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States Receive More Time to Bring HCBS Settings into Compliance

Here is an update on The Centers for Medicare & Medicaid Services (CMS) extending the timeline for states to comply with a 2014 rule defining the settings for Medicaid home and community-based services (HCBS). On May 9, 2017, the CMS Center for Medicaid and CHIP Services issued an Informational Bulletin extending the deadline for states to demonstrate compliance with the settings criteria by three years, to March 17, 2022. It does not extend the deadline for final CMS approval of Statewide Transition Plans, which must still be approved by March 17, 2019. The bulletin makes no changes to the underlying rule, nor indicates plans to do so.

The rule, released on January 16, 2014, sets a national minimum standard for community integration and experience of services in Medicaid-funded HCBS and represents the most significant change in the program since it was created in the 1980s. The rule requires that settings be integrated in and support full access to the community, including opportunities to seek employment and work in competitive, integrated settings. The rule focuses on the experience of individuals receiving services in home and community-based settings, and is intended to ensure that services funded as HCBS are not institutional in nature. It sets special protections for residents of provider-owned and -controlled settings, such as the ability to control one’s own schedule, receive visitors, and have access to food. Settings that are not found to be in compliance, but which the states wish to continue to fund through HCBS, will go through a process of “heightened scrutiny” from CMS. The rule will have the biggest impact on services for people with intellectual/developmental disabilities and older adults who receive services in settings like group homes and assisted living.

States were initially given a 5 year implementation period – until March of 2019 – to write a Statewide Transition Plan describing their plans to come into compliance with the rule, seek public input on the plan, have the plan approved by CMS, and bring all settings into compliance. To date, only one state – Tennessee – has received final approval of their plan. Twenty-one states have received initial approval from CMS with specific feedback on steps necessary to receive final approval:

Alabama Indiana Montana Rhode Island
Alaska Iowa Nebraska South Carolina
Arkansas Kentucky New Mexico Utah
Delaware Louisiana Ohio Virginia
Hawaii Missouri Oregon Washington
Wyoming

The new deadline gives states additional time to bring settings into compliance, but maintains the March 2019 deadline on approval for Statewide Transition Plans. The timeline increase is consistent with state and provider feedback on the complexity of transitioning the HCBS system. Some states had been asking for more time, including Ohio, which proposed a compliance date of 2024 in their transition plan.

Earlier this year, Health and Human Services (HHS) Secretary Tom Price and CMS Administrator Seema Verma sent a letter to the nation’s governors regarding the new administration’s approach to working with states. The letter indicated that HHS would provide additional time and increase state involvement in assessing compliance with the HCBS settings rule. The informational bulletin published this week addresses the timeline; states and providers should look out for more releases regarding the role of states in assessing compliance, particularly in the heightened scrutiny process.

For more information on the HCBS settings rule or the implications of the extension, contact Rachel Patterson at rpatterson@healthmanagement.com.

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