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The Balancing Incentive Program, like the Money Follows the Person Rebalancing Demonstration, is designed to help states shift the balance of Medicaid LTSS by increasing opportunities for people to receive care in the community rather than in an institution.

The Balancing Incentive Program, authorized by Section 10202 of the Affordable Care Act, was established for states that in federal fiscal year 2009 were spending more on institutional care than they were on community-based LTSS. In exchange for additional federal funds, Balancing Incentive Program states must implement several structural changes to their LTSS systems and reach the “balancing benchmark” where community-based LTSS account for at least 50 percent of total LTSS spending (or 25 percent for Mississippi) by September 30, 2015.

The report examines the progress Balancing Incentive Program states have made in increasing the share of their LTSS dollars spent on community-based services one year before the program end date. It contains an analysis of expenditure trends in participating states, including an exploration of trends in the use of specific service types in states that have been more successful in increasing the community-based share of LTSS expenditures. It also presents state perspectives on the factors that most contributed to their success in increasing the community-based share of LTSS spending, with a focus on the contributions of the Balancing Incentive Program.