MACPAC Summary, Part 2

Alliance Daily | Dec. 18, 2024

On Friday, commissioners addressed several other HCBS-specific items. One session, ‘HCBS Spending and Utilization,’ focused on HCBS spending and utilization by demographic characteristics, taxonomy categories, and long-term services and supports (LTSS) subpopulations. This analysis examined data spanning 2019 to 2021 from the Transformed Medicaid Statistical Information System (T-MSIS), providing an update to MACPAC’s 2017 HCBS claims analysis. Key takeaways include:

  • HCBS Utilization Trends: In 2021, Medicaid spending on HCBS ($82 billion) surpassed institutional care spending ($68 billion), continuing a trend since 2013. While the number of HCBS users grew by 15.4% between 2019 and 2021, institutional LTSS users declined by 17.5%.
  • Spending and Subpopulation Considerations: Beneficiaries with intellectual or developmental disabilities (I/DD) or autism-spectrum disorder (ASD) accounted for the largest share of HCBS expenditures at 52.1%, followed by those with mental illness, serious emotional disturbance (SED), or substance use disorder (SUD) at 47.4%. Older adults represented the second-largest HCBS user group, with a notable emphasis on round-the-clock services.
  • Demographic Characteristics: Relative to the general Medicaid population, HCBS users were older and predominantly white, non-Hispanic. However, racial disparities were highlighted, particularly among beneficiaries with HIV/AIDS, where the majority identified as Black, non-Hispanic. HCBS users were more likely to be dually eligible for Medicare and Medicaid, with older adults having the largest share of full benefit dually eligible beneficiaries.
  • Service Categories: The most frequently utilized HCBS taxonomy category was round-the-clock services, which also represented the largest expenditure share (44.6%). Case management services, while widely used, accounted for a smaller proportion of total HCBS spending (2.2%).

Commissioners expressed appreciation for the report, noting it will be helpful to inform further analysis. Commissioners also raised questions about low case management spending despite higher utilization, and expressed interest in further examining mental illness, SED, and SUD subpopulations to better understand types of care being delivered and any disparities in access. Commissioners recommended including state-level data in future analyses to highlight disparities in HCBS service availability. No formal vote was taken, and MACPAC staff indicated its plan to develop an issue brief with high-level findings and use the new dataset to inform future analyses and publications.

Another session, ‘Medicaid Payment Policies to Support the Home- and Community-Based Services (HCBS) Workforce,’ addressed findings from a Technical Expert Panel (TEP) on Medicaid payment policies aimed at supporting the HCBS workforce. This session built upon prior MACPAC work, including a 2023 compendium on HCBS payment practices. Key topics of discussion included workforce challenges, payment rate-setting practices, and the role of policy in addressing workforce adequacy and sustainability. Key findings include:

  • HCBS Workforce Overview: The HCBS workforce encompasses 3.6 million workers, including direct care workers, direct support professionals, and independent providers. Workforce shortages are reported across all states and have been exacerbated by the COVID-19 pandemic. HCBS workers often face cost pressures and challenging working conditions, contributing to recruitment and retention issues.
  • Payment Rate Challenges: HCBS rate development varies by state and service type, relying on components like wages, transportation costs, and administrative expenses. States face challenges in updating these rates, as HCBS rate reviews are only mandated for Section 1915(c) waivers. Even when conducted, rate studies may not lead to implementation due to budget constraints. Tools such as indexing and rebasing provide alternative mechanisms for adjusting rates but may lock in outdated methodologies.
  • Workforce Strategies: States have employed training programs, public campaigns, and family caregiver incentives to bolster workforce capacity. Many of these strategies have been supported by American Rescue Plan Act (ARPA) funds, which are set to expire in March 2025.
  • Rate Alignment and Data Standardization: Significant variation exists in HCBS payment rates across states and delivery models, leading to workforce migration toward higher-paying settings. Comprehensive service definitions and wage data are important to ensure equitable and consistent rate-setting. The 2024 Medicaid access rule introduces public reporting requirements for HCBS worker compensation, but its long-term impact remains unclear.

Commissioners collectively noted the complexity of addressing HCBS workforce challenges, highlighting the lack of consistent wage data and clear service definitions. Further, there was an emphasis on the need to transform HCBS work into a sustainable, middle-class career, potentially through expanded benefits, career advancement opportunities, with public investment, while others considered the need for innovative solutions, such as assistive technology and expanded scope of practice to address workforce challenges. One Commissioner encouraged leveraging the expertise of federal agencies, such as the Department of Labor or Department of Treasury, to complement Medicaid’s efforts in addressing workforce issues. No formal vote was taken, and MACPAC plans to monitor ongoing trends and explore potential policy options in future meetings.

Further information about the sessions and slides from the presentations are available HERE.