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 CMS Issues FAQs on HCBS Regs, but AL Advocates Say Questions Remain

In guidance to state Medicaid directors on March 22, the Centers for Medicare & Medicaid Services (CMS) explained further the implementation of the 2014 Home and Community Based Services (HCBS) regulation, but assisted living advocates said more details are necessary despite new Frequently Asked Questions (FAQ) from the agency.

CMS said the HCBS regulation impacts older adults and individuals with disabilities eligible for Medicaid HCBS (including intellectual, developmental, and physical disabilities, as well as behavioral health conditions).

At its foundation, the 2014 regulation and related guidance sought to define the characteristics of settings that were community-based, in contrast to those that may have the qualities of an institution, CMS said in issuing the new FAQs.

The 2014 regulation also mandated that states develop a transition plan to ensure that all settings receiving certain Medicaid funding meet federal HCBS standards. However, in response to state and stakeholder concerns about the process, CMS granted a three-year extension of that transition period in 2017, extending the date by which states must demonstrate compliance from March 2019 to March 2022. 

CMS said over the past 18 months it has sought feedback from all concerned and learned that while it received support for the 2014 rule that individuals had a right to be served in the most integrated care setting possible, the agency also “received concerns that the implementing guidance was too prescriptive, fostered uncertainty, and may unnecessarily lead to beneficiaries losing access to preferred settings.”

With this updated guidance in the form of FAQs, CMS said it hoped to streamline and clarify the “heightened scrutiny” process, which allows settings initially presumed by states to have characteristics of an institution an opportunity to be reviewed further by CMS so that they can maintain access to Medicaid funding.

CMS said the FAQs “provide clarity on this process so that states have the flexibility they need to serve their residents while preserving an appropriate federal oversight role.”

But, advocates for assisted living providers at the National Center for Assisted Living (NCAL – American Health Care Association/NCAL) say the results are not so clear-cut.

“NCAL is pleased to see CMS issue this additional guidance to states about the heightened scrutiny process for the HCBS Settings Rule, especially as it acknowledges that rural settings are not isolating merely because of their location,” Lilly Hummel, NCAL senior director of policy and program integrity, tells Provider.

“However, we still have concerns about the lack of details regarding its plan and timeline to conduct a sampling of providers for heightened scrutiny review. Each assisted living community is unique and deserves individual review as well as the opportunity for appeal.”

The FAQs, she explains, leave beneficiaries and providers, particularly those looking to build and offer new settings, in a state of continued uncertainty for several more years.

“NCAL encourages CMS to provide more information on these items to ensure assisted living and other HCBS providers are able to serve our nation’s most vulnerable,” Hummel says.

For its part, CMS said the updated guidance clarifies the ways in which qualified providers can demonstrate compliance with regulatory criteria by the end of the transition period, facilitates beneficiary and family choice, and advances the tenets of person-centered service delivery.

According to CMS, the following are some changes incorporated into this updated guidance: 

--Streamlined and better-defined criteria of settings that isolate HCBS beneficiaries and therefore must undergo “heightened scrutiny,” reducing uncertainty for states, providers, and families.

--New flexibilities that allow states to minimize additional review by CMS, including the ability for CMS to conduct sampling and for states to work with certain providers to come into compliance by 2020 and avoid a heightened scrutiny review.

--Removal of specific examples of settings that would be automatically identified as presumptively institutional due to isolation, including intentional communities. This allows these settings to be evaluated on their own individual characteristics.

--Streamlined requirements for what states must submit for public comment and to CMS on presumptively institutional settings.

--More limited federal oversight role for private homes by clarifying that private residences where individuals received Medicaid-funded services are assumed to comply with the regulatory criteria and that settings in which Medicaid HCBS are not received do not need to comply with the criteria of a home- and community-based setting at all.

View the FAQs at

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