Improving Home- and Community-Based Services

Kentucky offered the first 1915(c) Home- and Community-Based Services (HCBS) waiver program for the elderly and individuals with disabilities in 1987. The Department for Medicaid Services (DMS) now offers six HCBS waiver programs to meet each individual's unique needs. DMS continues to focus on transforming 1915(c) HCBS waiver coverage and enhancing service quality throughout the Commonwealth.

1915(c) HCBS Rate Study

DMS conducted a rate study to comply with Centers for Medicare and Medicaid Services (CMS) rules. The rate study aimed to develop a sound payment and rate-setting methodology necessary to meet federal requirements and make updates to Kentucky's HCBS reimbursement rates.

After careful consideration and deliberation, DMS decided and the General Assembly funded an increase to 70% of the benchmark rates established by the rate study. If the current rate exceeds the 70% threshold, the rate will remain the same. The new rates are contingent upon the submission of amended waiver applications and CMS approval.

Provider Letter: Waiver Reimbursement Rates
Rate Study Summary Final Report

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

Select a category

Children's Waiver Feasibility Study

In 2023, the Cabinet for Health and Family Services (CHFS) studied the need for and feasibility of creating an HCBS waiver for children. The study focused on the possibility of serving children with severe emotional disturbance (SED) and children with intellectual disabilities or related conditions (ID/RC), including children with autism spectrum disorder (ASD). The study explored waivers in other states that offer services to children with SED, ID/RC, or ASD, population data, provider ability to serve an added population and the potential cost of an added waiver.

Guiding Principles for Children's Waiver Feasibility Study

The study was intended to:

Identify ways to improve access to care in the least restrictive setting for children with SED, ID/RC, and ASD who meet the criteria for institutional level of care.
Focus on transparency and inclusion of interested stakeholders to assure gaps in access to services and supports for children with SED, ID/RC, and ASD who meet the criteria for institutional level of care are addressed.
Include cost-neutral recommendations where the Medicaid state plan can offset costs, where participant costs can be set to a level that makes implementation of a new program cost-neutral, and where individuals can transition to programs that best meet their needs.
Recommend specific ways to coordinate and integrate services and supports that currently exist for children with SED, ID/RC, and ASD who meet the criteria for institutional level of care.
Consider new and innovative ideas to address services gaps and racial and health disparities. This includes considering population needs, service models, and program designs independently and not toward existing policy.
Use fact-based and data-driven information to inform recommendations.
Produce a model that includes a quality improvement strategy and oversight plan that is feasible for the state to implement and drives program performance in accordance with state and federal regulations.
Develop a sustainable and realistic plan that considers provider availability, safeguards against fraud, waste, and abuse, and can be implemented in 12 to 24 months.

Getting Involved

CHFS values stakeholder input, particularly from individuals who may be affected by a new program. CHFS hosted focus groups and conducted a family survey in May and June 2023 to collect feedback about the support and service needs of the study population, study findings, and other state models. To stay informed about the study and the focus groups, you can self-subscribe to email updates or email Medicaid Public Comment to be added to the email list.

For questions about the Children's Waiver Feasibility Study, email DMS.

American Rescue Plan Act

Kentucky receives federal money to help pay for its 1915(c) 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, 2025. The approved biennial budget bill for fiscal years 2022-2024 directed DMS to use the funds for rate increases for 1915(c) HCBS providers.

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.