Medicaid home- and community-based services (HCBS) are designed to allow people with long-term services and supports needs to live in their homes or a home-like setting in the community. Medicaid is the nation’s largest payer of HCBS for individuals with intellectual or developmental disabilities (I/DD), older adults, and individuals with physical disabilities. In calendar year 2021, Medicaid programs nationwide spent $82.5 billion on HCBS and served more than 2.5 million HCBS users.
States have significant flexibility in HCBS program design, and may implement a variety of payment types in their diverse HCBS offerings within and across programs. Despite these flexibilities, states must adhere to established, broad federal standards for rate-setting.