Cost effectiveness of home and community-based care

Medicaid section 2176 waivers allow States to provide home and community-based care to Medicaid eligibles who, but for these services, would enter Medicaid-funded nursing homes. One of the conditions required by Congress for granting these waivers is that this substitution results in no additional Medicaid spending (budget neutrality). The results of case studies of two of these waiver programs, one in California and one in Georgia, are presented in this article. The case studies contain a description of the operation of these programs in some detail. Next, the data and techniques needed to assess the ability of these programs to achieve budget neutrality are presented, and the performance of these programs along this dimension is evaluated.