Nearly two months after federal lawmakers approved billions in extra spending on disability services, advocates say the money is going unspent because states don’t know how it can be used.

The funding was part of the $1.9 trillion COVID-19 relief package signed by President Joe Biden in March. The law included $12.67 billion for Medicaid home and community-based services in the form of a 10% rise in the federal government’s share of spending on the program between April 2021 and March 2022.

But more than a month after the funds became available, states remain reluctant to tap the money without guidance from the Centers for Medicare & Medicaid Services. That’s because states must spend Medicaid dollars and then seek reimbursement from the federal government, so advocates say states are worried that they could be on the hook for the extra spending if they misstep and allocate the funds for something outside of what CMS deems an allowable use.

“Whether states wanted to use the money for hazard pay for direct support professionals or to make transitions out of large congregate settings, states aren’t willing to take a risk until they get the guidance from CMS,” said Nicole Jorwic, senior director of public policy at The Arc.

The long-sought funds represent the first major investment in the disability services system since the pandemic began more than a year ago. In that time, disability providers have struggled to stay afloat amid rising costs for personal protective equipment, COVID-19 testing, cleaning supplies and other items while also facing reduced revenues as programs were forced to close or participation declined.

Now that they finally won a slice of federal COVID-19 relief, however, people with disabilities and service providers are continuing to languish.

“There are people all over the country who have been waiting for programs to reopen,” Jorwic said. “They’re going to keep waiting because states need to know how they can use this money and states need to know that they’re going to get reimbursed.”

Complicating matters is that state Medicaid programs may need approvals from their legislatures to make use of the extra dollars.

“Due to the time constraints of state legislative sessions, many self-advocates and providers are having to pressure their states to commit the money to DSP wages, benefits and other essentials while states are simply waiting to hear from CMS,” said Sarah Meek, senior director of legislative affairs at the American Network of Community Options and Resources, or ANCOR, which represents disability service providers across the nation. “There is a lot of worry that the money won’t actually get to people receiving HCBS and their DSPs as Congress intended if CMS guidance is not released soon.”

A CMS spokesperson told Disability Scoop that they agency is working to release guidance “as soon as feasible.”

“We understand how important it is that states receive this guidance as soon as possible, to inform their strategies for investing the increased funding so that beneficiaries with long-term services and supports needs receive the assistance required to live in the setting of their choice,” the spokesperson said. “In the meantime, CMS encourages states to be collaborating with their stakeholders to understand their top priorities for strengthening home and community-based services systems.”

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