CurrentcoloradoaccessPolicy SMD# 21-003

Implementation of American Rescue Plan Act of 2021 Section 9817: Additional Support for Medicaid Home and Community-Based Services during the COVID-19 Emergency

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Guidance to states on the temporary 10 percentage point increase to the federal medical assistance percentage (FMAP) for certain Medicaid home and community-based services (HCBS) under Section 9817 of the American Rescue Plan Act (ARP), including program requirements, eligible services, claiming, and reporting obligations for states seeking the increase.

Policy Summary

Payercoloradoaccess

PolicyTemporary 10-percentage-point FMAP increase for Medicaid HCBS under ARP §9817 (guidance to states)

Policy CodePolicy SMD# 21-003

Change TypeTechnical / informational update

Effective DateApr 1, 2021

Next Review Date

Key ActionStates must submit initial and quarterly HCBS spending plans and report eligible expenditures via Form CMS-37 and Form CMS-64 to claim FFP at the increased FMAP.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

Apr 1, 2021–Mar 31, 2022period available

10 percentage pointstemporary increase

95%maximum FMAP

Initial + quarterly reportsreporting

$250Mexample federal funds (State A)

$2.5Bexample qualified expenditures (State A)

Eligibility, Covered Services, and State Reinvestment

Increased FMAP eligibility and conditions

Eligibility and limitations for claiming the increased FMAP

The increased FMAP is only available for expenditures for certain Medicaid HCBS services listed in Appendix B; states may not claim the increase for HCBS expenditures not enumerated in Appendix B (for example, Medicaid administrative activities).

States must use federal funds attributable to the increased FMAP to supplement, not supplant, existing state HCBS funds in effect as of April 1, 2021; to demonstrate compliance, states must spend an equivalent amount of state funds on HCBS-related services and infrastructure to implement or supplement activities that enhance, expand, or strengthen HCBS.

If a state reinvests state funds equivalent to the amount of federal funds attributable to the increased FMAP in additional Medicaid-covered services listed in Appendix B and claims increased FMAP on those initial expenditures, the state should not claim the increased FMAP for subsequent Medicaid-covered HCBS expenditures occurring between April 1, 2021 and March 31, 2022.

CMS will not apply penalties for reductions in HCBS enrollment, utilization, or expenditures that are unrelated to changes in state policies or procedures during the COVID-19 PHE.

States may contact HCBSincreasedFMAP@cms.hhs.gov with questions about services eligible for the increased FMAP and must follow documentation and reporting requirements to isolate increased-FMAP expenditures.

Coverage criteria and claiming rules for increased FMAP

The increased FMAP applies to a defined set of Medicaid HCBS and related services when federal matching would otherwise be paid at the state-specific FMAP; certain expenditures are excluded.

Inclusions: State-plan and waiver HCBS services enumerated in Appendix B (examples include home health, personal care services, private duty nursing provided in the beneficiary's home, case management, rehabilitative services, 1915(c)/(i)/(j)/(k) services, PACE, and other Medicaid-covered HCBS authorized under applicable authorities).

Exclusions: The increase does not apply to Medicaid administrative expenditures (e.g., No Wrong Door system administrative activities), family planning services matched at 90%, services matched at 100% (e.g., certain IHS or Qualifying Individuals programs), health home services under section 1945, or other expenditures not matched at the state FMAP as defined in sections 1905(b)/(ff).

Claiming rules: States obtain federal financial participation for eligible expenditures via Form CMS-37 (budget estimates) and Form CMS-64 (expenditure claiming); the applicable FMAP is determined by date of payment, not date of service; recoveries or overpayments must be reported and returned at the same match rate originally claimed and states must maintain audit trails isolating increased-FMAP expenditures.

Managed care: For managed care expenditures, states should determine the capitation portion attributable to Appendix B services using the data used to develop capitation rates; this methodology is for claiming purposes only, managed care rates must remain actuarially sound, and CMS review or approval may be required.

Retainer payments: Retainer payments are permitted (CMS authorized up to three additional 30-day periods in calendar year 2021 beyond earlier guidance); states should use Appendix K or other program amendment mechanisms as appropriate and must obtain approvals for state-directed payment requirements when mandating managed care plans to make retainer payments under 42 C.F.R. § 438.6(c).

State financial reinvestment guidance

State use of increased FMAP and reinvestment guidance (narrative):

States may use state funds equivalent to federal funds attributable to the increased FMAP to cover additional Medicaid-covered HCBS and, if those additional expenditures are incurred between April 1, 2021 and March 31, 2022 and meet Appendix B criteria, may claim FFP on those initial reinvestment expenditures one additional time.

Once a state has reinvested state funds equivalent to the federal funds attributable to the increased FMAP into additional Medicaid-covered services listed in Appendix B, the state should not claim the increased FMAP for subsequent Medicaid-covered HCBS expenditures occurring between April 1, 2021 and March 31, 2022.

Example (illustrative): A State that expends qualified HCBS services during April 1, 2021–March 31, 2022 may receive federal funds attributable to the 10 percentage point increase; the state may then reinvest state funds equivalent to those federal funds into Medicaid-covered HCBS and claim the increased FMAP on those initial reinvestment expenditures once, subject to the timing and Appendix B limitations.

Allowable HCBS activities

Examples of allowable activities to support HCBS during COVID-19 PHE (non-exhaustive):

Workforce supports: workforce recruitment and incentive payments; workforce training specific to the COVID-19 PHE; activities to expand and retain the direct care workforce and provider capacity building.

Caregiver and assistive supports: supports for family caregivers (including supplies, PPE, and payments), assistive technologies (including internet activation costs), and one-time community transition costs such as security deposits, utility activation fees, and essential household furnishings.

Transition and community integration: transition coordination to facilitate relocation from institutional or congregate settings to community-based residences and one-time services to support community transition and diversion from institutional care.

Behavioral health and rehabilitation: expansions of mental health and substance use disorder services, skill rehabilitation, recruit additional behavioral health providers, increase pay rates, and expand telehealth access.

Outreach, language, and vaccine access: preparation of accessible public health and educational materials; language assistance and interpretation services; supports for vaccine access including appointment scheduling, transportation, in-home vaccination, and direct support for vaccine appointments.

Technology and telehealth: investments in technology and telehealth including equipment, internet connectivity activation, and tele-communications start-up costs to support HCBS recipients' access to services.

Eligible Services, Claiming Lines, and Financial Treatment

Eligible HCBS services referencemixed

Appendix B

Lists eligible HCBS services and corresponding CMS-64 claiming lines for which increased FMAP may be claimed.

CMS-64 claiming lines for HCBSmixed

Line 19A	Home and Community-Based Services - Regular Payment (Waiver)
Line 19B	Home and Community-Based Services - State Plan 1915(i) Only Payment
Line 19C	Home and Community-Based Services - State Plan 1915(j) Only Payment
Line 19D	Home and Community Based Services State Plan (1915(k) CFC)

Financial treatment guidance (narrative)mixed

States may use state funds equivalent to federal funds attributable to the increased FMAP to cover additional Medicaid-covered HCBS and claim FFP for those expenditures if incurred between April 1, 2021 and March 31, 2022 and meet Appendix B criteria.

FMAP cap

Maximum FMAP after increaseIn no case may the FMAP determined for a state be more than 95% for HCBS expenditures receiving the ARP increase.

ScopeApplies to qualifying HCBS expenditures under ARP §9817 and is subject to Appendix A/B applicability rules.

Territories payment treatmentPayments to Puerto Rico, the Virgin Islands, Guam, Northern Mariana Islands, and American Samoa must not be used when applying section 1108 payment limits.

FMAP applicability by payment date

FMAP applicability ruleThe applicable FMAP is determined based on the date of payment, not the date of service for current quarter original expenditures.

Prior period adjustmentsThe FMAP applicable to prior period adjustments should be the FMAP at which the original expenditure was claimed.

Recoveries and overpaymentsStates must report recoveries and overpayments at the same match rate at which the expenditures were originally claimed and return recoveries of FFP at that same rate.

Example expenditure and attributable federal funds (State A)

Example period and expendituresState A expended $2.5 billion on qualified HCBS between April 1, 2021 and March 31, 2022 (quarterly $625 million).

Federal funds attributable to HCBS FMAP increaseAt $2.5 billion qualified expenditures, State A would receive $250.00 million in federal funds attributable to the 10-percentage-point FMAP increase for the period.

Quarterly funds attributableState A would receive $62.5 million per quarter attributable to the FMAP increase (four quarters total = $250 million).

State Reporting, Managed Care, and Allowable Provider Supports

Documentation Required

Submit initial + quarterly HCBS spending plans; follow CMS‑37/CMS‑64 claiming

States must submit an initial HCBS spending plan and narrative and then quarterly HCBS spending plans and narratives to CMS; obtain FFP at the increased FMAP through the Form CMS‑37 (budget estimates) and Form CMS‑64 (allowable expenditures) via MBES/CBES, and document expenditures and report collections/overpayments at the same match rate as originally claimed. Failure to follow these steps may lead CMS to defer or disallow expenditures.

Submit initial spending plan and narrative (within 30 days of guidance release) and quarterly updates until funds are expended; CMS will review for compliance.
Obtain FFP through Form CMS‑37 for budget estimates and Form CMS‑64 for allowable expenditures in MBES/CBES.
Maintain audit trails isolating increased‑FMAP matched expenditures and report recoveries/overpayments at the same match rate originally claimed.

Billing Rule

Report eligible managed care expenditures on Form CMS‑64; isolate Appendix B portion

Report expenditures eligible for the 10‑percentage‑point increased FMAP on the Form CMS‑64; for managed care, determine the capitation portion attributable only to Appendix B services using the data used to develop capitation rates — this methodology is for claiming purposes and may require CMS review/approval.

Report eligible expenditures on CMS‑64 using MBES/CBES once updated to reflect increased FMAP.
Calculate the managed care capitation portion tied to Appendix B services using rate‑development data; submit methodology to CMS if required.

Prior Authorization

Obtain 42 C.F.R. § 438.6(c) approval before directing retainer payments in managed care

If a state seeks to require managed care plans to make retainer payments, obtain approval as a state‑directed payment under 42 C.F.R. § 438.6(c) and authorize retainer payments under appropriate Medicaid authority (e.g., 1915(c), 1115, 1915(i)/(k)); submit the state‑directed payment preprint to effectuate contractual requirements with managed care plans.

Authorize retainer payments under an appropriate Medicaid authority (1915(c), 1115, 1915(i)/(k)).
Seek CMS approval under 42 C.F.R. § 438.6(c) for state‑directed payments and submit the state‑directed payment preprint.
Contact CMS statedirectedpayment@cms.hhs.gov for technical assistance.

Documentation Required

Allowable HCBS support activities (examples): workforce, caregiver, assistive tech, vaccine supports

Permissible HCBS support activities include workforce recruitment and incentives, workforce training, caregiver supports, assistive technologies (including internet activation costs), one‑time community transition costs, and vaccination supports for individuals receiving HCBS.

Workforce recruitment and incentive payments; workforce training specific to the COVID‑19 PHE.
Supports for family caregivers (supplies, PPE, payments).
Assistive technologies and supports, including internet activation costs to support use of technologies.
One‑time community transition costs (security deposits, utility activation, essential furnishings).
Vaccination supports for HCBS recipients (scheduling, transportation, in‑home vaccination, direct support).

Documentation Required

HCBS capacity building activities (examples): systems, assessments, quality, provider networks, tech

States may fund HCBS capacity‑building activities such as no‑wrong‑door systems, standardized assessments, quality improvement, provider network development, eligibility streamlining, institutional diversion and community transition supports, provider capacity building, data integration, and expanded technology/telehealth including start‑up and connectivity costs.

No‑wrong‑door systems and standardized assessments; strengthening PASRR and preadmission screening.
Quality improvement, provider training, and provider network development to expand and retain the direct care workforce.
Eligibility streamlining, institutional diversion, and community transition services (one‑time transition supports).
Data integration and system improvements (claims/encounter data, EHR interoperability).
Expanded technology and telehealth investments, including equipment and internet activation/start‑up costs.

Documentation Required

Behavioral health, outreach, and vaccine access activities (examples)

Behavioral health and outreach activities eligible for funding include recruiting additional behavioral health providers, increasing pay rates, expanding telehealth, and preparing accessible outreach and public health materials; vaccine access supports may include appointment scheduling, transportation, in‑home vaccination, and direct support for vaccine appointments.

Recruit additional behavioral health providers and implement new behavioral health services; increase pay rates for behavioral health providers.
Expand access to telehealth for mental health and SUD services and related rehabilitation.
Prepare outreach and public health/educational materials in accessible formats and provide language assistance (ASL and interpretation).
Support vaccine access: scheduling appointments, transportation to sites, direct support for appointments, and in‑home vaccination options.

Key Terms

Increased FMAP

Statutory basisIncreased FMAP provided under section 9817 of the American Rescue Plan Act (ARP).

Temporary increase amountProvides a temporary 10 percentage point increase to the federal medical assistance percentage for qualifying HCBS expenditures.

Effective periodAvailable for expenditures incurred between April 1, 2021 and March 31, 2022, subject to Appendix applicability rules.

Supplement/Not Supplant

Core requirementFederal funds attributable to the increased FMAP must be used to supplement, not supplant, existing state Medicaid HCBS funds in effect as of April 1, 2021.

State reinvestment obligationStates must use state funds equivalent to the federal funds attributable to the increased FMAP to implement or supplement activities that enhance, expand, or strengthen HCBS.

Demonstration and complianceStates must document spending and are required to submit spending plans and narratives for CMS review to demonstrate compliance with the supplement, not supplant requirement.

Temporary 10-percentage-point increase in FMAP under ARP §9817

Increase amount and capTemporary 10-percentage-point FMAP increase under ARP §9817, not to exceed 95% for any state or territory.

Additive treatmentThe ARP increase is additive to other temporary FMAP increases (e.g., FFCRA) where applicable, subject to the 95% cap.

ApplicabilityApplies to allowable Medicaid HCBS expenditures for which federal matching is ordinarily paid at the state-specific FMAP defined in section 1905(b) or 1905(ff).

Retainer payments

DefinitionRetainer payments allow providers to continue to bill for enrolled HCBS individuals when circumstances prevent service delivery (e.g., temporary service suspension).

Authorized episodesCMS previously authorized up to three 30-day episodes of retainer payments; CMS is authorizing states to offer up to three additional 30-day periods in calendar year 2021.

Implementation guidanceStates should implement additional retainer payment days via Appendix K, disaster relief state plan amendment, Attachment K for 1115, or relevant waiver/amendment; June 30, 2020 FAQs guardrails continue to apply.

HCBS capacity building

PurposeHCBS capacity building activities support long-term services and supports (LTSS) rebalancing and strengthening community-based services.

Example activitiesActivities include provider network development, no-wrong-door systems, standardized assessments, quality improvement, caregiver training and respite, and expanded technology/telehealth (including start-up/connectivity costs).

Spending period for state fundsStates may expend state funds equivalent to federal funds attributable to the increased FMAP through March 31, 2024 to support capacity-building and related activities.

Enhanced FMAP

Enhanced FMAP exampleFor a state with a regular FMAP of 70% and a 6.2 percentage point FFCRA increase, the ARP 10-point increase yields an enhanced FMAP of 86.2% for qualified HCBS expenditures between April 1, 2021 and March 31, 2022.

Additive increasesThe ARP increase is additive to FFCRA and other specified FMAP increases where applicable, subject to statutory limits and the 95% cap.

Use with claiming systemsMBES/CBES systems are being modified to reflect each state's increased FMAP to enable accurate claiming of enhanced rates.

Policy Summary

Payercoloradoaccess

PolicyTemporary 10-percentage-point FMAP increase for Medicaid HCBS under ARP §9817 (guidance to states)

Policy CodePolicy SMD# 21-003

Change TypeTechnical / informational update

Effective DateApr 1, 2021

Next Review Date

Key ActionStates must submit initial and quarterly HCBS spending plans and report eligible expenditures via Form CMS-37 and Form CMS-64 to claim FFP at the increased FMAP.

SourceLink

On This Page

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Implementation of American Rescue Plan Act of 2021 Section 9817: Additional Support for Medicaid Home and Community-Based Services during the COVID-19 Emergency

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Eligibility, Covered Services, and State Reinvestment

Increased FMAP eligibility and conditions

Eligibility and limitations for claiming the increased FMAP

CMS will not apply penalties for reductions in HCBS enrollment, utilization, or expenditures that are unrelated to changes in state policies or procedures during the COVID-19 PHE.

Coverage criteria and claiming rules for increased FMAP

The increased FMAP applies to a defined set of Medicaid HCBS and related services when federal matching would otherwise be paid at the state-specific FMAP; certain expenditures are excluded.

State financial reinvestment guidance

State use of increased FMAP and reinvestment guidance (narrative):

Allowable HCBS activities

Examples of allowable activities to support HCBS during COVID-19 PHE (non-exhaustive):

Eligible Services, Claiming Lines, and Financial Treatment

Eligible HCBS services referencemixed

Appendix B

Lists eligible HCBS services and corresponding CMS-64 claiming lines for which increased FMAP may be claimed.

CMS-64 claiming lines for HCBSmixed

Line 19A	Home and Community-Based Services - Regular Payment (Waiver)
Line 19B	Home and Community-Based Services - State Plan 1915(i) Only Payment
Line 19C	Home and Community-Based Services - State Plan 1915(j) Only Payment
Line 19D	Home and Community Based Services State Plan (1915(k) CFC)

Financial treatment guidance (narrative)mixed

FMAP cap

Maximum FMAP after increaseIn no case may the FMAP determined for a state be more than 95% for HCBS expenditures receiving the ARP increase.

ScopeApplies to qualifying HCBS expenditures under ARP §9817 and is subject to Appendix A/B applicability rules.

Territories payment treatmentPayments to Puerto Rico, the Virgin Islands, Guam, Northern Mariana Islands, and American Samoa must not be used when applying section 1108 payment limits.

FMAP applicability by payment date

FMAP applicability ruleThe applicable FMAP is determined based on the date of payment, not the date of service for current quarter original expenditures.

Prior period adjustmentsThe FMAP applicable to prior period adjustments should be the FMAP at which the original expenditure was claimed.

Recoveries and overpaymentsStates must report recoveries and overpayments at the same match rate at which the expenditures were originally claimed and return recoveries of FFP at that same rate.

Example expenditure and attributable federal funds (State A)

Example period and expendituresState A expended $2.5 billion on qualified HCBS between April 1, 2021 and March 31, 2022 (quarterly $625 million).

Quarterly funds attributableState A would receive $62.5 million per quarter attributable to the FMAP increase (four quarters total = $250 million).

State Reporting, Managed Care, and Allowable Provider Supports

Documentation Required

Submit initial + quarterly HCBS spending plans; follow CMS‑37/CMS‑64 claiming

Submit initial spending plan and narrative (within 30 days of guidance release) and quarterly updates until funds are expended; CMS will review for compliance.
Obtain FFP through Form CMS‑37 for budget estimates and Form CMS‑64 for allowable expenditures in MBES/CBES.
Maintain audit trails isolating increased‑FMAP matched expenditures and report recoveries/overpayments at the same match rate originally claimed.

Billing Rule

Report eligible managed care expenditures on Form CMS‑64; isolate Appendix B portion

Report eligible expenditures on CMS‑64 using MBES/CBES once updated to reflect increased FMAP.
Calculate the managed care capitation portion tied to Appendix B services using rate‑development data; submit methodology to CMS if required.

Prior Authorization

Obtain 42 C.F.R. § 438.6(c) approval before directing retainer payments in managed care

Authorize retainer payments under an appropriate Medicaid authority (1915(c), 1115, 1915(i)/(k)).
Seek CMS approval under 42 C.F.R. § 438.6(c) for state‑directed payments and submit the state‑directed payment preprint.
Contact CMS statedirectedpayment@cms.hhs.gov for technical assistance.

Documentation Required

Allowable HCBS support activities (examples): workforce, caregiver, assistive tech, vaccine supports

Workforce recruitment and incentive payments; workforce training specific to the COVID‑19 PHE.
Supports for family caregivers (supplies, PPE, payments).
Assistive technologies and supports, including internet activation costs to support use of technologies.
One‑time community transition costs (security deposits, utility activation, essential furnishings).
Vaccination supports for HCBS recipients (scheduling, transportation, in‑home vaccination, direct support).

Documentation Required

HCBS capacity building activities (examples): systems, assessments, quality, provider networks, tech

No‑wrong‑door systems and standardized assessments; strengthening PASRR and preadmission screening.
Quality improvement, provider training, and provider network development to expand and retain the direct care workforce.
Eligibility streamlining, institutional diversion, and community transition services (one‑time transition supports).
Data integration and system improvements (claims/encounter data, EHR interoperability).
Expanded technology and telehealth investments, including equipment and internet activation/start‑up costs.

Documentation Required

Behavioral health, outreach, and vaccine access activities (examples)

Recruit additional behavioral health providers and implement new behavioral health services; increase pay rates for behavioral health providers.
Expand access to telehealth for mental health and SUD services and related rehabilitation.
Prepare outreach and public health/educational materials in accessible formats and provide language assistance (ASL and interpretation).
Support vaccine access: scheduling appointments, transportation to sites, direct support for appointments, and in‑home vaccination options.

Key Terms

Increased FMAP

Statutory basisIncreased FMAP provided under section 9817 of the American Rescue Plan Act (ARP).

Temporary increase amountProvides a temporary 10 percentage point increase to the federal medical assistance percentage for qualifying HCBS expenditures.

Effective periodAvailable for expenditures incurred between April 1, 2021 and March 31, 2022, subject to Appendix applicability rules.

Supplement/Not Supplant

Core requirementFederal funds attributable to the increased FMAP must be used to supplement, not supplant, existing state Medicaid HCBS funds in effect as of April 1, 2021.

Temporary 10-percentage-point increase in FMAP under ARP §9817

Increase amount and capTemporary 10-percentage-point FMAP increase under ARP §9817, not to exceed 95% for any state or territory.

Additive treatmentThe ARP increase is additive to other temporary FMAP increases (e.g., FFCRA) where applicable, subject to the 95% cap.

ApplicabilityApplies to allowable Medicaid HCBS expenditures for which federal matching is ordinarily paid at the state-specific FMAP defined in section 1905(b) or 1905(ff).

Retainer payments

DefinitionRetainer payments allow providers to continue to bill for enrolled HCBS individuals when circumstances prevent service delivery (e.g., temporary service suspension).

Authorized episodesCMS previously authorized up to three 30-day episodes of retainer payments; CMS is authorizing states to offer up to three additional 30-day periods in calendar year 2021.

HCBS capacity building

PurposeHCBS capacity building activities support long-term services and supports (LTSS) rebalancing and strengthening community-based services.

Spending period for state fundsStates may expend state funds equivalent to federal funds attributable to the increased FMAP through March 31, 2024 to support capacity-building and related activities.

Enhanced FMAP

Additive increasesThe ARP increase is additive to FFCRA and other specified FMAP increases where applicable, subject to statutory limits and the 95% cap.

Use with claiming systemsMBES/CBES systems are being modified to reflect each state's increased FMAP to enable accurate claiming of enhanced rates.