Changes to the Money Follows the Person Program Announced

The Centers for Medicare & Medicaid Services (CMS) recently announced changes to the Money Follows the Person (MFP) Program, adding new language to requirements around administrative activities and additional uses of MFP funding.

The new language introduces a soft cap on administrative costs, indicating that “CMS generally expects administrative costs to account for 15% or less of the recipient’s MFP demonstration expenditures.” The language makes clear that CMS will consider approving administrative costs that exceed 15%, but may require additional justification for these expenditures. CMS also emphasizes that “Administrative funding does not cover the costs associated with rendering services to MFP participants, including transition coordination services, housing-related services, and community transition services.”

CMS has also added specificity to the requirement that states must “describe administrative activities to expand and enhance the state’s HCBS system” in their operational protocol (OP). When requesting these funds, states must now “document that the activities:  

• Add to or enhance, rather than replace or supplant, existing state functions or obligations;  

• Are time-limited and not perpetually funding state operations;  

• Support expansion and enhancement of the state’s HCBS system;  

• Demonstrate a clear relationship to the MFP demonstration; and   

• Support the administrative and/or service objectives and activity(s) described in the OP.”  

CMS also emphasizes that such requests “must be approved by CMS prior to the execution of the activity as well as annually through the annual supplemental budget process.”

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