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New CMS Guidance on Home and Community-Based Services Settings Rule

Lilly Hummel

CMS has issued new guidance to states that address several issues regarding the Home and Community-Based Services (HCBS) Settings rule. CMS will have an FAQ training session on Thursday, March 28 from 1:30-3:30ET. You can register here to attend this training.

This guidance leaves unchanged the regulatory requirement that states send for CMS heightened scrutiny review those HCBS settings that are (1) co-located with an institutional setting, (2) in a building located on the grounds of or immediately adjacent to a public institution (e.g., county-owned nursing center), or (3) any other settings that have the effect of isolating beneficiaries.

The guidance provides some clarity on the following:

• CMS clarifies the factors it will consider in determining whether a setting may have the effect of isolating individuals. 
• CMS does not consider rural settings automatically presumed to be isolating and subject to heightened scrutiny. For settings in a rural area, just like for settings in any geographic area, states should refer to the factors used to determine whether a setting may have the effect of isolating individuals.
• Given the large number of settings that are required by regulation to undergo heightened scrutiny, CMS will conduct its heightened scrutiny review via a random sampling process. The agency provides some detail on the random sampling selection, the three possible CMS responses to a review, and when states can provide CMS with additional information. CMS also provides a more detailed list on what information states should submit to CMS for those settings randomly selected to undergo heightened scrutiny review.
• States are not expected to assess an individual’s private residence for compliance with the settings criteria when that resident receives non-residential HCBS. Additionally CMS does not require, but states have the option to require, that individuals receiving non-residential HCBS must reside in a compliant setting. For example, this could apply if a person receives adult day services but lives in a non-compliant setting.

Providers of Medicaid HCBS should stay tuned for new information from their state affiliates and Medicaid or Aging Departments.

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