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Over the course of the last several decades, numerous federal incentives, legislative amendments, and new Medicaid coverage authorities have been enacted and implemented to support states with rebalancing LTSS systems. States have leveraged these opportunities to pursue both incremental and, for some states, comprehensive strategies to rebalance their LTSS systems.

Over the past 40 years, a number of legislative and policy changes have worked to significantly increase the use and quality of HCBS (Figure I.2).

Figure I: Timeline of Selected LTSS Rebalancing Legislative and Program Actions

Major changes to HCBS include the following:

• When Medicaid first offered the option of providing personal care services (PCS) in 1975, services were limited in scope and had a medical orientation. Over the course of the last 40 years, regulatory changes broadened the scope of PCS to allow for services to be rendered in an individual’s home and community.

Key Legislative and Program Milestones in LTSS Rebalancing

• 1981 – Section 1915(c) Waivers:
  The Social Security Act was amended to authorize the Secretary of Health and Human Services under section 1915(c) to waive certain Medicaid requirements. This allowed states to provide home- and community-based services (HCBS) to individuals who would otherwise require institutional care, including adults with physical disabilities, individuals with HIV/AIDS, children with various disabling conditions, and individuals with serious mental illness.
  
  

• 1987 – Omnibus Budget Reconciliation Act (OBRA):
  Required state Medicaid programs to implement Pre-Admission Screening and Resident Review (PASRR). This process ensures that all applicants to and residents of Medicaid-certified nursing facilities are screened for mental illness and intellectual disability, and receive specialized services as needed while in the facility.
  
  

• 1990 – Americans with Disabilities Act (ADA):
  Established the nation’s goals for individuals with disabilities: ensuring equality of opportunity, full participation, independent living, and economic self-sufficiency.
  
  

• 1999 – Olmstead v. L.C., 527 U.S. 581:
  The Supreme Court ruled that Title II of the ADA prohibits unjustified segregation of individuals with disabilities. Public entities must provide community-based services when:

  • Such services are appropriate;

  • The individual does not oppose community-based treatment; and

  • Community-based services can be reasonably accommodated given the entity’s resources and the needs of others receiving services.
    
    

• 2005 – Deficit Reduction Act (DRA):
  Created new opportunities for states to advance LTSS rebalancing, including:

  • Section 1915(i): Allows states to offer HCBS to individuals needing less than institutional-level care who meet specified needs-based criteria, including those not eligible under 1915(c) waivers.

  • Section 1915(j): Built on the Cash & Counseling demonstration, allowing participants to self-direct state plan personal care services or select 1915(c) waiver services without an 1115 demonstration project.

  • Money Follows the Person (MFP) Rebalancing Demonstration: Built on the foundation of Real Choice Systems Change grants to help states reduce reliance on institutional care and expand community-based long-term care opportunities for individuals transitioning from institutions to the community.

• 2010 – Patient Protection and Affordable Care Act (PPACA):
  Introduced additional provisions to support HCBS rebalancing:

  • Section 1915(k) – Community First Choice: Offers increased federal matching funds for statewide home- and community-based attendant services and transition supports.

  • Extended MFP, enhanced the 1915(i) state plan benefit, and established the Balancing Incentive Program, providing financial incentives for states to increase access to noninstitutional LTSS.
    
    

• 2014 – CMS HCBS Regulations:
  Final regulations were issued for sections 1915(c), 1915(i), and 1915(k) to ensure that HCBS are truly home- and community-based. Key requirements include:

  • Services must promote community integration.

  • Coverage must be based on person-centered service plans that reflect how individuals wish to exercise choice.

  • Criteria define both residential and non-residential home- and community-based settings.
    
    

• 2017 – CMS “Meaningful Measures” Initiative:
  Launched to identify high-priority areas for quality measurement and improvement. The initiative aims to enhance outcomes for individuals, families, and providers while reducing administrative burden on clinicians and service providers.