Already facing nearly $1 trillion in federal Medicaid cuts, disability advocates are now worried that new efforts to crack down on fraud and trim state budgets will erode access to home and community-based services.
Lawmakers in several states including Idaho, Missouri, Maryland, Colorado, Utah and Washington are weighing proposals to chop funding for services that support people with disabilities living in the community. They are citing financial pressure as states brace for the impact of the One Big Beautiful Bill Act, which Republicans pushed through Congress last summer. The law is expected to drastically cut spending on Medicaid over the next decade.
At the same time, the Trump administration is targeting Medicaid as part of a broader effort to weed out fraud. President Donald Trump established a task force this month to “combat widespread fraud, waste, and abuse in federal benefit programs.” Prior to that, the Centers for Medicare and Medicaid Services threatened to withhold $2 billion in Medicaid funds from Minnesota and the agency has opened fraud investigations into a handful of other states.
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Collectively, advocates say the actions put funding for home and community-based services that people with disabilities rely on at risk.
“Home and community-based services are facing a convergence of pressures that threatens to erase years of progress and force more people with disabilities and older adults into institutional settings,” said Kim Musheno, senior director of Medicaid policy at The Arc of the United States. “Unprecedented federal threats to HCBS under the guise of fraud, waste and abuse, combined with the historic Medicaid cuts … and rising demand for services, pose an existential threat to an already fragile developmental disability services system.”
Advocates are particularly concerned that CMS has insinuated that growth in the community-based services program is a reason to suspect fraud. Rather, they say, increased enrollment should be viewed as a positive.
“The growth in HCBS is a result of decades of bipartisan federal and state efforts to ‘rebalance’ funding from institutional care to community-based care,” said Alison Barkoff, a health law and policy professor at George Washington University who previously led the government’s Administration for Community Living. “The administration’s blunt enforcement approach — like freezing and withholding funds to programs instead of working with states to identify and prosecute individuals committing fraud — will hurt the very people that CMS is claiming that it is protecting.”
Worries about Medicaid cuts are further exacerbating an already challenging landscape for disability services. A nationwide survey of community-based providers of intellectual and developmental disabilities services released late last year showed that almost all had experienced moderate or severe staffing shortages in the previous year. As a result, 62% of providers turned away new referrals and 52% said they were considering program cuts.
“Many providers of home and community-based IDD services are small, nonprofit organizations that lack the cash flow to sustain even short payment suspensions,” said Lydia Dawson, vice president of government relations at the American Network of Community Options and Resources, or ANCOR, which represents disability service providers nationally. ANCOR conducted the provider survey last year.
“The system of community-based services for people with I/DD is already in an incredibly fragile state,” she said. “These challenges stand to get much worse if we see service payment freezes or further reductions in funding for any reason.”
At a recent hearing of the U.S. House Committee on Energy and Commerce on combatting Medicare and Medicaid fraud, Kim Brandt, deputy administrator and chief operating officer at CMS, told lawmakers that her agency is using artificial intelligence tools and other means to take a proactive approach to addressing Medicaid fraud.
“CMS remains committed to strengthening oversight and using every tool available to safeguard these programs. Crushing fraud is not simply about recovering funds after the fact. It’s about preventing harm, preserving trust and ensuring that these programs remain strong for current and future generations,” Brandt said.
In a letter to leaders in Congress, however, representatives of nearly 200 disability and aging organizations argued that targeted audits, data-driven oversight and other steps they said would address fraud are being sidelined. The groups noted that community-based care is less expensive than institutions, but without reliable support for Medicaid, the consequences for people with disabilities could be severe.
“More funding, not less, is needed for care,” reads the letter from the Disability and Aging Collaborative and the Consortium for Constituents with Disabilities. “Access to Medicaid HCBS is a matter of life, death and independence for millions of Americans with disabilities, older adults, and their families and loved ones.”
