Money Follows the Person Rebalancing Demonstration

The Money Follows the Person (MFP) Rebalancing Demonstration, authorized by section 6071 of the Deficit Reduction Act of 2005 (P.L. 109-171), was designed to assist States to balance their long-term services and supports systems and help Medicaid enrollees transition from institutions to the community. Congress initially authorized up to $1.75 billion in Federal funds through Fiscal Year (FFY) 2011. With the subsequent passage of the Patient Protection and Affordable Care Act (P.L. 111-148) in 2010, section 2403 extended the program through September 30, 2016. An additional $2.25 billion in Federal funds was appropriated through FFY 2016. Since then, section 2 of the Medicaid Extenders Act of 2019 (P.L. 116-3) added $112 million in Federal funds and changed the end date for the program from September 30, 2016 to September 30, 2021. Section 5 of the Medicaid Services Investment and Accountability Act of 2019 (P.L. 116-16) changed the additional funding appropriated through the Medicaid Extenders Act from $112 million to $132 million and section 4 of the Sustaining Excellence in Medicaid Act of 2019 (P.L 116-39) changed the additional funding appropriated through the Medicaid Services Investment and Accountability Act from $132 million to $254.5 million. Section 205 of the Further Consolidated Appropriations Act, 2020 (P.L. 116-94) and section 3811 of the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) provided an additional $337.5 million. Section 2301 of the Continuing Appropriations Act, 2021 and Other Extensions Act (P.L. 116-159) added $66.4 million, section 1107 of the Further Continuing Appropriations Act, 2021, and other Extensions Act (P.L. 116-215) added $6.5 million. Section 204 of the Consolidated Appropriations Act, 2021 (P.L. 116-260) added $1.253 billion, extended and made changes to the program. The Consolidated Appropriations Act, 2023 (P.L.117-328) added $1.8 billion and extended the program through September 30, 2027. . As required by the Consolidated Appropriations Act, 2023, grant funds appropriated for each fiscal year must be awarded by the end of the following fiscal year. Funds awarded to MFP grant recipients are available for the fiscal year in which they are awarded plus four additional fiscal years. Any portion of a grant award that is unexpended by the state at the end of the fourth succeeding fiscal year shall be rescinded and added to the appropriation for the fifth succeeding fiscal year.

The MFP Demonstration supports State efforts to rebalance their long-term services and supports system so that individuals have a choice of where they live and receive services. MFP program goals are (1) increase the use of home and community-based services (HCBS) and reduce the use of institutionally-based services; (2) eliminate barriers in State law, State Medicaid plans, and State budgets that restrict the use of Medicaid funds to let people get long-term services and supports in the settings of their choice; (3) strengthen the ability of Medicaid programs to provide HCBS to people who choose to transition out of institutions; and (4) put procedures in place to provide quality assurance and improvement of HCBS. The demonstration provides for an enhanced Federal Medical Assistance Percentage (FMAP) for 12 months for qualified home and community-based services for each person transitioned from an institution to the community during the demonstration period. Eligibility for transition is dependent upon residence in a qualified institution for more than 60 consecutive days. The State must continue to provide community-based services after the 12-month period for as long as the person needs community-based services and is Medicaid eligible. Under the demonstration, the State must propose a system of Medicaid home and community-based care that will be sustained after the demonstration period and is deemed qualified by the Secretary. Specifically, the program must be conducted in conjunction with a "qualified HCBS program" which is a program that is in operation (or approved) in the State for such individuals in a manner that assures continuity of Medicaid coverage of services in the qualified HCBS program for eligible individuals. States may also propose to enhance the services they will provide during the demonstration period to achieve greater success with transition. States are required to participate in a national qualitative and quantitative evaluation conducted by CMS. Data collected on a national level helps evaluate the core objectives of the statute.

Applicants for this Demonstration Grant must be any single State Medicaid Agency, State Mental Health Agency, or instrumentality of the State. Only one application can be submitted for a given State. By "State" we refer to the definition provided under 45 CFR 74.2 as "any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State exclusive of local governments." By "territory or possession", we mean Guam, the U. S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.

An independent review of all applications submitted in response to the FY 2022 NOFO was conducted by a panel of experts including CMS and other Federal agencies. The review panel assessed each application to determine the merits of the proposal and the extent to which it furthers the purposes of the demonstration program. The panel evaluated each application for further review by CMS. CMS reserved the right to request that States revise or otherwise modify certain sections of their proposals based on the recommendations of the panel and the budget. A low score in one or two areas, even if offset by high scores in other areas, could have resulted in a rejection of the proposal. Final approval of demonstration projects was made by the Administrator of CMS after consideration of the comments and recommendations of the review panelists, program office recommendations, and the availability of funds. CMS reserved the right to approve or deny any or all proposals for funding.

Successful applicants received a Financial Assistance Award (FAA) signed and dated by the CMS Grants Management Officer. The FAA is the document authorizing the grant award and is sent through the U.S. Postal Service to the applicant organization as listed on its SF 424. Any communication between CMS and applicants prior to issuance of the FAA is not an authorization to begin performance of a project. Unsuccessful applicants are notified by letter, sent through the U.S. Postal Service to the applicant organization as listed on its SF 424.