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​​​​​​​Kentucky receives federal money to help pay for its 1915(c) Home- and Community-Based (HCBS) waiver programs. This money is known as the Federal Medical Assistance Percentage (FMAP).

In spring 2021, the American Rescue Plan Act (ARPA) became federal law. Section 9817 of ARPA gives states a temporary 10 percent increase in federal funding for HCBS. The extra money must be used to cover activities that expand, enhance or strengthen 1915(c) HCBS programs. The funds are one-time, non-recurring and must be used by March 31, 2024

Requirements of ARPA Section 9817

To receive enhanced FMAP funding, states must comply with certain conditions called Maintenance of Effort requirements. Per the Centers for Medicare and Medicaid Services (CMS), 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 in the amount, duration and scope of those services in effect as of April 1, 2021.
  • Maintain HCBS provider payments at a rate no less than those in place as of April 1, 2021.

Before spending enhanced FMAP funds states also must submit a spending plan to CMS for approval. Kentucky submitted its plan in July 2021, received partial approval in September 2021 and conditional approval in February 2022.

The Plan for Improving HCBS

DMS plans to focus on five main areas to strengthen Kentucky HCBS programs.

  • ​Workforce and provider development
    • Create and maintain a central employee registry of pre-screened direct support professionals and participant-directed services employees
    • Offer incentive an​d recovery payments to HCBS provider agencies
  • ​Improve ease of access to HCBS
    • Conduct 1915(c) HCBS Rate Study and review of full HCBS service menu
    • Improve wait list manage​ment
  • ​Crisis services
    • Development of community-based mobile crisis services and support the implementation of 988 crisis response line
  • Tools and transformation
    • ​Conduct study to determine if waivers can be reconfigured or added to serve additional populations
  • ​Project management and administrative support

The list above is a sample of the initiatives included in Kentucky's enhanced FMAP spending plan. Review the full enhanced FMAP spending plan for an overview of all initiatives.

1915(c) HCBS Rate Study

As part of Kentucky's enhanced FMAP spending plan, a new study of 1915(c) HCBS waiver rates is underway. The rate study aims to develop a sound payment and rate-setting methodology necessary to meet federal requirements and make updates to Kentucky's HCBS reimbursement rates. Review the Rate Study Briefing and the first Enhanced Federal Funding for HCBS update for detailed information about the rate study.

Rate Study Work Group

To assist with the rate study, DMS formed a work group of waiver providers, provider association representatives, state agency leaders, advocates and state legislators to provide input throughout the rate study. Recordings of work group meetings and meeting materials are available on-demand. If you have questions about the rate study, please email the DMS Rate Study Work Group.

View Rate Study Work Group Meeting Recordings

Rate Study Work Group Meeting Materials

Getting Involved

DMS is committed to keeping stakeholders informed during implementation of the enhanced FMAP spending plan. To stay informed, you can self-subscribe to updates or email DMS to be added to the email list.

If you have questions about the enhanced FMAP spending plan, you can complete the Enhanced FMAP feedback form or email Medicaid Public Comment.


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