How Alabama pays for disability services

Waiver inventory

Case management is not a waiver service in the ID Waiver. It is furnished as a Medicaid state plan Targeted Case Management service under section 1915(g)(1). The CWP carries Support Coordination as a waiver service. No 1915(i), 1915(b)(3), or 1915(k)/CFC authority for people with IDD was identified in the Alabama HCBS waiver listing.

State-only funded programs

None identified. Checked: the ADMH FY2025 Annual Report financial report, which shows Developmental Disabilities expenditures of $772,128,544 for FY2025 and states that "$606 million in federal funds ... make up 81 percent of the Developmental Disability Division (DDD)'s budget," indicating the non-federal 19 percent functions as Medicaid state match rather than as a separate state-only service program; the ADMH Division of Developmental Disabilities services page; the ADMH Systems Management and Waivers page; and the ADMH site search for rate and budget documents. The FY2026 legislative appropriations described in the ADMH annual report ($8 million General Fund plus $5 million Other State Funds for civil commitment beds; $12 million for veterans programs) are mental health and substance use appropriations, not developmental disabilities. ADMH does fund a Provider Readiness Initiative tied to the CWP launch, but no dollar amount is published in the documents retrieved. - mh.alabama.gov - mh.alabama.gov

County / regional / local funding

None identified. ADMH delivers DD services through five regional community services offices and contracts with community provider agencies, but no county levy, county board tax, or local mill levy dedicated to developmental disabilities services was found in the ADMH annual report, the ADMH DD services pages, or the three waiver applications. Regional structure reference: mh.alabama.gov

Funding scale

• Total ADMH Developmental Disabilities expenditures and encumbrances FY2025: $772,128,544, out of a $1,445,681,218 department total. Source: mh.alabama.gov
• Federal share of the DD Division budget: $606 million, or 81 percent, FY2025. Same source.
• Combined Medicaid spending on ID/LAH plus CWP, demonstration year 3 (FY2024): $517,255,240 ($508,881,032 ID/LAH plus $8,374,208 CWP; includes HCBS claims, non-HCBS claims, and administration). Demonstration year 2: $516,549,359. Source: mh.alabama.gov
• Projected waiver service costs (Factor D basis) for the year beginning 10/1/2025: ID Waiver $339,325,150.52 for 4,659 participants; LAH Waiver $8,236,333.84 for 544 participants. CWP 1915(c) year 5: $51,091,184.70 for 2,147 participants. Sources: the ID, LAH, and CWP applications listed under Official rate schedule links.
• Spending per participant (Factor D): ID Waiver $72,832.19; LAH Waiver $15,140.32; CWP $23,796.55. Average length of stay on the ID Waiver: 356 days.
• Per-member-per-month Medicaid cost, demonstration year 3: CWP $3,789 versus ID/LAH $11,301. Demonstration year 2: CWP $2,979 versus ID/LAH $8,762. Source: CWP interim evaluation report.
• FMAP: 72.55 percent for FY2027 per KFF. kff.org
• People served in DD waivers FY2025: 5,157 total (ID 4,185; LAH 517; CWP 455). Source: ADMH FY2025 Annual Report.
• Total statewide waiver slots by demonstration year: year 1, 6,529 (500 CWP / 6,029 ID-LAH); year 2, 6,695 (1,097 / 5,598); year 3, 6,696 (1,098 / 5,598). Source: CWP interim evaluation report.
• Waiting list: the CWP interim evaluation report states "As of 2021, there were more than 1,600 individuals on a waiting list compared to about 5,700 individuals receiving services." The 1115 application put the waiting list at approximately 2,000 people. A current statewide waiting list count for 2025 or 2026 was not found in published ADMH or Alabama Medicaid documents. Applicants are ranked on a statewide waiting list by criticality of need, with length of time waiting as the tie-breaker (ID Waiver renewal, Appendix B-6-f).
• Net new enrollments from the waiting list into CWP: 91 in year 1, 301 in year 2, 293 in year 3, against a 10-year baseline average of 204 per year. Source: CWP interim evaluation report.

Residential funding detail

The ID Waiver is overwhelmingly a residential program. In the cost estimate for the year beginning 10/1/2025, Residential Habilitation accounts for $280,150,650 of the $339,325,150.52 total, roughly 83 percent, covering 3,825 users at an average of 313 days each and an average unit cost of $234.00 per day.

Payment structure. Residential Habilitation is paid as a per diem. Alabama does not publish a flat statewide group-home per diem. The waiver states the rate is built person by person using a "Residential Rate Tool": "The rate setting methodology for residential habilitation is driven by the staff hours needed by each individual, divided by the number of other individuals sharing those staff hours (staff hours). A standard rate per hour for direct service staff was developed from surveys. Supervision hours (house managers and QDDPs) are derived by formula from the direct support hours." A 15 percent administrative factor and a non-personnel operating cost of $19.25 per day (including $3.50 for basic transportation) are added. Homes certified as Specialized Medical Residential Services homes or Specialized Behavioral Services homes qualify for an enhanced hourly staff rate. Transportation to day programs and community activities is bundled into the residential payment.

Settings funded. ID Waiver: Residential Habilitation in provider-rented, leased, or owned dwellings with enforceable leases required, plus Supported Living Service billed monthly at up to $3,087.90. LAH Waiver: family and own-home settings, with a Residential Habilitation code available. CWP: Community-Based Residential Services (per day), Adult Family Home (host home model), and Supported Living Services, with rates determined by the same staff-hours logic plus factors for transportation, nurse oversight and delegation, remote supports, assistive technology, PERS, and natural supports.

Room and board. Not state-funded. The ID Waiver states plainly: "Participant's benefits pay for room and board," and "There is no cost center for adding room and board as part of direct care." The CWP states: "Participant's earned and unearned income pay for room and board." In practice this falls to SSI and other participant income.

ICF/IID. ICF/IID is the level-of-care standard for all three waivers. Alabama no longer operates state institutions for people with intellectual disabilities; a current count of private ICF/IID beds or spending was not found in the documents retrieved.

Rate structure link: mh.alabama.gov

Comparable service rates

CWP service rates are set by ADMH and approved by the Alabama Medicaid Agency on a fee-for-service basis, with outcome payments for some pre-employment services, but no published CWP rate schedule was located.

Official rate schedule links

• ID and LAH Waiver Service Options Rates and Limitations (PDF, effective 1/5/2024): mh.alabama.gov
• ID and LAH Waiver Rates landing page: mh.alabama.gov
• ID Waiver renewal application effective 10/1/2025 (rate methodology in Appendix I-2, cost estimates in Appendix J-2-d): medicaid.alabama.gov
• Living at Home Waiver renewal effective 10/1/2025: medicaid.alabama.gov
• CWP 1915(c) amendment effective 2/1/2026: medicaid.alabama.gov
• HCBS waivers services matrix: medicaid.alabama.gov
• CWP annual monitoring report 2025: medicaid.alabama.gov

Notable features and flags

• Public comment on the CWP 1115(a) extension ran August 10 to September 15, 2026, for an extension period of October 1, 2026 to September 30, 2031. Alabama proposes to eliminate the Group 5 enrollment tier and move all remaining CWP expenditure authority to 1915(c). mh.alabama.gov
• ID Waiver and LAH Waiver renewals both took effect October 1, 2025 and were signed 1/22/2026. Terminology changed throughout: QIDP became QDDP, Case Manager became Support Coordinator, and the IQ criterion was set at "72 and below" per an amendment effective July 2024.
• CWP amendment effective February 1, 2026 added and revised services; the amendment document is dated 1/20/2026.
• Self-direction is expanding fast inside CWP: 40.1 percent of CWP participants used self-direction in demonstration year 3 versus 12.3 percent in ID/LAH, and self-directed spending reached 17.7 percent of total CWP waiver spending. Source: CWP interim evaluation report, July 2026.
• HCBS setting compliance shifted materially: 65.4 percent of CWP participants in year 3 lived in settings not owned or controlled by a provider, versus 35.3 percent of ID/LAH participants. Alabama reported completing HCBS Final Rule implementation in FY2025.
• Published ID and LAH waiver rates carry an effective date of 1/5/2024. No rate increase newer than that date was found on the ADMH rate page as of August 2026.

Confidence

Solid: waiver structure, authority, participant counts and cost-neutrality figures, all taken directly from the ID, LAH, and CWP applications; the ID/LAH published rate sheet; ADMH FY2025 people-served counts and the $772.1 million DD expenditure figure; and the CWP interim evaluation spending and enrollment tables. Estimated or inferred: the $234.00 average residential per diem is Alabama's own planning average inside the waiver cost estimate, not a posted rate, because residential rates are individually determined. Could not find: a current (2025 or 2026) statewide waiting list count; any published CWP rate schedule; any Alabama ICF/IID bed count or spending; and any state-only DD program appropriation. The absence of a state-only DD program is a finding from the documents checked rather than an affirmative statement by the state. Direct retrieval of Alabama Medicaid PDFs required working around an incomplete TLS certificate chain on medicaid.alabama.gov; the documents themselves were retrieved and read in full.

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