Home and Community-Based Services American Rescue Plan Act

Home and Community-Based Services (HCBS) are forms of care offered to individuals in a home or community setting rather than in an institution or isolated setting. Typically, HCBS are provided to older adults or individuals with intellectual or developmental disabilities, physical disabilities, and/or mental illnesses. HCBS promotes the health and well-being of individuals with functional limitations while also enabling them to live at home and alongside other community members. 

The American Rescue Plan Act (ARPA), provides increased funding for HCBS through Medicaid to enhance, expand, or strengthen these services. In the face of heightened challenges due to the COVID-19 pandemic, the goal of financial incentives to support HCBS is to promote community living, improve quality of life, and enhance access to services that enable independence, productivity, integration, inclusion, and self-determination for older adults and individuals with disabilities. Section 9817 of ARPA temporarily increases the Federal Medical Assistance Percentage (FMAP) for HCBS by 10 percentage points.

The increased FMAP will be in place from April 1, 2021 to March 31, 2022. The additional federal funds must be used to supplement, not supplant, existing state funds for Medicaid HCBS in effect as of April 1, 2021. States are required to use state funds equivalent to the increased federal funds towards HCBS improvements by March 31, 2024. States also must submit an initial spending plan and narrative, followed by quarterly submissions to demonstrate how the funds will be used or are being used. North Carolina submitted the initial spending plan in July, 2021 and received comments from CMS in September, 2021. 


This page was last modified on 02/16/2024