The American Rescue Plan Act of 2021 (ARPA, P.L. 117-2), through a temporary increase in the federal medical assistance percentage (FMAP) of 10 percentage points, provided state Medicaid programs with the largest infusion of one-time federal funding for home- and community-based services (HCBS) in recent history. This funding was intended to support states in providing Medicaid HCBS during the COVID-19 public health emergency by reinvesting it in their HCBS programs. Based on state spending plans submitted to the Centers for Medicare & Medicaid Services, states planned to spend an estimated $37.1 billion in state and federal funds for state-driven HCBS reinvestment activities.
MACPAC monitored state efforts to spend the federal funds and worked to understand state experiences with implementation. Due to tight timeframes, limited staff bandwidth to take on new responsibilities, and other constraints, many states had to modify their original ARPA spending plans. States struggled to spend the funding in the amount of time allotted. CMS approved multiple extensions, some of which are ongoing. States also faced challenges trying to evaluate their investments in real time, which may have affected their ability to justify continuing certain activities following the expiration of federal funding.