NAPGCM Public Policy E-Newsletter: CMS Issues Final Rule on Community Living Options January 16, 2014

CMS Issues Final Rule on Community Living Options
Released to NAPGCM Membership on January 16, 2014

On Friday, January 10, 2014, the Centers for Medicare and Medicaid Services (CMS) released the Medicaid Home and Community-Based Services (HCBS) settings final rule. These regulations detail the requirements states must adhere to when providing Medicaid home and community-based long-term services and supports to older adults and persons with disabilities. The rule is part of the Affordable Care Act's Community Living Initiative. This initiative was launched in 2009 to develop and implement innovative strategies to increase opportunities for Americans with disabilities and older adults for community living.

Under the final rule, Medicaid programs must support home and community-based settings that serve as an alternative to institutional care and that take into account the quality of individuals' experiences. The final rule includes a transitional period for states to ensure that their programs meet the home and community-based services settings requirements.

The final rule includes the following broad changes to Medicaid HCBS:

  • Expands HCBS and targets services to specific populations;
  • Defines and describes the requirements for home and community-based settings;
  • Specifies that service planning must be developed through a person-centered planning process that reflects individual preferences and goals; and
  • Provides states with additional flexibilities when designing and administering HCBS waivers.

The following provisions of note are included in the new rule.

  • Choice of service provider. Medicaid beneficiaries must have free choice of a provider, and they cannot be forced to receive services from the same entity where they receive housing.
  • Modification of requirements based on service plan documentation. Any modification to conditions that apply to a provider-owned or controlled residential setting must be documented in a person-centered service plan. Specifically, the plan must document a number of requirements, including specific need, positive interventions and supports used prior to modifications, less intrusive methods that were tried and failed, and informed consent.
  • Heightened scrutiny for locations with qualities of an institutional setting. Home and community-based settings do not include locations that have the qualities of an institution as determined by CMS. Any setting within, on the grounds of, or immediately adjacent to a facility that provides inpatient institutional treatment, or any other setting that effectively isolates Medicaid HCBS beneficiaries from the broader community is presumed institutional unless CMS determines otherwise through heightened scrutiny.
  • Grandfathering to protect beneficiaries penalized by increased stringency of level of care after modification. Individuals receiving state plan HCBS are protected from service denial due to the state performing a modification to make its criteria more stringent.