A Health Affairs article authored, in part, by Marc Cohen and Jane Tavares of the LeadingAge LTSS Center at UMass Boston, discusses the impact of reductions in Federal Medicaid reimbursements to states.

“When states have faced budgetary pressures in the past, they respond by cutting Medicaid eligibility, benefits, and provider payments. These cuts affect all facets of the Medicaid program, particularly home and community-based services (HCBS) programs,” the authors write in the April 16 piece.

Following a brief overview of Medicaid spending, and states’ obligations–including the fact that,  states must pay for nursing home care, but they do not have to pay for HCBS–the authors discuss states’ response during the fiscal crisis of 2008.

Congress shored up state budgets providing increased federal participation (via enhanced Federal Medical Assistance Percentage or FMAP) though 2010, though when these subsidies dried up, 47 states spent less per person on HCBS, and 40 states served less people.

The article explores the tenuous relationship between states and HCBS payment rates, noting rates are already too low to sustain the industry. Providers are exiting the market despite high demand, and the rates are inadequate to provide quality wages to workforce leading to challenges in hiring enough staff to meet demand.

Authors contend Medicaid cuts by congress will cause states to make changes to HCBS programs including reductions in services available or numbers of people served. States could even see a growth in nursing facility utilization as decreases in HCBS offerings don’t mean less people need services.

Read the article here.