News & Perspectives

The American Rescue Plan Act of 2021: Reinvesting in HCBS, Rehabilitative Services, TCM, Home Health, & Personal Care Services


The COVID-19 pandemic has made providing Medicaid services more challenging for human services agencies. For example, agencies are working hard to serve communities when physical locations are often required to close temporarily. During the pandemic, homes of service recipients can be significantly isolating as well, and individuals often need to move their residence to another location where others are available to accompany and care for them.  

As a response to these challenges and many others, the American Rescue Plan Act of 2021 (ARP), signed into law on March 11, 2021, provides relief to Medicaid home and community-based services (HCBS) programs with scheduled, enhanced federal financing participation to offset state expenditures. The ARP definition of HCBS also includes a host of other Medicaid services and programs that are typically referenced by the Centers for Medicare and Medicaid Services (CMS). The ARP definition appears to broadly include Medicaid rehabilitative services, targeted case management (TCM), home health, and personal care services, which are utilized by many Medicaid participants who are not typically viewed as part of HCBS populations.1

The main focus of the ARP is to provide additional federal funding for these services through a ten percent increase to the federal medical assistance percentage (FMAP) applied to Medicaid HCBS expenditures from April 1, 2021 to March 31, 2022. The FMAP increase may be added to other FMAP increases, including enhanced FMAP for the Families First Coronavirus Response Act, except that FMAP may not exceed 95 percent for any state.

Based on Congressional Budget Office (CBO) estimates, the enhanced FMAP could increase federal funding for Medicaid by $12.7 billion. State savings resulting from the FMAP increase must be reinvested in HCBS services and programs.2

As the ARP defines HCBS programs broadly and includes services covered under HCBS waivers as well as both mandatory and optional state plan services in areas including but not limited to child welfare, early childhood, education, juvenile justice, and public health, Public Consulting Group (PCG) has compiled relevant information to help agencies navigate the legislation that can be found here. Our firm offers expertise on Medicaid home and community-based services (HCBS); ARP enhanced federal HCBS funding; reinvestment of HCBS state savings; and more. PCG’s extensive experience with similar federal requirements is also an asset to agencies.

Founded in 1986, PCG is a leading public sector solutions implementation and operations improvement firm that partners with health, education, and human services agencies to improve lives. The firm helps state, county, and municipal human services agencies respond to change, enhance operations, improve access to services, optimize processes and compliance, and achieve their performance goals in order to better serve populations in need. To learn more, visit



1 American Rescue Plan Act of 2021, s 9817, Additional Support for Medicaid Home and Community Based Services During the COVID-19 Emergency
(31 March 2021)
2 American Rescue Plan Act of 2021, s 9817, Additional Support for Medicaid Home and Community Based Services During the COVID-19 Emergency
(31 March 2021)