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States have until 2022 to meet Medicaid standards of care


The Trump administration has given states three extra years to carry out plans for helping elderly and disabled people receive Medicaid services without being pushed into nursing homes.

Federal standards requiring states to find ways of delivering care to Medicaid enrollees in home and community settings will take effect in 2022 instead of 2019, the Centers for Medicare & Medicaid Services announced earlier this month. The standards date to an Obama administration rule adopted in 2014 that governs where more than 3 million Medicaid enrollees get care.

Among other things, the rule requires states to provide opportunities for enrollees to engage in community life, control their own money and seek employment in competitive settings. It also ensures that enrollees in group homes and other residential settings get more privacy and housing choices that include places where non-disabled people live.

Matt Salo, executive director of the National Association of Medicaid Directors, applauded the delay.

“We have long been on record saying that the regulation was hopelessly unrealistic in its time frame,” he said. “Delaying it actually helps consumers because the underlying regulation was going to push too many changes too fast into a system that wasn’t ready.”

In California, a lot of work is still needed to bring the state into compliance, said Eric Carlson, a directing attorney at Justice in Aging, a nonprofit advocacy organization.

“The state is going to have to pick up the pace to meet the even more relaxed deadlines,” said Carlson, who is based in Los Angeles. “Even the current timeline doesn’t give us much margin for error.”

California health officials said they appreciated the extra time. “The additional three years will allow time for the state to work with settings to come into compliance, or relocate members if compliance is not achievable,” Anthony Cava, spokesman for the state Department of Health Care Services, said in an email.

The health care services department has already developed a survey for home- and community-based providers and started working with other departments throughout the state. The department plans to begin assessing care sites by this fall — work that could last into 2019 because of the “extremely large and diverse number of settings,” Cava said.

Overall, Cava said, implementing the regulation has created unforeseen challenges. Among the biggest: funding.

“Some settings may need to make significant changes to come into compliance, but there is no additional federal funding provided for such changes,” Cava said.

The Obama administration’s 2014 rule was an effort to create a federal standard to improve the quality of care that the disabled receive outside institutions.

Some states had tried — and struggled — to make changes on their own, partly due to a lack of funding and the political difficulties of changing deeply entrenched relationships with providers.

Some, for instance, had required providers to change longstanding operations at group homes and so-called sheltered workshops, such as Goodwill Industries, where disabled people often work apart from other employees, performing menial tasks for less than minimum wage.

The delay in implementing the federal rule is “a victory for the status quo and for states reluctant to embrace the [new standards],” said Gary Blumenthal, CEO of the Association of Developmental Disabilities Providers. Helping disabled people find work in places where they are not segregated costs states more money, he said.

States spent several years fighting the new rules during the Obama administration, and that delayed their planning, said Elizabeth Priaulx, senior legal specialist with the National Disability Rights Network. She noted that states were under pressure from nursing homes and for-profit group homes to resist the changes.

“It is unfortunate the delay had to occur,” but many states were not ready, she said.

The new rule also directs states and providers to reconfigure existing community settings such as group homes to ensure that people will have more privacy. “Without these dollars it’s difficult to change the system,” Blumenthal said.

Funds already shifting

In 2014, for the first time, state Medicaid programs spent more on long-term care in home and community-based settings than on nursing homes. But there was great variation among the states: Mississippi spent about 25 percent of its long-term care dollars on home and community care while Oregon and other states spent nearly 80 percent.

Camille Dobson, deputy executive director of the National Association of States United for Aging and Disability, said the extra time is important for states worried about losing federal funding if they don’t meet the new standards.

“It was very likely that most of the states would not have been in compliance by March 2019 and so CMS would [have been] faced with taking money away from programs that help people stay in their homes rather than go to nursing facilities,” Dobson said.

The administration’s delay announcement came less than a week after the House passed the American Health Care Act, which would take $880 billion out of the Medicaid program over ten years. The move was expected after Health and Human Services Secretary Tom Price in March invited states to apply for waivers from federal Medicaid rules that he said were too onerous to help improve the program.

So far, Tennessee is the only state that has received final approval from CMS for its implementation plan. States still face a 2019 deadline for approval of their implementation plans.

Kathy Carmody, CEO of the Chicago, Illinois-based Institute on Public Policy for People with Disabilities, said there is concern the Trump administration may not just delay the rule’s implementation but eventually eliminate it altogether.

“We are disappointed,” she said, noting that Illinois ranks last or near last on several measures of care for people receiving home and community-based services. That includes having about half of its disabled Medicaid enrollees in residential care settings with seven or eight other disabled people and less than 6 percent of its disabled enrollees in competitive employment, she said.

“We were really hoping the rule would be a push from the federal government to help us evolve into the 21st century and get out of the mid-1980s where we are stuck,” Carmody said.

Carlson, of Justice in Aging, said the implementation of the rule will help ensure California’s Medicaid beneficiaries have “real access to the community and that they are not improperly limited to the four walls of the assisted-living facility or group home or day center.”

KHN reporter Anna Gorman contributed to this report.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.