CMS’s October 9 guidance says states must annually report the share of certain Medicaid HCBS payments spent on direct-care-worker compensation. The first report is due in 2028, but it measures provider payments from January 1–December 31, 2027; state readiness reports are due July 9, 2027. The rule covers homemaker, home health aide, personal care and habilitation under specified HCBS authorities—not every Medicaid home-health service. Compensation includes wages, overtime, benefits and employer payroll taxes. Required-training costs, mileage or transit subsidies, and PPE are excluded costs.

DomAfina’s take: providers should build the data trail before 2027 begins. Map each covered service to Medicaid revenue, payroll, benefits, paid training and paid travel time; keep mileage reimbursements, PPE and trainer/material costs separate. Reconcile scheduling, EVV, payroll and remittances monthly. States own the report, but CMS says providers and managed-care plans will be key partners.

Source reviewed: CMS: Direct Care Worker Compensation (HCBS Payment Adequacy) Reporting Requirement. The source supports the reported update; the operational recommendations are DomAfina’s analysis.