Medicaid Home-Based and Community-Based Services Long-Term Care Expenditures: Evaluation of the Balancing Incentive...

The Balancing Incentive Program (BIP), legislated in the 2010 Affordable Care Act, offered states financial incentives to increase access to Medicaid home-based and community-based services (HCBS). Despite the major infrastructure changes required by BIP, no evaluation to date has quantified the increase in spending attributable to BIP, which is of concern to Medicaid HCBS policymakers, providers, and consumers. This is the first causal estimate of BIP's effects, including the timing of implementation in each state, compared with a counterfactual.

Using state-level expenditure data, we estimated the change in HCBS spending as a percentage of long-term services and supports (LTSS) spending in 17 BIP participant states compared with a counterfactual or synthetic control calculated as a weighted average of the outcome in 17 BIP eligible, nonparticipant states. Synthetic control weights were estimated using pre-BIP characteristics. To assess how BIP effects evolved over time, we estimated cumulative change in the outcome in multiple post-BIP years (2013, 2016, and 2019).

Our primary analysis indicates that cumulatively from FY 2013 to 2019, BIP states increased their HCBS spending as a percentage of LTSS spending by an average of 5.2 percentage points (95% CI: 0.0, 9.8), compared with the synthetic control.

Although many state-run programs have sought to increase HCBS access, our study's causal estimate of BIP effects in 17 states, compared with 17 states that did not, represents a more substantial growth than findings of prior studies.