Messsage from Gov. Mark Parkinson, President & CEO of AHCA/NCAL about CMS Final Rule on HCBS

Shelley Sabo

Dear AHCA/NCAL Member,

CMS issued its much anticipated final rule defining Home and Community-Based (HCBS) settings under Medicaid waiver programs.  This rule has been a high priority of AHCA/NCAL over the past several years, as previous drafts denied or greatly restricted Medicaid access to seniors and individuals with disabilities who rely on these services.  The final rule is expected to be published in the Federal Register on January 16, 2014.

We saw the critical nature of this rule and thanks to our members' efforts, we were able to educate CMS about this potential crisis, and our major concerns have been addressed. Our goal was to ensure residents would be able to remain in place at the assisted living and residential care communities they and their families had initially chosen. We were able to put all of our assets behind this important effort. This outcome is a real testament to our ability to mobilize and engage our broad-based membership on the Hill and with CMS.


Here is what's included in the final rule:

1. A transitional process for states to ensure that their waivers and state plans meet the HCBS settings requirements

New 1915(c) waivers or 1915(i) state plans must meet the new requirements to be approved. For currently approved 1915(c) waivers and 1915(i) state plans, states must evaluate the settings currently in their 1915(c) waivers and 1915(i) state plan programs and, if there are settings that do not fully meet the final regulation's home and community-based settings requirements, work with CMS to develop a plan to bring their program into compliance.

The public will have an opportunity to provide input on states' transition plans. CMS expects states to transition to the new settings requirements in as brief a period as possible and to demonstrate substantial progress during any transition period. CMS will afford states a maximum of a one-year period to submit a transition plan for compliance with the home and community-based settings requirements of the final rule, and CMS may approve transition plans for a period of up to five years, as supported by individual states' circumstances, to effectuate full compliance.


2. Assisted Living settings are no longer excluded based on proposed physical plant/location requirements.

As you will recall, AHCA/NCAL had serious concerns with provisions that excluded assisted living settings based on proposed physical plant/location requirements.  It appears that many of these issues have been addressed. 

3. Person-centered planning

The final rule requires that HCBS programs have a person-centered planning that addresses the health and long term services and support needs that are reflective of the individual Medicaid beneficiary's preferences and goals.  According to CMS, the agency will be providing additional guidance to states regarding the process for operationalizing person centered planning. 

4. HCBS settings must meet certain qualifications.

These include:

  • The setting is integrated in and supports full access to the greater community;
  • Is selected by the individual from among setting options;
  • Ensures individual rights of privacy, dignity and respect, and freedom from coercion and restraint;
  • Optimizes autonomy and independence in making life choices; and
  • Facilitates choice regarding services and who provides them. 

5. There are additional requirements for provider-owned or controlled HCBS residential settings.

These requirements include:

  • The individual has a lease or other legally enforceable agreement providing similar protections to a lease; 
  • The individual has privacy in their unit including lockable doors, choice of roommates and freedom to furnish or decorate the unit; 
  • The individual controls his/her own schedule including access to food at any time; 
  • The individual can have visitors at any time; and 
  • The setting is physically accessible.


Regarding some of the specific concerns NCAL had with the last version of the proposed rule, we were pleased to see CMS make the following modifications:

  • Disability specific complex - Rather than citing disability specific complex in the list of settings presumed to be an HCB setting, the CMS final rule includes language that reads "any other setting that has the effect of discouraging integration of individuals in the broader community."  
  • Rebuttable presumption - In the proposed rule, there was a provision where the Secretary would have a "rebuttable presumption" that certain settings that are co-located or near institutional settings such as NFs.  The "rebuttable presumption" provision has been struck from the final rule and replaced with language stating that these settings will be subjected to heightened scrutiny if states seek to include such settings in their HCBS programs.  States will be required to present evidence to CMS that the setting is HCB in nature and does not possess the qualities of an institution.  CMS will consider input from stakeholders in such instances and states will be required to seek public input.
  • Choice of provider in provider-owned or controlled settings - In the draft rule, there was language that required that beneficiaries have choice in service providers.  The final rule says that when an individual chooses to receive HCB services in a provider-owned setting where the provider is paid a single rate to provide a bundle of services, it is assumed that the individual is choosing that provider and cannot choose an alternative provider to deliver all services included in the bundled rate.  For services not included in the bundled rate, individuals may choose any qualified provider including the provider who owns or controls the setting.
  • Private rooms/roommate choice - The proposed rule required providers to offer Medicaid beneficiaries a choice of whether to share a room.  Under the final rule, that requirement has been shifted to states.  Now states will be required to offer options available in both private and shared residential units within HCBS programs.  Providers will be responsible for facilitating individuals being able to choose their roommates in residential settings.

The final rule will take effect March 17, 2014 (60 days after the rule is published in the Federal Register on January 16, 2014). There is a transition period after the effective date.  CMS is allowing states a one-year maximum timeframe to submit a transition plan for compliance with the final rule and CMS may approve transition plans up to five years to approve transition plans to ensure full compliance as supported by individual state's circumstance.

CMS has created a website that contains several fact sheets related to the rule.  In addition, CMS will host a webinar on January 23 at 1 p.m. EST to discuss the final rule, with a repeat of the webinar on January 30, at 1 p.m. EST.  You can information on those on CMS' Home & Community Based Services website.


In an unusual move, CMS has issued a flurry of fact sheets today regarding the final rule.  This is most likely in response to the overwhelming attention that NCAL members and others have given this rule through public comments and other advocacy efforts.  One of those fact sheets best summarizes CMS' overall actions with the final rule:

"...CMS is moving away from defining home and community-based settings by 'what they are not' and toward defining them by the nature and quality of participants' experiences.  The home and community-based setting provisions in the final rule establish a more outcome-oriented oriented definition of home and community-based settings rather than one based solely on a setting location, geography or physical characteristics."

NCAL will conduct a more comprehensive analysis of the rule and provide additional details next week.  While there may still be some issues of concern, overall we believe we have made tremendous progress on many of the key issues.

We know the road to this rule has been a long one. Thanks, again to our members for your continued efforts which helped make a difference with this outcome.


signature m parkinson




Mark Parkinson
AHCA/NCAL President & CEO