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How States Can Use One-Year HCBS Funding Bump to Expand Crisis Systems

How States Can Use One-Year HCBS Funding Bump to Expand Crisis Systems

Stephanie Hepburn is a writer in New Orleans. She is the editor in chief of #CrisisTalk. You can reach her at .​

The American Rescue Plan Act, commonly called the Covid-19 stimulus package or by its acronym, ARPA, is giving states an opportunity to increase people’s access to Medicaid home- and community-based services, including behavioral health. Section 9817 of the act provides a one-year increase in federal funding that became available on April 1 and will end on March 31, 2022.

The provision increases the Medicaid federal medical assistance percentage by 10 points, up to 95 percent, for spending on HCBS, says Tom Betlach, former director of Arizona’s Medicaid program, the Arizona Health Care Cost Containment System. For example, Arizona’s current federal match rate is 76.21%. With the enhanced rate, the federal government would pay 86.21% of the cost. To take advantage of the enhanced match, states have to submit their HCBS spending plans. Initially, states were supposed to submit plans by June 12 but could apply for a 30-day extension, making today the deadline. However, experts indicate CMS might be open to allowing a little more time if states request it. States can use the funds through March 31, 2024.

“This is big news for states working to build out their behavioral health crisis systems in anticipation of 988,” says Betlach. Telecom companies must make the three-digit number for mental health, substance use, and suicide emergencies available by July 16, 2022. According to CMS’ May 13 letter to state Medicaid directors, states can put the savings toward services that help people remain in the community by expanding service delivery capacity. This includes home healthcare, personal care services, self-directed personal care services, case management, school-based services, and rehabilitation services.

The rescue plan builds on the CARES Act and aims to speed up the nation’s economic and health recovery from the effects of the pandemic. President Joe Biden signed the $1.9 trillion economic stimulus package into law on March 11. 

Throughout the Covid pandemic, people in congregate living facilities were particularly vulnerable to the virus. As a result, home- and community-based services became increasingly vital, allowing people to access care while keeping them in the community and out of emergency departments, hospitals, and nursing facilities. Community-based services, including crisis services, also allowed providers to keep their doors open during physical distancing mandates. Emergency Medicaid HCBS approvals permitted states to deliver some services remotely like evaluations, assessments, person-centered planning, and continued care.

While increasingly recognized, home- and community-based services aren’t new; they became available in 1983 as a Medicaid waiver. In 2005, HCBS also became a state plan option. Most states are operating at least one HCBS waiver. However, Betlach points out that what’s considered a home- and community-based service has shifted over the years. “HCBS spending has grown considerably as an alternative to nursing facility placements, which, historically, was all that Medicaid would pay for,” he says. Over time, states realized that providing services in the community was better for people and more cost-effective. 

“Today, Medicaid spends more on home- and community-based services than it does on nursing facility services. ARPA takes HCBS even further by including some behavioral health services in the definition.”

How these services developed, though, notes Betlach, has resulted in a quality and infrastructure patchwork that lacks standardization and varies from state to state. Much like 911 telecommunicators, the HCBS workforce often faces high-demand jobs that are low-pay and haven’t benefited from professionalization. “Congress included these services,” he says, “to foster accountability, safety, and quality, but also to improve pay.” There are currently companion bills on the table in the Senate and House to expand access to HCBS under title XIX of the Social Security Act and improve workforce pay and benefits. They would also extend the HCBS 10% federal medical assistance percentage bump by 10 years.

In Arizona, a broad array of behavioral health Medicaid service codes fall under home- and community-based services, including screening and evaluations, group and family therapy/counseling, living skills training, health promotion, supported employment, family support, and peer support services. What doesn’t fall under the codes is mobile crisis services or 23-hour crisis stabilization. 

Betlach points out that even if a state doesn’t bill Medicaid for crisis services under HCBS codes, it can still use the money generated by the federal match bump to expand its behavioral healthcare crisis system. “States can use those dollars,” he says, “to build out any part of the crisis system.” In fact, CMS guidance stipulates that states enhance, expand, or strengthen home- and community-based services beyond what they had in place as of April 1.

Some states have started to release their HCBS spending plans. For example, Massachusetts will focus on three areas: building and keeping a high-quality workforce, access to and promotion of services and supports, and technology and infrastructure to improve access, coordination, and delivery. The state’s Executive Office of Health and Human Services highlights the aim is for people to be served in the most appropriate and least restrictive settings, calling HCBS “an essential component of the care continuum.”

In June, California revealed its $5.2 billion spending plan to expand its home- and community-based services. The plan includes 35 HCBS program initiatives and allocates $75 million in enhanced federal funds toward Mental Health First Aid for Schools and a back-to-school toolkit. The California Health and Human Services Agency states that students have missed out on socialization and developmental opportunities during the Covid pandemic, noting that this has been particularly detrimental for children and teens. 

The agency’s sentiments echo what #CrisisTalk has heard from experts across the nation, including Dr. Anitra Warrior in Nebraska, Andrea Rifkind in Maryland, and Emily Moser and Dwight Holton in Oregon. They all noted that without in-person school, there were fewer opportunities to identify behavioral health needs. McKinsey’s Center for Societal Benefit through Healthcare found that children experienced the largest decrease in behavioral health services use during the pandemic. 

California’s mental health education and toolkit initiative will facilitate early intervention and help schools support students who experience a crisis or mental health challenge as they return to the classroom for the 2021-22 school year.

Betlach points out that the enhanced HCBS funding provides an investment opportunity for states to home in on their crisis system gaps. For example, Arizona has a strong infrastructure for adults that focuses on four core elements recommended in SAMHSA’s National Guidelines for Behavioral Health Crisis Care: regional or statewide crisis call centers that coordinate in real-time, centrally deployed 24/7 mobile crisis, 23-hour crisis receiving and stabilization programs, and essential crisis care principles and practices. “That’s not yet true for kids,” he says. “In Arizona, we could take a portion of the funding, perhaps $50 million, to build a children’s crisis infrastructure statewide.” That could include specialized mobile crisis teams to go out and support families with children experiencing a crisis and youth-focused crisis stabilization centers.

Other states, he notes, might want to use the funding to develop a data infrastructure and expand crisis services. Massachusetts is doing just that. Earlier this year, the state released a behavioral health reform roadmap. The plan includes a “front door to treatment,” a centralized system for people to call and text, and community-based alternatives to the emergency department, including 24/7 community and mobile crisis intervention services. The enhanced federal match, roughly $500 million, will help fund the roadmap. 

While some states tangentially discuss funding crisis services, Indiana’s proposed HCBS spending plan directly invests in behavioral health crisis care and 988 implementation. In the plan, the Indiana Family and Social Services Administration wrote that the state “is interested in developing a robust crisis system predicated on the Crisis Now model,” including the core crisis elements described in SAMHSA’s previously mentioned guidelines. 

As states examine how best to direct their funding, Betlach suggests they consider creating a single entity responsible for their crisis system. For instance, in each of Arizona’s three regions, there’s a single Medicaid plan accountable for establishing a crisis system and supporting a person in crisis for the first 24 hours. “That carries the person through all three stages—from a call to the call center, a mobile crisis team response, and a 23-hour stay at a stabilization unit,” he says. That’s typically three separate providers. However, in Arizona, providers can bill the health plan in that region. In Maricopa County, that’s Mercy Care. “The state provides crisis funding to the Managed Care Organization in the region, giving them a certain dollar amount per member per month.” That number is multiplied by the population in that region on Medicaid, giving a monthly influx of funding to support the crisis infrastructure. “These funds,” says Betlach, “are braided with non-Medicaid dollars to support all Arizonans.”

Arizona has a per member, per month capitation for crisis services for adults and another for children and adolescents. Betlach says this highlights to MCOs the importance of a robust crisis system and gives them essential resources to provide communities with the care they need.

“As states prepare for 988,” says Betlach, “it’s essential they figure out who’s coordinating and responsible for a crisis system.” “That’s what ensures there are available resources and providers in place to deliver them.”