How the One Big Beautiful Bill Will Reshape Waiver Billing: A CPA’s Impact Analysis

The One Big Beautiful Bill implemented new standards and changes in most industries, including the healthcare industry. While the middle class received a variety of tax deductions and breaks, Medicaid took the brunt of the cuts. 

Certain provisions of waiver billing were added, including the introduction of a new category of Home and Community-Based Services (HCBS). At the same time, cuts were made to Section 1115, restricting the use of demonstration waivers until the state is budget-neutral. 

In this article, we'll explore these changes and their likely impact on your business, helping you take a proactive approach to planning and positioning your business for success in the next few years. 

The One Big Beautiful Bill made important revisions to waivers under Section 1915(c) and 1115. First, the One Big Beautiful Bill created a new category of HCBS waivers under Section 1915(c). People who do not meet the existing requirement of needing institutional-level care can apply to access funding as long as their program does not increase the average HCBS wait times. 

The goal is to allow a greater number of individuals with less severe needs to access HCBS programs. To account for expanded enrollment, funding is set at $50 million in FY2026 and $100 million in FY2028. This new category of HCBS waivers will go into effect on July 1, 2028. 

Another important provision in the One Big Beautiful Bill was adjustments to Section 1115. Medicaid demonstration waivers are being restricted until the state is budget-neutral, which is determined by the Centers for Medicare and Medicaid Services (CMS) Actuary. These waivers give states the ability to test new approaches that are different from what is required by federal statute. This provision starts on January 1, 2027, with $5,000,000 in funding being allocated in FY2026 and FY2027. 

Over the last few years, Medicaid has been expanding. For one, many states implemented reimbursement rate increases for certain services, like nursing care and mental health services. In fact, 47 states reported rate increases in FY2024. Prior to the One Big Beautiful Bill, states did not need approval from CMS. 

This will no longer be the case starting in 2027. First, approval and funding for Medicaid demonstration waivers will now flow through CMS. This can restrict the state's ability to approve and fund new initiatives. While HCBS funding is also expected to increase in 2028, states will be more careful with the programs they approve. 

Going into the next few years, businesses should not anticipate reimbursement rate increases. Most states will begin a thorough review of their reimbursement allocation to prepare for the restrictions that take effect in 2027. The reimbursement timeline is also expected to extend. This means that your business will need to have buffer strategies to manage longer lag periods between reimbursements. 

The Medicaid reimbursement process already went through a document requirement overhaul over the past few years. HCBS businesses needed to collect detailed information during the healthcare service interaction to submit a complete reimbursement claim, including the type of service provided, patient information, provider information, the location of the service, and the amount paid by the plan to the provider. 

Similarly, HCBS businesses needed to implement electronic visit verification (EVV) under the 21st Century Cures Act. The goal of EVV was to improve the quality of care, reduce fraud, and enhance efficiency. Companies could comply with EVV requirements by using a mobile app with GPS, landline telephones, biometric recognition, or fixed devices. 

Following the passage of the One Big Beautiful Bill, the administrative burden of claims and documentation will likely increase. As more HCBS providers are fighting for funding and states are being cautious with how their budget is allocated, having the proper protocols in place will be paramount. HCBS businesses should focus on overhauling workflows now to be prepared, including adopting more granular coding, prioritizing timely claim submission, and ensuring all documentation is complete and compliant. 

While improving your claims and documentation is great, it's also important to rework your accounting framework. States will become more detailed about the billing codes and funding buckets they use. This means that your chart of accounts should be updated to reflect these changes. 

For example, if your state is authorizing workforce stabilization payments, your chart of accounts should have a dedicated category for that class of revenue. Keeping everything separated and organized will be crucial in the event of an audit or inquiry. 

Moreover, layered funding streams, such as payments from multiple federal and state programs, can get confusing. Have a detailed recording procedure to follow to keep information consistent. This can take more time when going through your accounting records, but it will be important to prevent any hiccups or delays in reimbursements following an inquiry. 

While reimbursement rates might be stagnant or restricted, the One Big Beautiful Bill does look to expand workforce participation. Provisions, like tax-free overtime and tips, are meant to lower 

The tax burden for the middle class and make it more attractive to work. Similarly, cuts to Medicaid also include a work requirement. 

Access to new talent can be great; however, this also means that you need to have heightened verification requirements. If you don't already have a rigid onboarding process, now is the time to create your "guide." This might include background checks, drug tests, and detailed training schedules. One of the primary goals of Medicaid alterations under the One Big Beautiful Bill was to increase service quality and reduce wait times. This makes it essential that your HCBS hires the right talent. 

With stricter reimbursement requirements, the U.S. Department of Justice is cracking down on fraud. Just recently, the Department of Justice released the results of its 2025 National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants across the United States. The Department of Justice is working closely with State Attorneys General's Offices and the Centers for Medicare and Medicaid Services to reduce fraudulent claims. 

Reduced funding and increased reimbursement requirements will create stricter audit triggers. If your HCBS submits high-dollar claims or requests reimbursement in programs with low funding levels, expect to have inquiries. Any misstep in documentation could result in penalties. For example, penalties already exist in some places for documentation lapses and EVV non-adherence. Over the next few years, states will likely rework their penalty and fine structures to enforce compliance. 

While your HCBS may already have overhauled processes to comply with EVV requirements, there may be future changes in the pipeline. The CMS and your state may implement new data-reporting standards. This could be real-time feeds, analytics dashboards, or more specific requirements for claims and documentation. 

Medicaid reimbursors want to track the data of your visits. For example, if their data shows it should only take an average of 15 minutes to give a patient a shower, but your documentation constantly shows 45 minutes, your state or CMS may inquire about why it's taking so long. 

Over the next few years, be prepared to make investments in automation to reduce manual claim edits and denial rates. While it's still uncertain what type of technology will be required, there will likely be some changes that come with an upfront investment. Start setting aside funds now to be prepared when concrete guidance does get issued. 

Everything from your service delivery to staff training may need a closer look to comply with new standards following the passage of the One Big Beautiful Bill. At the service-plan level, your HCBS business will need to evaluate the changing requirements and standards of care. For example, your state might decide that physical therapy for a certain condition twice a week is 

sufficient. If you are currently providing services four times a week, you may need to adjust your schedule. 

When implementing these changes, staff training and education will be crucial. After all, your staff are the ones performing the services. Workshops, cheat sheets, and quarterly refreshers can help align your vision with your staff's actions. Your staff should come to work prepared and equipped with the information needed to provide patient services that meet your expectations and the requirements of the changing landscape. 

While the changes under the One Big Beautiful Bill are still in their infancy, now is the time to implement strategic budgeting and scenario planning. Evaluate your financials and perform stress tests under what-if reimbursement models. 

What if Medicaid funding gets cut for this particular service? How will that impact your financials? What if you opened a new service that the state is interested in offering? Will that make up for lower reimbursement rates? What if you hired a new specialized employee? Will that employee give you the ability to submit different reimbursement codes? 

At the same time, create contingency lines for sudden rate cuts or compliance fines. Look at historical information and closely track legislative changes. For example, if the penalty amount is increasing by 10%, your financials should reflect a 10% increase when forecasting the next period. Now is not the time for aggressive budgeting and forecasting. Instead, be conservative and plan for the worst-case scenario. 

Last-minute adoption can lead to countless negative outcomes. For one, your patients might notice a disruption to care and access. Let's say that you weren't planning for the reimbursement timeline to double. As a result, you did not have the cash flow to support payroll, resulting in staff not showing up to work. This can lead to a ripple of effects, from poor patient care to high acquisition costs to find new staff. 

Early adoption and proactive planning can help you avoid these consequences. Your HCBS businesses can lower provider burnout, reduce inefficiencies and unexpected costs, and bolster trust with your state and your patients. Even though many of the Medicaid and HCBS provisions don't go into effect for over a year, now is the time to start thinking about how your business will change. 

We've covered a lot of likely scenarios that HCBS and other businesses that submit waiver billing will see over the next few years. While it's still uncertain how waiver billing will change, expect significant adjustments to account for budgetary constraints and the goal of improved patient care. Here are four immediate steps you can take in anticipation of changes in the pipeline: 

1. Rework billing for efficiency and effectiveness. Pay close attention to billing codes used and the reimbursement timelines.
2. Train employees on billing expectations and current documentation requirements. This might include ensuring EVV submissions are complete and accurate.
3. Revisit current technology use and start researching new programs that can streamline workflows and billing.
4. Plan for the future by using what-if scenarios to understand how your financials could change and what you need to do now to put your HCBS business in a better financial position.

If you need additional help preparing your HCBS business for the upcoming years, look into CMCS advisories, NADSP toolkits, and state-level TA centers. There are professionals and organizations willing and able to help you make a successful transition into the next phase of waiver billing. 

Sources https://www.congress.gov/bill/119th-congress/house-bill/1/text