After passage of the American Rescue Plan Act (ARPA) in March of this year, many state Medicaid agencies breathed a sigh of relief over the availability of new funding to support home- and community-based services (HCBS). These services help people who have disabilities and live at home or in community residences. The devastating toll of COVID-19 on people who live in long-term care institutions and need help with daily living activities has led to an increased demand for HCBS. Yet just when those services were most needed, unsafe working conditions, low wages, and social distancing requirements reduced the ability of providers to meet the demand.
This year, ARPA offers states the opportunity to invest in activities that “enhance, expand, or strengthen HCBS beyond what is available under the Medicaid program as of April 1, 2021.” It does so by increasing federal matching funds by 10 percent from April 1, 2021 through March 31, 2022, if states agree to “supplement and not supplant” existing state funds spent on Medicaid HCBS. The Congressional Budget Office estimates that ARPA will make up to $12.7 billion in federal funds available for HCBS. The amount each state receives will vary, from about $19.8 million in Wyoming to nearly $2.7 billion in California.
After ARPA was signed into law, nearly every state published a plan that describes how it will use the new funds to support HCBS. An early look at states’ preliminary plans as of July 2021 found most states planned to increase payment rates for HCBS providers and strengthen the HCBS workforce through enhancing recruitment, retention, and training for direct care workers. Some states are also planning to expand services, enhance eligibility and enrollment, invest in technology for providers and state agencies, improve quality, fund capital and structural improvements, or enhance administrative capacity.
However, only half of the states plan to monitor and evaluate the impact of new spending on their chosen initiatives. Our team reviewed eight final ARPA spending plans, of which only two specified developing performance measures or dashboards, collecting data for monitoring and evaluation, or securing an evaluation partner to assess the effectiveness of HCBS changes.
It is possible states neglected to consider such activities because they were not included in the Centers for Medicare and Medicaid Services’ (CMS’s) guidance to states. But without dedicating funds and time to plan and conduct evaluations of the effectiveness of these investments, states will not be able to determine if the extra funds strengthened the HCBS system. They might also lack the data and insight needed to inform future policy choices. How will the federal government and states know which policies provide the best return on investment if Congress authorizes 15 times more funding, as proposed in the budget reconciliation package now under consideration? For example, how will they know whether raising the wages of home care aides by a dollar per hour increases the number of direct care workers, thus improving care and making it more universally accessible?
A recent U.S. Government Accountability Office report argues that typical state reporting on HCBS quality “may not provide useful information for evaluating how temporary changes [during 2020] affected access to HCBS.” The report continues, “without a full evaluation [of changes to HCBS made in the wake of COVID-19], CMS may miss opportunities to better prepare for future emergencies.” This issue also applies to additional tranches of federal funding for HCBS (for example, a bill currently under debate that would partially sustain ARPA funding, among other programs).
So how might CMS and states design their monitoring and evaluation plans for new HCBS investments? They should start by identifying objectives, measures that can be used to assess whether objectives are met, the data required to construct measures, and analytic methods that can assess proposed interventions. Potential evaluation methods range from simple time trends shown in a dashboard to more complex comparative approaches that use years of data and advanced statistical techniques.
Going back to our example above, suppose a state plans to increase payment rates for certain HCBS providers, in order to maintain or increase the number of providers over several years. The state could monitor and evaluate this policy by counting the number of providers before, during, and after the intervention, either in absolute numbers or full-time equivalent positions. Next, to examine turnover, it could collect data on duration of employment. It could then compare these measures to those of other providers that did not get payment increases during the same period. The state also could use claims or encounter data to monitor the volume of services provided before, during, and after the intervention, and compare it with the change in volume of services among providers that did not receive a rate increase.
Measure and evaluation approaches will vary with state objectives. There is no CMS-recommended set of HCBS performance and quality measures, but the measures in this CMS 2020 request for information could offer a starting point. Guidance for section 1115 demonstration evaluations—on general design principles, implementation research, comparison group selection, and causal inference—can also be used to design rigorous evaluations. Skilled evaluation partners can help states craft an approach to monitoring and evaluation that fits their goals and budget.
In the short term, the significant infusion of federal funds for HCBS offers states a valuable opportunity to expand access and build the direct care workforce. A thoughtful monitoring and evaluation strategy will ensure lessons about what worked to achieve these goals will have a lasting impact.