Money Follows the Person Demonstration Program | CMS 1LI 22 001

Opportunity Information: Apply for CMS 1LI 22 001

The Money Follows the Person (MFP) Demonstration Program is a federal funding opportunity run by the Centers for Medicare and Medicaid Services (CMS) that helps states shift their long-term services and supports (LTSS) systems away from institutional care and toward home and community-based services (HCBS). Created under section 6071 of the Deficit Reduction Act of 2005, the program is meant to help Medicaid-eligible people who are living in institutions transition into community settings, while also giving states flexible resources to build the processes, tools, and infrastructure needed to make community living a realistic and sustainable option. In practice, MFP is both about individual transitions (helping people move and stabilize in the community) and system reform (strengthening the statewide HCBS system so fewer people need institutional placement in the first place).

This specific Notice of Funding Opportunity (NOFO) reflects Congress expanding and extending MFP using the Consolidated Appropriations Act of 2021, which added about $1.253 billion and extended the demonstration through federal fiscal year 2023. Importantly, CMS was also authorized to expand MFP to states and territories that were not already participating. At the time of the NOFO, 34 states (including Washington, DC) were participating, and the expansion is aimed at bringing in additional states and territories that have not previously operated an MFP demonstration.

The award is structured in phases. First is a Planning Phase, expected to start September 1, 2022. During planning, recipients are expected to work with stakeholders and design an MFP demonstration that matches the state or territory's specific LTSS rebalancing goals. This includes mapping out how transitions will work, what services and supports will be available, how the state will coordinate across agencies and providers, and what infrastructure or policy changes are needed to sustain community-based care. Even in this early phase, states can also begin capacity-building initiatives, meaning they can start strengthening the HCBS system (workforce, provider networks, processes, data systems, quality management, partnerships, and similar foundational pieces) during planning and continue those efforts afterward.

Funding for the planning and capacity-building portion is substantial: states can request up to $5 million, with anticipated awards generally between $4 million and $5 million per state. The NOFO notes that funding is available for the year it is awarded plus four additional years, which signals that recipients are expected to use the money not only to design the program but to build long-term capability that lasts beyond initial start-up. The overall funding instrument is a cooperative agreement, which typically means CMS remains actively involved through oversight, technical assistance, and ongoing coordination rather than simply issuing a hands-off grant.

After the Planning Phase, states that meet CMS requirements and receive CMS approval move into the Program Implementation and HCBS Transitions Phase. In that phase, the state implements the demonstration in line with the official MFP Program Terms and Conditions. The NOFO indicates that funds for this later phase are provided through a supplemental award issued no later than September 30, 2023, consistent with the timing rules in the 2021 appropriations law. This second phase is where the work of transitioning individuals and funding their community-based supports scales up.

A key feature of MFP is how the funding supports services during a participant's first year in the community. States can receive cooperative agreement funding tied to qualified HCBS, certain demonstration services, supplemental services, and the administrative and staffing costs needed to run the program. In addition, states receive an enhanced federal medical assistance percentage (enhanced FMAP) for qualified HCBS and MFP demonstration services for each participant during their 365-day enrollment period. That enhanced match is designed to encourage states to invest in community-based alternatives by temporarily increasing the federal share of costs for approved services during the critical first year after someone leaves an institution.

The NOFO also clarifies the types of services MFP can support. "Demonstration services" are optional Medicaid-reimbursable services a state does not currently cover under its Medicaid program, giving states room to test new service options that could improve community stability and outcomes. At the same time, CMS expects states to contribute an equivalent amount of state funding, aligned with the statutory financing rules, to expand or strengthen HCBS and build HCBS infrastructure. "Supplemental services" are another distinct category: they cover transition-related needs that Medicaid normally cannot pay for, such as certain one-time costs like apartment application fees. These supports are meant to remove practical barriers to leaving an institution, but they are not intended to continue beyond the 365-day enrollment period.

From an administrative standpoint, the NOFO emphasizes that capacity building, supplemental services, administrative activities, and personnel costs directly tied to operating the demonstration are fully funded through the cooperative agreement mechanism. That matters because it reduces the financial burden on states when setting up the staffing, operational workflows, transition coordination, and system improvements needed to run MFP effectively. During implementation, states can also continue capacity-building work that started in the planning period, reinforcing that MFP is meant to create lasting improvements in HCBS availability and quality, not just one-time transitions.

Basic opportunity details include: it is a discretionary funding opportunity (not a formula entitlement), offered by the Department of Health and Human Services through CMS, listed under CFDA 93.791, and only state governments are eligible applicants. The opportunity number is CMS-1LI-22-001. The NOFO was created March 31, 2022, with an original application deadline of May 31, 2022. CMS anticipated up to 22 awards, and the award ceiling was set at $5,000,000 per state for the planning and capacity-building component.

• The Department of Health and Human Services, Centers for Medicare Medicaid Services in the health sector is offering a public funding opportunity titled "Money Follows the Person Demonstration Program" and is now available to receive applicants.
• Interested and eligible applicants and submit their applications by referencing the CFDA number(s): 93.791.
• This funding opportunity was created on Mar 31, 2022.
• Applicants must submit their applications by May 31, 2022. (Agency may still review applications by suitable applicants for the remaining/unused allocated funding in 2026.)
• Each selected applicant is eligible to receive up to $5,000,000.00 in funding.
• The number of recipients for this funding is limited to 22 candidate(s).
• Eligible applicants include: State governments.

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