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ANCOR News - 02.07.17

CMS Home and Community Based Services (HCBS) Settings Rule: Part IV

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The final CMS HCBS rule identifies settings that are presumed to have institutional qualities and do not meet the rule’s requirements for home and community based settings.

Policy Wonk Alert

These settings include those in a publicly or privately-owned facility that provide inpatient treatment; on the grounds of, or immediately adjacent to, a public institution; or that have the effect of isolating individuals receiving Medicaid-funded HCBS from the broader community of individuals not receiving Medicaid-funded HCBS. A state may only include such a setting in its Medicaid HCBS programs if CMS determines through aheightened scrutiny process, based on information presented by the state and input from the public, that the state has demonstrated the setting meets the qualities for being home and community based and does not have the qualities of an institution.

The third category of settings, those “that have the effect of isolating individuals receiving Medicaid-funded HCBS from the broader community of individuals not receiving Medicaid-funded HCBS” has been the most challenging for states to determine and defend compliance. Questions and concerns have been raised about traditional day service settings for people with developmental disabilities, larger group homes, even those serving more than four people, and groups of residential settings where apartments are clustered in the same apartment building or group homes are located on the same cul de sac.

Where are we with plans for this type of setting? Most states have used some kind of self-assessment process for service providers to evaluate each of its settings against an array of questions designed to test whether the setting has an effect of isolating people receiving HCBS services from the broader community. Those assessments typically draw heavily from the CMS exploratory questions provided in Part II and III of this series for residential and non-residential settings respectively. But the states cannot and are not ending there. CMS requires that a) the state validate the results of those self-assessments by the service provider, and b) post the results of the assessments, and the validation results, for public comment. The public, individuals and advocacy organizations, can also independently communicate with the state and/or CMS regarding any concerns about a specific setting. As I mentioned previously, the best way to participate and to know what is happening about services you provide is to be involved with state-led stakeholder groups, provider associations and/or advocacy organizations leading efforts within the community. All public comment must be documented and responded to by the state and submitted in the Transition Plan to CMS.

What happens when a Transition Plan is submitted to a state? When a state submits its findings to CMS in the form of the statewide Transition Plan, it must include the results of the assessments for each setting, and the plan for remediating any areas of non-compliance prior to 2019, or, submit a plan to remove that setting from Medicaid HCBS funding in a manner that does not harm beneficiaries. If there is a question regarding compliance, the state may submit a request to proceed to what is termed heightened scrutiny. CMS may also require a state to proceed to heightened scrutiny for certain settings, even in cases where the state has asserted those settings are compliant. This is known as a presumption that the setting is isolating by the very nature of the setting. In other words, this means CMS believes the setting will isolate people receiving HCBS services no matter what the provider may do as a result of where the setting is located, or how the service is structured or defined by the state, which might limit integration.

So what does heightened scrutiny mean? The heightened scrutiny process is in essence the demonstration by the state through various forms of evidence that overcomes that presumption that a setting is isolating. How can a state demonstrate that a setting does not have the effect of isolating individuals receiving HCBS from the broader community of individuals not receiving HCBS? CMS provides the following guidance.

Policy Wonk Alert

The state has several options for the type of evidence it can submit to overcome the presumption that a setting is isolating. The evidence should support the following qualities:

  • The setting is integrated in the community to the extent that a person or persons without disabilities in the same community would consider it a part of their community and would not associate the setting with the provision of services to persons with disabilities.
  • The individual participates regularly in typical community life activities outside of the setting to the extent the individual desires. Such activities do not include only those organized by the provider agency specifically for a group of individuals with disabilities and/or involving only paid staff; community activities should foster relationships with community members unaffiliated with the setting.
  • Services to the individual, and activities in which the individual participates, are engaged with the broader community.


You can find additional information on examples of settings that isolate individuals receiving HCBShere.

Are there certain things that are of particular concern when it comes to heightened scrutiny?Some high profile alarm bells that draw increased scrutiny include the use of restraints, internal cameras, posted schedules, regimented meal times, isolated or gated settings, lack of security for personal belongings, weak training in individual rights, and lack of choice and control over one’s activities; these practices are the most obvious, but certainly are not the only areas needing to be assessed. CMS also strongly recommends the state conduct observations and interviews as part of its validation process rather than relying solely on documentary evidence.

Where do we go from here? The landscape continues to evolve as states work through the Transition Plan process. Most states have not yet completed the validation process, or have not completed an entire cycle of independent review of all the settings in the state. At the recent national HCBS Conference, CMS reported that while six states have received initial approval of their Transition Plans, only one state, Tennessee, has achieved CMS’ satisfaction so far. As state Transition Plans are approved by CMS, states must submit quarterly reports on the on-going progress of the plan. States must use the remaining transition period to bring the setting into compliance with all requirements, transition individuals from that setting to a compliant setting, transition the coverage authority to one not requiring provision in a home or community based setting, or transition to non-Medicaid reimbursement.

Approval of any heightened scrutiny request only pertains to the individual settings subject to the request. CMS and the state will collaborate through the Statewide Transition Plan and the review of HCBS waiver and Medicaid State Plan Amendment actions to ensure a plan’s implementation and ongoing compliance monitoring. In the approval of those documents, CMS will communicate the settings and the scope under which they are adjudicated to be home and community-based services. CMS will indicate that any material changes to the settings approved through heightened scrutiny, such as an increase in licensing capacity, the establishment of additional disability-oriented settings in close proximity (e.g., next door), or changes in the ways in which community integration is realized, will require the state to update CMS, and may result in a reevaluation of the setting.

Challenges and opportunities. The new HCBS settings rules and the impact those rules are having on states, providers and people receiving HCBS services are complex and challenging. But in every challenge there are opportunities, and the ultimate goal is to achieve the essence of the American with Disabilities Act and ensure that people with disabilities receive services and support in the most integrated manner possible, ensuring choice, autonomy and individual rights. People with disabilities are our family members, friends and neighbors and have the same rights to community living, employment and decision-making no matter if one receives HCBS services or not. For providers of services, there will be opportunities to demonstrate how their organization supports these concepts and principles. There will be many opportunities in your state to learn about best practices, new ideas and lessons learned, and we will share updates and ideas as we learn from our customers across the country.