After 18 months of discussions with state Medicaid directors and interested advocacy groups, the Centers for Medicare and Medicaid Services (CMS) provided new guidance for determining what qualifies as an institutional versus home- and community-based services (HCBS) setting for individuals with disabilities. In this post, we take a look at why the new guidance was needed, important updates, and implications for HCBS providers.
The Need for Clarification
The new guidance from CMS, provided via letter on March 22, 2019, helps address questions and concerns that were raised following its 2014 Home and Community Based Services regulation, which provided specific guidelines for determining whether a setting should be classified as an institution or an HCBS. State Medicaid directors, tasked with determining qualification for funding, had difficulty determining if certain settings would be considered “isolated” based on the 2014 language and therefore not eligible for HCBS waivers.
Important Updates
Under the new guidance, CMS more clearly defines an “isolated” setting as one that limits residents’ interaction with the greater community. By this definition, that would include any residential setting that restricts service options or provides activities in locations that are not integrated within the community.
CMS removed requirements that pertain to the appearance of an HCBS setting and its location in determination of eligibility for Medicaid funding. They also provided more specific examples of what constitutes as an institutional setting, while encouraging states to maintain high scrutiny of all places considered to be an HCBS.
Implications for HCBS Providers
While the 2014 rule was supposed to be implemented by states no later than March 17, 2019, the new guidance extends the deadline by three years to March 2022. These updated guidelines provide improved clarity for states in determining which residential settings are eligible for HCBS waiver funding They also provide more flexibility to HCBS providers in terms of what their homes look like or where they are located.
The primary factor in securing and maintaining HCBS designation is still determined as an established setting that promotes community integration for residents and provides opportunities and support for activities outside the home.
If you would like to know how CapGrow Partners can help your organization with HCBS housing, please contact Dené Sanchez (773-329-4678) or visit our website.