HD81 - Assessment of Reimbursement Rates for Medicaid Home and Community-Based Services


Executive Summary:
The 2005 Appropriation Act directed JLARC to report on the adequacy of Medicaid reimbursement rates for home and community-based care services and the impact of reimbursement levels on access to care for the Medicaid recipient population. This study was based on concerns among providers and recipients of home and community-based services that Medicaid reimbursement rates for these services are too low and may result in inadequate access to care for eligible recipients.

It appears that concerns about the negative effects of reimbursement rates on access in certain regions of the State are not warranted. Data do not support concerns over reduced access to services in rural localities or in the Southwestern and Southside regions of the State. Further, in recent years more providers have entered the market than have left it.

However, there is evidence to support providers’ concerns that rates are low. Rates are not routinely adjusted for inflation, Virginia’s rates are lower than in other states, and current rates do not appear to enable providers of some services to pay direct care staff either a competitive or living wage. Based on this evidence, options are included in this report for how rates could be adjusted.

A number of issues regarding the rate structure for services provided to individuals with mental retardation and developmental disabilities also warrant additional review. First, it appears appropriate to provide a Northern Virginia rate adjustment for services provided to people with mental retardation and developmental disabilities, which would be consistent with how most other home and community-based services are reimbursed. Also, there is a need to review the rate structure for services provided for these individuals in a group setting.