Tell Congress to stop the Medicaid HCBS 80/20 pass through!

In the Medicaid Access Rule CMS finalized a requirement that no less than 80% of all Medicaid payments, including but not limited to base payments and supplemental payments, be spent on compensation to direct care workers, for homemaker services, home health aide services, and personal care services. This requirement applies to services delivered under sections 1915(c), (i), (j), (k), and potentially also 1115 of the Social Security Act as well as those delivered through managed care contracts. Notably, it would not apply to 1905(a) State plan personal care and home health services.

The rule defines "compensation" narrowly as:

• Salary and wages;
• Benefits (such as health and dental benefits, paid leave, and tuition reimbursement);
• The employer share of payroll taxes for direct care workers; and
• Other remuneration as defined by the Fair Labor Standards Act

Importantly, the rule's definition neglects to include other crucial costs necessary to provide services.

There are significant negative outcomes that would occur if the 80-20 provision is finalized, including:

• This provision will reduce, not increase, access. Individuals who rely on HCBS to live their lives in home-based settings will lose services, particularly if providers cannot meet these new requirements or are forced to restrict innovative, value-added care supports.
• The provision appears to have been arbitrarily created and not based on data or an explained rationale.
• The restrictive threshold definitions will serve to limit resources for caregiver support and other enhanced care-focused operations, resulting in reduced quality, health and safety, and oversight in HCBS.
• The blanket approach undermines state autonomy, creates stark inequities across and within states, limits the ability to modify program requirements, and penalizes providers and states that have more regulation and oversight.
• The provision seeks to establish precedent that CMS/HHS has the authority to dictate how state Medicaid dollars are spent by private entities.
• CMS imposes this mandate with no existing or planned infrastructure for collecting and reporting out accurate information, financing to support added resource needs, or data to ensure that the dollars are being distributed as intended.