medicaid 
authority and intend to use the funds attributable to the increased FMAP to pay the state share of 
the costs associated with those changes. For example, if a state seeks to expand HCBS services, 
the state will need to explore whether an amendment to an HCBS authority is needed. 
Additionally, if the HCBS services will be provided in a managed care delivery system, a 
Medicaid managed care authority is needed to authorize those approved service(s), and changes 
to the states contracts with its managed care plans to operationalize any programmatic changes 
may be needed.  States and their actuaries will also need to determine if the actuarially sound 
capitation rates need to be revised and if a corresponding rate amendment is necessary (i.e., to 
address any expansion of these services or the amount, duration, or scope of these services or 
increasing the HCBS provider payments).  Additionally, states that seek to contractually require 
their managed care plans to increase HCBS provider payments must adhere to federal 
                                                           
5 The Balancing Incentive Program (BIP), authorized by the Affordable Care Act, offered states temporary enhanced 
FFP for Medicaid HCBS. For an evaluation of the program see: https://aspe.hhs.gov/basic-report/final-outcome-
evaluation-balancing-incentive-program.  
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requirements for state directed payments in accordance with 42 C.F.R.  438.6(c), including 
prior approval as required.  
 
States should reach out to their CMS contact if they have any questions about how to request 
approval under Medicaid authorities.  In order to facilitate the review process, it is highly 
recommended that states submit amendments solely focused on the activity required to meet the 
needs in the CMS approved initial and/or quarterly HCBS spending plan and narrative.  
Depending on the nature of proposed actions, and the timeframes for their implementation, 
Disaster Relief state plan amendments, Appendix K updates, or an Attachment K for HCBS 
services under a section 1115 demonstration, may be submitted, and/or traditional state plan 
amendments, waiver amendments, or section 1115 demonstration amendments.  To the extent 
feasible, CMS will prioritize review and approval of these requests. 
 
E.  Claiming FFP at the Increased FMAP on the Form CMS-37 and Form CMS-64 
FFP associated with the increased FMAP is available for qualifying expenditures for the HCBS 
services listed in Appendix B on a quarterly basis through Form CMS-37 and Form CMS-64 
submissions in the automated Medicaid Budget and Expenditure System (MBES).  The increased 
FMAP is available for qualifying HCBS expenditures incurred on or after April 1, 2021, through 
March 31, 2022.6  Failure to follow the required steps could result in CMS initiating action to 
defer or disallow certain expenditures. 
  Obtaining FFP associated with the increased FMAP through the Form CMS-37: 
Once the state completes the initial HCBS spending plan and narrative and, in subsequent 
quarters, the quarterly HCBS spending plan and narrative described in section D of this 
letter, CMS will provide FFP associated with the increased FMAP to states through the 
process described in 42 CFR  430.30(b) for state quarterly budget estimates submitted 
through the Form CMS-37. 
 
  Obtaining FFP associated with the increased FMAP through the Form CMS-64:  
Once the state completes the initial HCBS spending plan and narrative and, in subsequent 
quarters, the quarterly HCBS spending plan and narrative described in section D of this 
letter, CMS will provide FFP associated with the increased FMAP to states through the 
process described in 42 CFR  430.30(c) for allowable state quarterly expenditures 
submitted through the CMS-64.  By claiming FFP at the increased FMAP, the state 
agrees to use an equivalent amount of state funds, attributable to the increase from 
section 9817 of the ARP, only for purposes of providing new or expanded offerings of 
HCBS and related supports and infrastructure described but not limited to Appendices C 
and D.  Funding must be used to supplement not supplant existing services. 
                                                           
6 The claiming process is available to states to participate in from April 1, 2021 through March 31, 2022. States that 
are approved to use their initial reinvestment funds for Medicaid-covered services listed in Appendix B may be 
eligible for the increased FMAP on those initial expenditures. However, once states have reinvested state funds 
equivalent to the amount of federal funds attributable to the increased FMAP in additional Medicaid-covered HCBS, 
states should not claim the increased FMAP for subsequent expenditures between April 1, 2021 and March 31, 2022 
on Medicaid-covered HCBS.   
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 10  State Medicaid Director 
 MBES Modifications: We are working to modify MBES/CBES as soon as possible to
reflect each states increased FMAP.7  Once MBES/CBES is reprogrammed to utilize the
increased FMAP, the system will enable state entry of expenditures at the increased
FMAP, and apply such FMAP for the actual claimed expenditures that are incurred.
Expenditure reporting associated with the increased FMAP for the third quarter of fiscal
year (FY) 2021 may be delayed.  In those cases, states may need to report expenditures
associated with the increased FMAP through prior period adjustments in subsequent
quarters of the FY.
 Other Expenditure Reporting Information: States should follow existing federal
requirements regarding the applicability of a particular match rate available for a given
quarter (see Appendix A).  The applicable FMAP is based on date of payment, not date
of service for current quarter original expenditures.  The FMAP applicable to
expenditures for prior period adjustments should be the FMAP at which the original
expenditure was claimed, for both private and governmental providers.  All states are
responsible for reporting Medicaid collections and overpayments on the CMS-64.  States
must report overpayments and collections at the same match rate at which the
expenditures were originally claimed, including when the original rate incorporated the
10 percentage point FMAP increase.  Recoveries of FFP must be returned at the same
match rate at which they were originally claimed.  Therefore, if a Medicaid expenditure
was claimed using the increased FMAP, the federal share of any recoveries associated
with that expenditure would have to be returned using the same increased FMAP.
Consistent with existing requirements, states must document expenditures to ensure a
clear audit trail, including by isolating expenditures that are matched at increased FFP
rates.  CMS will conduct oversight to ensure that the state expenditures are allowable and
accurate, including with respect to the matching rate claimed.
 Claiming the Increased FMAP for Managed Care Expenditures: States should report
expenditures eligible for the 10 percentage point increase on the Form CMS-64. The
portion of the capitation rate that is attributable to only services in Appendix B and upon
which an increased match may be claimed should be determined with the data utilized to
develop the applicable capitation rates.  The use of this claiming methodology is solely
for FFP claiming purposes and does not negate the requirements that Medicaid capitation
rates be actuarially sound and must be developed in compliance with federal
requirements under 42 C.F.R. part 438.  States have used similar claiming methodologies
for FFP for services and populations such as family planning, section 1915(k) benefits,
and the new adult group.  States may be required to submit their managed care claiming
methodologies for the increased FMAP under ARP section 9817 to CMS for review and
approval.
7 Some FFP related to ARP may be issued as separate grant awards. As such, CMS may also update the Form CMS-
37 for the applicable quarters to identify budget estimates associated with the increased FMAP. 
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 11  State Medicaid Director 
Section 2: Medicaid Coverage of HCBS Retainer Payments during the COVID-19 PHE 
Retainer payments allow certain providers to continue to bill for individuals who are enrolled in 
an HCBS program or who otherwise receive personal care services authorized under sections  
1915(c), 1915(i), 1915(k), or 1115, as specified in their person-centered service plan, when 
circumstances prevent the individual from receiving the service.  Previously, CMS had indicated 
that states may authorize up to three 30-day episodes of retainer payments for an individual 
during the period of the COVID-19 PHE using the Appendix K template for section 1915(c) 
waivers, a disaster relief state plan amendment for section 1915(i) or (k) programs, or an 
Attachment K for HCBS services under a section 1115 demonstration.  Due to the duration of the 
COVID-19 PHE, which has spanned two calendar years, CMS is authorizing states to choose to 
offer up to three additional 30-day periods in calendar year 2021. CMS notes that these 
additional episodes may assist states and providers in reopening services while limiting access to 
buildings to allow for proper social distancing. 
These additional days of retainer payments may be retroactively effective to January 1, 2021.  
States are encouraged to submit an Appendix K, section 1115 demonstration Attachment K, a 
disaster relief state plan amendment, or section 1115 demonstration amendment to implement 
any additional days of retainer payments.  Guardrails contained in the retainer payment guidance 
reflected in Frequently Asked Questions issued on June 30, 2020,8 continue to apply to retainer 
payments authorized in 2021; this additional flexibility is additive to that guidance. 
For states that are seeking to contractually require managed care plans to make retainer payments 
to providers where the authorized service is covered under the managed care plan contracts, 
states must seek approval under 42 C.F.R.  438.6(c) for state directed payments.  In order for 
states to seek approval under 42 C.F.R.  438.6(c), the retainer payments must be authorized as 
part of the section 1915(c) HCBS waiver, section 1115(a) demonstration for section 1915(c) 
HCBS services, or other Medicaid authority.  Once the retainer payments are authorized under 
one of these authorities, a state directed payment preprint must also be submitted to effectuate 
the state directed retainer payments under a states contract(s) with its managed care plans.  For 
technical assistance on state directed payments, please contact us at 
statedirectedpayment@cms.hhs.gov.   
Closing 
CMS remains committed to supporting states with strengthening and enhancing their HCBS 
systems and helping to ensure that Medicaid beneficiaries receive high quality, cost-effective, 
person-centered services in the setting of their choice.  Section 9817 of the ARP provides states 
with additional federal funding for Medicaid HCBS that states can use to enhance, expand, or 
strengthen HCBS in response to the COVID-19 PHE, accelerate LTSS reform, and address other 
state-specific HCBS needs and priorities, such as Olmstead planning.  As detailed below, CMS is 
available to provide continued technical assistance to states when implementing this provision. 
8 COVID-19 Frequently Asked Questions (FAQs) for State Medicaid and Childrens Health Insurance Program 
(CHIP) Agencies, https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf  
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Programmatic and financial questions and state HCBS spending plans and narratives for section 
9817 of the ARP can be submitted to HCBSincreasedFMAP@cms.hhs.gov.  
For specific information about using section 1115(a) demonstration authority to support state 
efforts related to section 9817 of the ARP, contact Teresa DeCaro, Acting Group Director, State 
Demonstrations Group, at Teresa.DeCaro@cms.hhs.gov.    
For questions about retainer payments during the COVID-19 PHE, contact Ralph Lollar at 
Ralph.Lollar@cms.hhs.gov.  
Sincerely, 
Anne Marie Costello 
Acting Deputy Administrator and Director 
Enclosure 
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 13  State Medicaid Director 
Appendix A: Applicability of the Increased Federal Medical Assistance Percentage 
(FMAP) to Other FMAPs Specified in the Social Security Act 
 Section 9817 of the ARP temporarily increases the FMAP by 10 percentage points, up to 95 
percent, for allowable medical assistance expenditures for certain HCBS expenditures under the 
Medicaid program beginning April 1, 2021, and ending March 31, 2022.  In general, the 
increased FMAP is available for allowable Medicaid HCBS medical assistance expenditures for 
which federal matching is paid ordinarily at the state-specific FMAP rate defined in the first 
sentence of section 1905(b) or 1905(ff) of the Act.  In no case may the FMAP determined for a 
state be more than 95 percent with respect to such HCBS expenditures.  
To the extent applicable, the increased FMAP under section 9817 of the ARP is additive to: 
 Section 6008(a) of the Families First Coronavirus Response Act;
 Adult group expenditures matched at the newly eligible FMAP specified in section 1905(y)
of the Act;
 Adult group expenditures matched at the expansion state FMAP specified in section
1905(z) of the Act;
 Expenditures matched at the disaster-recovery FMAP specified in section 1905(aa) of the
Act;
 Expenditures subject to the temporary increase in FMAP specified in section 1905(ii) of the
Act for medical assistance under state Medicaid plans that begin to expend amounts for all
individuals described in 1902(a)(10)(A)(i)(VIII); and
 HCBS expenditures matched at the increased FMAP specified in section 1915(k) of the Act.
The increase does not apply with respect to the following Medicaid expenditures:  
 Medicaid administrative expenditures, for which the matching rate is not defined in section
1905(b) or 1905(ff);
 Expenditures for family planning services eligible for 90 percent match as specified in
section 1903(a)(5);
 Expenditures for services received through an Indian Health Service (IHS) facility
(including an IHS facility operated by an Indian tribe or tribal organization), as the 100
percent match rate for these services is not the same as the state-specific FMAP defined in
the first sentence of section 1905(b) to which the 6.2 percentage point FMAP increase
applies;
 Expenditures matched at 100 percent for individuals in Qualifying Individuals programs;
 Health home services under section 1945 of the Act; and
 Any other expenditures not matched at the FMAP determined for each state that is defined in
the first sentence of section 1905(b) or 1905(ff).
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incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 14  State Medicaid Director 
Appendix B: Home and Community-Based Services Eligible for the ARP Section 9817 
Temporary Increased FMAP 
HCBS  Benefit Description  Corresponding 
Medicaid  Form 64 
Authority  Claiming Line 
State Plan Benefits 
Home Health  Home health services are mandatory services  Line 12-Home 
Care  authorized at section 1905(a)(7) of the Act, and  Health Services 
defined in regulations at 42 C.F.R.  440.70. Home 
health services include nursing services, home health 
aide services, medical supplies, equipment, and 
appliances, and may include therapy services 
(physical therapy, occupational therapy, speech 
pathology and audiology). 
Personal Care  Personal care services (PCS) are optional services  Line 23A-Personal 
Services  authorized at section 1905(a)(24) and defined in  Care Services-
regulations at 42 C.F.R.  440.167. Personal care  Regular Payment 
services can include a range of human assistance 
provided to persons who need assistance with daily 
activities. These services are provided to individuals 
who are not an inpatient or resident of a hospital, 
nursing facility (NF), intermediate care facility for 
individuals with intellectual disabilities (ICF/IID), or 
institution for mental diseases (IMD), and may be 
provided in the individuals home and, at state option, 
in other locations.   
Self-Directed  Section 1915(j) of the Act allows self-direction of  Line 23B-Personal 
Personal Care  state plan personal care services.  Requirements are  Care Services-SDS 
Services  set forth in 42 CFR Part 441 Subpart J.  1915(j) 
Case  Case management services, as defined under sections  Line 24A-Targeted 
Management  1905(a)(19) and 1915(g) of the Act and 42 CFR   Case Management 
440.169 and 42 CFR  441.18, assist Medicaid- Services-
eligible individuals in gaining access to needed  Community Case 
medical, social, educational, and other services.  Management 
Line 24B-Case 
Management State 
Wide 
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HCBS  Benefit Description  Corresponding 
Medicaid  Form 64 
Authority  Claiming Line 
School Based  These services include medical assistance for covered  [This line is under 
Services  services under section 1905(a) that are furnished to a  development; 
child with a disability because such services are  further instructions 
included in the child's individualized educational  will be issued.] 
program established pursuant to Part B of the   
Individuals with Disabilities Education Act or 
furnished to an infant or toddler with a disability 
because such services are included in the child's 
individualized family service plan. 
 
Only school based services that meet the definition of 
one or more of the services listed in this appendix can 
be claimed at the increased FMAP under section 9817 
of the ARP.  
Rehabilitative  The rehabilitative services benefit is an optional  [This line is under 
Services  Medicaid state plan benefit authorized at section  development; 
1905(a)(13) of the Act and codified in regulation at  further instructions 
42 CFR  440.130(d) as medical or remedial  will be issued.] 
services recommended by a physician or other 
licensed practitioner of the healing arts, within the 
scope of his practice under State law, for maximum 
reduction of physical or mental disability and 
restoration of a beneficiary to his best possible 
functional level. All rehabilitative services, 
including mental health and substance use disorder 
services, authorized under this benefit can be claimed 
at the increased FMAP under section 9817 of the 
ARP.  
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HCBS  Benefit Description  Corresponding 
Medicaid  Form 64 
Authority  Claiming Line 
Private Duty  Private duty nursing is an optional Medicaid state  [This line is under 
Nursing9  plan benefit authorized at section 1905(a)(8) of the  development; 
Act and codified in regulation at 42 CFR  440.80 as  further instructions 
nursing services for recipients who require more  will be issued.] 
individual and continuous care than is available from   
a visiting nurse or routinely provided by the nursing 
staff of the hospital or skilled nursing facility. These 
services are provided: (a) by a registered nurse or a 
licensed practical nurse; (b) under the direction of the 
recipient's physician; and  (c) to a recipient in one or 
more of the following locations at the option of the 
State:  (1) his or her own home;  (2) a hospital; or 
(3) a skilled nursing facility. 
 
The increased FMAP under section 9817 of the ARP 
is only applicable when the service is provided in a 
beneficiarys own home, and is being included here 
based on the authority at ARP section 
9817(a)(2)(B)(vii) given to the Secretary to specify 
additional services eligible for enhanced funding.  
Alternative  Any of the Medicaid-covered services described  Follow CMS-64.9 
Benefit Plans  under section 9817 of the ARP are eligible for the  Base Category of 
(Section 1937 of  enhanced match when authorized under an approved  Service Definitions 
the Act)  Alternative Benefit Plan. 
HCBS Authorities 
Section 1915(c)  Waiver authority found at section 1915(c) of the Act  Line 19A  Home 
gives states the option to offer long-term services and  and Community-
supports (LTSS) in home and community-based  Based Services  
settings to individuals who would otherwise require  Regular Payment 
institutional care.  States have broad latitude to  (Waiver) 
determine the services to offer under waiver 
programs, consistent with the benefit package 
specified in section 1915(c)(4)(B) of the Act.   For 
example, services may include home accessibility 
modifications (e.g., installing a wheelchair ramp or 
grab bars in a shower) to improve individuals ability 
to remain in their homes and prevent institutional 
admission. 
                                                           
9 ARP section 9817(a)(2)(B) identifies certain services that are eligible for the HCBS increased FMAP. While 
private duty nursing is not explicitly identified as among the eligible services, CMS has determined that 
expenditures for private duty nursing services delivered in the home qualify under such other services specified by 
the Secretary of Health and Human Services in ARP section 9817(a)(2)(B)(vii) and are eligible for the HCBS 
increased FMAP.  
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HCBS  Benefit Description  Corresponding 
Medicaid  Form 64 
Authority  Claiming Line 
Section 1915(i)  Section 1915(i) is an optional state plan benefit that  Line 19B- Home 
allows states to provide HCBS to individuals who  and Community-
meet state-defined needs-based criteria that are less  Based Services - 
stringent than institutional criteria (and, if chosen by  State Plan 1915(i) 
the state, target group criteria) as set forth in 42 CFR  Only Payment 
Part 441 Subpart M. States have broad latitude to 
determine the services to offer under the section 
1915(i) state plan benefit option, consistent with the 
benefit package specified in section 1915(c)(4)(B) of 
the Act.   
Section 1915(j)  Section 1915(j) of the Act allows self-direction of   Line 19C- Home 
 Self-directed  HCBS otherwise available under a section 1915(c)  and Community-
1915(c) services.  waiver program that are provided to an individual  Based Services - 
who has been determined eligible for the self-directed   State Plan 1915(j) 
option.  Requirements are set forth in 42 CFR Part  Only Payment 
441 Subpart J.  
Section 1915(k)  The section 1915(k) Community First Choice (CFC)  Line 19D- Home 
state plan benefit provides certain individuals, who  and Community 
meet an institutional level of care, the opportunity to  Based Services 
receive necessary personal attendant services and  State Plan 1915(k) 
supports in a home and community-based setting.  Community First 
States receive an extra six percentage points of  Choice 
federal match for CFC service expenditures. To the 
extent applicable, the increased FMAP under section 
9817 of the ARP is additive to the increased FMAP 
specified in section 1915(k).  
Program of All- PACE provides comprehensive medical and social  Line 22- Programs 
Inclusive Care  services to certain frail, elderly individuals, most of  Of All-Inclusive 
for the Elderly  whom are dually eligible for Medicare and Medicaid.  Care Elderly 
(PACE)  An interdisciplinary team of health professionals 
provides PACE participants with coordinated care. 
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HCBS  Benefit Description  Corresponding 
Medicaid  Form 64 
Authority  Claiming Line 
Managed Long- Managed long term services and supports (MLTSS)  [This line is under 
Term Services  refers to the delivery of LTSS through capitated  development; 
and Supports  Medicaid managed care programs.  Only the state  further instructions 
plan and HCBS services defined in this appendix that  will be issued.] 
are provided through a managed care delivery system 
are eligible for the enhanced FMAP referenced in this 
guidance.  States can implement MLTSS using an 
array of managed care authorities, including a section 
1915(a) voluntary program, a section 1932(a) state 
plan amendment, a section 1915(b) waiver, or a 
section 1115 demonstration. Any of those managed 
care authorities can be paired with other Medicaid 
authorities, such as section 1905(a), 1915(i), 1915(j), 
or 1915(k) or an HCBS waiver program under section 
1915(c) to authorize HCBS benefits to be delivered 
through a managed care delivery system.  See 
Claiming the Increased FMAP for Managed Care 
Expenditures in section 1.E of this letter for more 
information.  
Demonstrations 
Section 1115  States can utilize section 1115(a) demonstration  Follow CMS-64.9 
authority to test new strategies to promote the  Base Category of 
objectives of the Medicaid program that are not  Service Definitions 
available under other authorities. Section 1115(a)(1) 
of the Act allows the Secretary to waive compliance 
with the Medicaid requirements of section 1902 of 
the Act, including but not limited to statewideness 
and comparability, to the extent and for the period 
necessary to carry out the demonstration project. In 
addition, section 1115(a)(2) of the Act allows the 
Secretary to provide FFP for demonstration costs that 
would not otherwise be considered as federally 
matchable expenditures under section 1903 of the 
Act, to the extent and for the period prescribed by the 
Secretary. Any of the Medicaid-covered HCBS 
services described above are eligible for the enhanced 
match when authorized under an approved 1115 
demonstration.  
 
 
   
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Appendix C: Examples of Section 9817 of the ARP Activities to Support State COVID-
Related HCBS Needs 
Under section 9817 of the ARP, states can implement a variety of activities to enhance, expand, 
or strengthen Medicaid HCBS. This appendix provides examples of activities that states can 
initiate as part of this opportunity to address COVID-related concerns during the period of the 
public health emergency. 
 
Activity   Activity Description 
Increased Access to HCBS 
New and/or  Provide new or additional Medicaid HCBS services or increase the 
Additional HCBS   amount, duration, or scope of HCBS to reduce the risk of 
institutionalization during the COVID-19 PHE.  
HCBS Provider Payment Rate and Benefit Enhancements 
Payment Rates  Increase rates for home health agencies, PACE organizations, and 
agencies or beneficiaries that employ direct support professionals 
(including independent providers in a self-directed or consumer-
directed model) to provide HCBS under the state Medicaid program.  
CMS expects that the agency, organization, beneficiary, or other 
individuals that receive payment under such an increased rate will 
increase the compensation it pays its home health workers or direct 
support professionals. An increase to the PACE Medicaid capitation 
rate can be implemented as part of the states regular annual rate 
update or on a temporary basis as an interim rate increase, but must 
comply with existing submission, review, and approval requirements. 
States are not permitted to provide supplemental funding to PACE 
organizations outside of the PACE Medicaid capitation payment due 
to regulatory requirements. 
Leave Benefits  Provide paid sick leave, paid family leave, and paid medical leave for 
home health workers and direct support professionals that are not 
already included in the service rate/rate methodology. 
Specialized Payments  Provide hazard pay, overtime pay, and shift differential pay for home 
health workers and direct support professionals that are not already 
included in the service rate/rate methodology. Provide adult day 
centers with funding to make physical, operational, or other changes 
to safely deliver services during the COVID-19 PHE.   
Supplies and Equipment 
Purchase Personal  Purchase PPE and routine COVID testing for direct service workers 
Protective Equipment  and people receiving HCBS, to enhance access to services and to 
(PPE) and Testing  protect the health and well-being of home health workers and direct 
Supplies  support professionals.  
Work Force Support 
Workforce  Conduct activities to recruit and retain home health workers and 
Recruitment  direct support professionals.  Offer incentive payments to recruit and 
retain home health workers and direct support professionals. 
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Activity   Activity Description 
Workforce Training  Provide training for home health workers and direct support 
professionals that is specific to the COVID-19 PHE. 
Caregiver Support 
Supports for Family  Support family care providers of eligible individuals with needed 
Caregivers  supplies and equipment, which may include items not typically 
covered under the Medicaid program, such as PPE and payment as a 
service provider.  
Support to Improve Functional Capabilities of Persons with Disabilities 
Assistive Technology  Provide assistive technologies (including internet activation costs 
and Other Supports  necessary to support use of the assistive technologies), staffing, and 
for Persons with  other costs incurred during the COVID19 PHE in order to mitigate 
Disabilities  isolation and ensure an individuals person-centered service plan 
continues to be fully implemented. 
Transition Support 
One-Time Community  Facilitate individuals transitioning from an institutional or another 
Transition Costs  provider-operated congregate living arrangement (such as a group 
home or homeless shelter) to a community-based living arrangement 
in a private residence where the person is directly responsible for his 
or her own living expenses. One-time community transition costs 
may include payment of necessary expenses to establish a 
beneficiarys basic living arrangement, such as security deposits, 
utility activation fees, and essential household furnishings, for 
example.10  
Transition  Provide transition coordination services to eligible individuals who 
Coordination  had to relocate to a nursing facility or institutional setting from their 
homes during the COVID19 PHE, or moved into congregate non-
institutional settings as a result of the COVID-19 PHE, as well as for 
temporary relocation of residents from various types of congregate 
settings to community-based settings to reduce the risk of COVID-19 
infection during the COVID-19 PHE. 
Mental Health and Substance Use Disorder Services 
Skill rehabilitation  Assist eligible individuals in receiving mental health services, 
substance use treatment and recovery services, and necessary 
rehabilitative services to regain skills lost during the COVID19 
PHE. 
Expanding Capacity  Recruit additional behavioral health providers, implement new 
behavioral health services, increase pay rates for behavioral health 
providers, expand access to telehealth, or make other changes to 
address increases in overdose rates or other mental health and/or 
substance use disorder treatment and recovery service needs of 
Medicaid beneficiaries receiving HCBS during the COVID19 PHE. 
                                                           
10 See State Health Office Letter # 21-001, Opportunities in Medicaid and CHIP to Address Social Determinants of 
Health (SDOH), for more information on one-time community-transition costs.  
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Activity   Activity Description 
Outreach 
Educational Materials  Prepare information and public health and educational materials in 
accessible formats for individuals receiving HCBS (including formats 
accessible to people with low literacy or intellectual disabilities) 
about prevention, treatment, recovery and other aspects of COVID
19 for eligible individuals, their families, and the general community. 
States could leverage relationships with community partners, such as 
Area Agencies on Aging, Centers for Independent Living, non-profit 
home and community-based services providers, and other entities 
providing HCBS for these activities. 
Language Assistance   Pay for American sign language and other language interpreters to 
assist in providing HCBS to eligible individuals and to inform them 
about COVID19. 
Access to COVID-19 Vaccines 
Support for  Assist with scheduling vaccine appointments. Provide transportation 
Individuals with  to vaccine sites. Provide direct support services for vaccine 
HCBS Needs and  appointments. Develop and implement in-home vaccination options. 
Their Caregivers  Education and outreach about the COVID-19 vaccine. 
 
   
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Appendix D: Examples of Section 9817 of the ARP Activities to Support State HCBS 
Capacity Building and LTSS Rebalancing Reform 
Under section 9817 of the ARP, states can implement a variety of activities to enhance, expand, 
or strengthen Medicaid HCBS. This appendix provides examples of activities that states can 
initiate as part of this opportunity to support state HCBS capacity building and LTSS 
rebalancing. 
 
Activity Function  Activity Description 
New and/or  Provide new or additional Medicaid HCBS services or increase the 
Additional HCBS   amount, duration, or scope of HCBS; funding must be used to 
supplement not supplant existing services. 
Building No Wrong  Improve access to HCBS through non-administrative NWD activities 
Door Systems  such as establishing toll free phone lines, developing informational 
(NWD)  websites and automating screening and assessment tools, and conducting 
marketing and outreach campaigns.  
Strengthening  Adopting standardized functional assessments. Enhancing person-
Assessment and  centered planning practices. Providing person-centered planning 
Person-Centered  training. 
Planning Practices  
Quality  Upgrading critical incident management reporting systems. Adopting 
Improvement  new HCBS quality measures. Implementing improvements to quality 
Activities  measurement, oversight, and improvement activities.  Implementing the 
HCBS Consumer Assessment of Healthcare Providers and Systems 
(CAHPS) or another experience of care survey. 
Developing Cross- Creating incentives for managed care plans or providers to develop 
System  partnerships with community-based organizations, social service 
Partnerships  agencies, counties, housing agencies, and public health agencies. 
Promoting provider collaborations by requiring the formation of and 
participation in regional/local provider networks.  Building Medicaid-
housing partnerships. Building social determinants of health (SDOH) 
network partnerships. 
Training and  Providing caregiver training and education. Providing in-person or 
Respite   virtual training to beneficiaries, caregivers, and/or providers to support 
community integration (e.g., to support beneficiaries with seeking 
employment, to train providers or caregivers to support individuals with 
behavioral challenges that can make it difficult to access community 
resources).  Providing respite services to support family caregivers. 
Eligibility Systems  Implementing new eligibility policies and/or procedures, such as to 
implement expedited eligibility for HCBS (subject to CMS approval), or 
streamline application and enrollment processes 
Reducing or  Increasing the number of HCBS waiver slots in order to reduce or 
Eliminating HCBS  eliminate waiver waiting lists. 
Waiting Lists 
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Activity Function  Activity Description 
Institutional  Embedding options counselors into hospital discharge programs. 
Diversion  Strengthening/improving Preadmission Screening and Resident Review 
(PASRR) processes to prevent unnecessary institutionalization. 
Community  Expanding a community transition program to additional populations or 
Transition  institutional settings. Improving the use and availability of data (e.g., 
Minimum Data Set, Medicare and Medicaid claims and encounter data) 
to support community transition programs.  Providing additional one-
time community transition services or other HCBS that can help to 
support the transition from institutional settings.  
Expanding  Expanding self-directed programs. Creating financial incentives to 
Provider Capacity  expand the number, retention rates, and expertise/skills of the direct care 
workforce.  Providing nursing facilities or other institutional settings 
with funding to convert to assisted living facilities or to provide adult 
day services, respite care, or other HCBS.  
Addressing Social  Assessing health disparities among older adults and people with 
Determinants of  disabilities. Testing alternative payment methodologies or the delivery 
Health and Health  of new services that are designed to address SDOH that may include 
Disparities  housing-related supports such as one-time transition costs, employment 
supports, and community integration, among others.  Providing more 
intensive care coordination for individuals with significant 
socioeconomic needs based on risk-stratification modeling.  
Employing Cross- Establishing data sharing and governance agreements that enumerate 
system Data  standards and practices for data sharing among state and county 
Integration Efforts  agencies, providers, and community-based organizations such as with 
the National Adult Maltreatment Reporting System.  Providing training 
and technical assistance to build providers performance measurement 
and predictive analytics capabilities. Building a stronger health and 
welfare system by integrating claims and encounter data with the states 
incident management system. 
Expanding Use of  Making investments in infrastructure to facilitate incorporation of HCBS 
Technology and  into interoperable electronic health records (EHRs).  Covering 
Telehealth  individual tele-communications start-up costs (e.g., equipment, internet 
connectivity activation costs).  Testing the impact of assistive 
technologies on the need for in-person supports.  Providing 
smartphones, computers, and/or internet activation fees to address 
functional needs, promote independence, and/or support community 
integration. 
Providing Access  Providing eyeglasses, wheelchair transfer boards, and adaptive cooking 
to Additional  equipment to address functional needs, promote independence, and/or 
Equipment or  support community integration. 
Devices  
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Activity Function  Activity Description 
Adopting Enhanced  Implementing health information technology care coordination 
care Coordination  enhancements such as notification systems and capabilities (e.g., 
hospital admission, discharge, and transfer notifications) to share 
information across different health care settings.  Integrating Medicare 
and Medicaid data and/or improving Medicaid managed care plan access 
to Medicare data to improve care coordination for individuals receiving 
HCBS who are dually eligible for Medicare and Medicaid.  
Implementing integrated care models that can more effectively address 
the needs of complex populations. 
 
 
   
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Appendix E: State Example  
 
States may use the state funds equivalent to the amount of federal funds attributable to the 
increased FMAP to cover additional Medicaid-covered HCBS.  If a state chooses to cover 
additional Medicaid-covered HCBS, the state would be able to use the applicable portion of the 
state funds attributable to the increased FMAP as the state share and receive federal financial 
participation (FFP) for the additional HCBS expenditures it incurs.  States that are approved to 
use their initial reinvestment funds for Medicaid-covered services may be eligible for the 
increased FMAP on those initial expenditures once, if the additional expenditures are incurred 
between April 1, 2021, and March 31, 2022.  However, once states have reinvested state funds 
equivalent to the amount of federal funds attributable to the increased FMAP for additional 
Medicaid-covered services listed in Appendix B, states should not claim the increased FMAP 
for subsequent expenditures occurring between April 1, 2021, and March 31, 2022, on Medicaid-
covered HCBS.  This example shows how the state could reinvest the funds in additional 
Medicaid-covered HCBS to receive additional federal match.   
 
State Example 
 
State A has a regular FMAP rate of 70.00%. With the 6.2 percentage point Families First 
Coronavirus Response Act (FFCRA) increase,11 the state has an FMAP rate of 76.2%.  The 10 
percentage point increase under ARP section 9817 is additive to the states FMAP rate and 
results in an enhanced rate of 86.2% for qualified HCBS expenditures between April 1, 2021, 
and March 31, 2022 for State A.12   
 
As shown in Table 1, State A expends $2.5 billion on services that qualify for the temporary 10 
percentage point FMAP increase during the period April 1, 2021, through March 31, 2022, at a 
quarterly rate of $625 million.  At this level of expenditures, the state would be eligible to 
receive $62.5 million in federal funds attributable to the HCBS increased FMAP each quarter, or 
a total of $250 million for expenditures between April 1, 2021, and March 31, 2022.   
 
As shown in Table 2, State A intends to use the initial reinvestment funds for Medicaid-covered 
services listed in Appendix B and to spend an equal portion of the $250 million of state funds 
equivalent to the amount of federal funds attributable to the increased FMAP on an annual basis 
between April 1, 2021, and March 31, 2024; this is equal to $83.33 million for each of these 
periods: April 1, 2021-March 31, 2022, April 1, 2022-March 31, 2023, and April 1, 2023-March 
31, 2024.  If the state used 100% of the initial reinvestment funds for Medicaid-covered services 
listed in Appendix B in each of these periods, this would equate to an additional $603.84 million 
in total computable HCBS expenditures between April 1, 2021, and March 31, 2022 when the 
state is still eligible for the enhanced HCBS FMAP, $277.77 million in total computable HCBS 
                                                           
11 Section 6008 of the FFCRA provides for a temporary 6.2 percentage point FMAP increase to each qualifying state 
and territorys FMAP under section 1905(b) of the Act, effective beginning January 1, 2020 and extending through 
the last day of the calendar quarter in which the public health emergency declared by the Secretary of HHS for 
COVID-19, including any extensions, terminates.     
12 For illustrative purposes only, this scenario assumes that the FFCRA 6.2 percentage point FMAP increase would 
continue to be available through March 31, 2022.  If the public health emergency ends on or before December 31, 
2021, the states FMAP rate in this scenario would decrease by 6.2 percentage points beginning on the date in which 
the FFCRA increase is no longer available to states.  
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.  Page 26  State Medicaid Director 
  
expenditures between April 1, 2022, and March 31, 2023, and $277.77 million in total 
computable HCBS expenditures between April 1, 2023, and March 31, 2024.  
 
Table 1: State Example Showing State and Federal Share and the Funds Attributable to 
the HCBS FMAP Increase  
  Total  Q3 
Q3 FY  Q4 FY  Q1 FY  Q2 FY  FY 2021-Q2 
2021  2021  2022  2022  FY 2022 
$625.00  $625.00  $625.00  $625.00  $2,500.00 
Total computable 
million  million  million  million  million 
$86.25  $86.25  $86.25  $86.25  $345.00 
State share13 
million  million  million  million  million 
Federal share14  $538.75  $538.75  $538.75  $538.75  $2,155.00 
million  million  million  million  million 
Funds attributable to 
$62.50  $62.50  $62.50  $62.50  $250.00 
the HCBS FMAP 
million  million  million  million  million 
increase 
 
Table 2: State Example Showing Reinvestment in Additional Medicaid-Covered HCBS 
Q3 FY 2021- Q3 FY 2022- Q3 FY 2023-
  Q2 FY 2022  Q2 FY 2023  Q2 FY 2024  Total  
$603.84  $277.77  $277.77  $1,159.39 
Total computable15 
million  million  million   million 
State share16  $83.33 million  $83.33 million  $83.33 million  $250.00 million 
$520.51  $194.44  $194.44 
Federal share17  $909.39 million 
million  million  million 
Funds attributable to 
the HCBS FMAP  $60.38 million  $0.00 million  $0.00 million  $60.38 million 
increase 
 
                                                           
13 Assumes the FFCRA increase is available through 3/31/2022. State share is equal to: 13.8% with the HCBS 
enhanced FMAP and the FFCRA increase. 
14 Assumes the FFCRA increase is available through 3/31/2022. Federal share is equal to: 86.2% with the HCBS 
enhanced FMAP and the FFCRA increase. 
15 In order to determine the total computable HCBS expenditures for which a state could claim FFP using, as state 
share, the state funds equivalent to the amount of federal funds attributable to the increased FMAP, divide the 
amount of state funds by 1 minus the states FMAP. In this example, divide $83.33 million by .138 to calculate total 
computable expenditures of $603.84 million for Q3 FY 2021-Q2 FY 2022 and by .300 to calculate total computable 
expenditures of $277.77 million for Q3 FY 2022-Q2 FY 2023 and for Q3 FY 2023-Q2 FY 2024. This amount can 
then be multiplied by the states FMAP rate for the applicable period to determine the amount of additional federal 
dollars the state could claim on those additional expenditures. 
16 Assumes the FFCRA increase is no longer available after 3/31/2022. State share is equal to: 13.8% with the 
HCBS enhanced FMAP and the FFCRA increase; and 30.0% without the HCBS enhanced FMAP and the FFCRA 
increase. 
17 Assumes the FFCRA increase is no longer available after 3/31/2022. Federal share is equal to: 86.2% with the 
HCBS enhanced FMAP and the FFCRA increase; 70.0% without the HCBS enhanced FMAP and the FFCRA 
increase. 
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically 
incorporated into a contract.  This document is intended only to provide clarity to the public regarding existing requirements under the law.