State Variation in Medicaid Home and Community-Based Services (HCBS) Policy Design for Adults with Intellectual and Developmental Disabilities (I/DD)

Background and Purpose: National Medicaid Home and Community-Based Services (HCBS) spending has increased rapidly from $20.5 billion (2000) to $114 billion (2021). Coverage of most Medicaid HCBS is not federally mandated, and there is substantial state discretion and variation in Medicaid HCBS policy design. In 2018, approximately 3.7 million older adults and disabled people received Medicaid HCBS through Medicaid state plans as well as waiver programs, which have lengthy waiting lists in many states. In spite of the significant growth and policy interest in Medicaid HCBS, there is a critical need for multi-state research on the use of Medicaid HCBS and subsequent outcomes. Much of the evidence on Medicaid HCBS focuses on single states or older adults and uses relatively blunt, dichotomous measures of HCBS use (yes/no). In particular, policymakers and practitioners need information about state Medicaid HCBS policy design decisions for adults with intellectual and developmental disabilities (I/DD), who typically experience greater unmet needs and higher intensity of use of HCBS than other user groups.

The objective of this research is to compile a comprehensive dataset of Medicaid HCBS waiver policy design decisions for adults with I/DD: 1) to examine variations in Medicaid HCBS waiver policy design across states; and 2) to develop a novel typology to classify and interpret trade-offs in state Medicaid HCBS waiver policy design based on six policy dimensions.

Methods: We conduct a review of 98 state Medicaid 1115 and 1915(c) HCBS waivers serving adults with I/DD that were operated in fifty states and Washington, DC between 2016 and 2019 through systematic coding and analysis of waiver applications approved by Centers for Medicare and Medicaid Services (CMS), CMS 372 report data, and other publicly available state documents. We also review optional Medicaid state plan HCBS benefits offered by 34 states during this period, since these policies may affect Medicaid HCBS waiver policy design. After using factor analysis to select HCBS policy decisions that best measure each of the six policy dimensions (administration, coverage, eligibility/enrollment, provider regulation, self-direction, and utilization controls), we conduct hierarchical cluster analysis to classify state Medicaid HCBS programs based on similarities in HCBS policy dimensions for adults with I/DD.

Results: Findings indicate that there is significant state-level variation in Medicaid HCBS waiver policy design decisions across all six policy domains. Examples of major differences in policy design include the number and type of Medicaid waivers used by states to serve adults with I/DD, enrollment and waiting list management, HCBS benefits, self-direction of services, and utilization controls, including cost and hour caps. Further, preliminary analysis suggests policy design decisions associated with one policy domain affect policy design decisions in other policy domains.

Conclusions and Implications: Findings highlight important differences in state Medicaid HCBS waiver policy design for adults with I/DD, which affect Medicaid HCBS availability, access, and use and may contribute to disparities in utilization. Follow-on research links this analysis to Medicaid claims to pinpoint policy decisions that make a difference in HCBS utilization and subsequent health outcomes for this priority population.