Employment supports for people with I/DD often stall between two federal funding streams that rarely run at the same time. The U.S. Government Accountability Office’s Sept. 23 report, Disability Employment: Providers Cited Challenges with State Coordination of Federal Funds (GAO-26-107741), reviewed how Vocational Rehabilitation (VR) and Medicaid HCBS programs pay for job coaching and related services in Georgia, Pennsylvania, and Washington.
In those states, VR and I/DD agencies generally fund employment services sequentially — VR first, then Medicaid HCBS — rather than braiding multiple streams for the same person at once. Providers are paid either by units of service (billed time) or by milestones such as job placement. Each model has trade-offs: unit billing may not push agencies to fade supports as skills grow, while milestone pay may not cover unpredictable actual costs, providers told GAO.
Providers also described administrative burden navigating two agencies. In Pennsylvania, some supports coordinators were confused about whether a VR closure letter was required before HCBS employment services could begin, creating unnecessary gaps. ANCOR flagged the report in a Sept. 29 Capitol Correspondence note.
GAO’s sample is nongeneralizable and carries no formal recommendations. The report points to 2022 joint guidance from Education, HHS, and Labor encouraging states to sequence and braid funds for competitive integrated employment.
Why this matters for providers and DSPs
Job coaches and employment teams inside provider agencies live this handoff every week: a person may lose momentum while waiting for VR closure paperwork before HCBS-funded supports start. Supervisors can reduce gaps by documenting which funder is active, clarifying with state VR and I/DD staff when a closure letter is truly required, and planning fade schedules so milestone or unit billing does not strand someone mid-job.