CMS Issues Guidance on Money Follows the Person Program; Grant Solicitation to be Issued in Late July

by Rebecca Farley on July 22, 2010

The Centers for Medicare and Medicaid Services has issued a State Medicaid Director Letter providing guidance on how healthcare reform impacts home- and community-based services (HCBS) and the Money Follows the Person (MFP) Rebalancing Demonstration Program. The MFP program is designed to help states shift funding for long term care away from institutional services and into HCBS. Participating states receive enhanced federal funding for qualified services, technical assistance from long-term care experts, and reimbursement for supplemental services that are part of the MFP program but are not typically covered by Medicaid.

The healthcare reform law extends the MFP program by five years, to 2016, and appropriates an additional $2.25 billion for the program. The law also expands the definition of who is eligible to participate in MFP, reducing by half the number of days an individual must have been in an institution in order to qualify for the program. Additionally, the law makes MFP funds available to new states that are not currently participating in the demonstration project. In late July, CMS will issue a grant solicitation to give new states an opportunity to take advantage of the MFP funding. States will have 120 days from the date of the announcement to apply.

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