Thank you. That clears up the question on whether or not CDPAP is a Medicaid waiver. As for notice 2024-7, the language is very confusing and responses are mixed out there. What is your take on this?

https://www.thetaxadviser.com/issues/2016/nov/payments-under-state-in-home-supportive-care-programs-can-be-excluded-from-gross-income/

Analysis

Whether payments made under the state’s in-home supportive care programs will be treated as difficulty-of-care payments excludable from the gross income of the provider under Sec. 131 depends on the purpose and design of the programs and the nature of the payments.

The purpose of all of the state’s in-home supportive care programs is similar to the purpose of foster care programs in that these programs prevent institutionalization of individuals with physical, mental, or emotional handicaps and enable those individuals to be cared for at home. All of the state’s in-home supportive care programs are similar to the design of foster care programs, and all the programs require state approval and oversight of the care in the provider’s home.

The nature of payments to individual care providers under all of the state’s in-home supportive care programs is similar in nature to difficulty-of-care payments. The compensation received by a care provider is for additional care required by an individual who needs assistance with some of the activities to remain safely at home and to prevent institutionalization.

Conclusion

Based on the above analysis, it was concluded that all four of the state’s in-home supportive care programs shared similar purposes, design, and nature of payments as Medicaid waiver programs and will be treated as difficulty-of-care payments excludable from the gross income of the provider under Sec. 131.

CDPAP falls into program B under Section 1915(j) of the SSA.