Caregiver with older adult
(Credit: staticnak1983 / Getty Images)

The Centers for Medicare & Medicaid Services announced some adjustments regarding the implementation of its home- and community-based services settings final rule this week, but senior living industry association representatives say that, although they appreciate those adjustments, providers and states need additional time and flexibility to meet the rule’s requirements.

CMS said Tuesday that it is keeping the March 17, 2023, compliance deadline for its HCBS settings final rule, although the agency is making some accommodations to states and providers due to workforce challenges related to the COVID-19 public health emergency.

“Our priority is to make sure that the HCBS settings rule is implemented in a way that is both meaningful for individuals receiving services and reflective of realities that states and providers have been facing in addressing and living through the COVID-19 PHE,” the agency relayed in a PowerPoint presentation shared as part of an update on the final rule.

The federal government said that it issued the HCBS settings final rule in January 2014 to help ensure that beneficiaries of Medicaid-supported home- and community-based programs, including those living in senior living communities, have full access to services in settings that are integrated into the community rather than in institutional settings such as skilled nursing facilities. Some assisted living communities provide HCBS to their residents through Medicaid waivers.

In addition to defining appropriate settings, the final rule gave states additional options for expanding HCBS and to target services to specific populations. It also amended the HCBS waiver program to add new person-centered planning requirements, allowing states to combine multiple target populations in one waiver and streamlining waiver administration.

The final rule’s original deadline for transitioning to full compliance was March 17, 2019, but it previously was extended to March 17, 2022, and then to March 17, 2023, the latter extension due to the pandemic.

Compliance with some criteria by March 2023

CMS said Tuesday that states still must receive final approval of their statewide transition plans by March 17, 2023, and states and providers must be in compliance with all settings criteria not directly affected by PHE disruptions by that date, to continue to receive federal reimbursement for HCBS beyond the transition period.

“This ensures states’ policies and procedures reflect the settings criteria, and that states have completed an assessment of their individual settings and identified steps providers will need to take to reach compliance,” the agency said.

Specifically, CMS said, states and settings must comply with these criteria by March 17, 2023:

  • Individuals served must have privacy, dignity, respect and freedom from coercion and restraint; and
  • Individuals must have control of their personal resources.

Additionally, all states and provider-owned and controlled residential settings must be fully compliant with these criteria by March 17, 2023:

  • Individuals served must have a lease or other legally enforceable agreement providing similar protections;
  • Individuals must have privacy in their units, including lockable doors, and freedom to furnish or decorate the unit;
  • Individuals must have access to food and visitors at any time;
  • The setting must be physical accessible; and
  • There must be person-centered service plan documentation of modifications to relevant regulatory criteria.

Compliance with other criteria

Regarding other criteria in the final rule, CMS said that states and providers must implement them “to the fullest extent possible” and develop plans and timelines for full implementation.

CMS said that it “strongly encourages” states that have not received final approval of their statewide transition plans to submit drafts by July 31. As of May 25, only 20 states and Washington, D.C., had received final approval of their plans, according to CMS.

More time needed

Industry association representatives said Wednesday that due to challenges related to the pandemic, CMS should provide more time for implementation of the final rule.

“We appreciate CMS’s provisions in this rule that address the ongoing challenges providers have faced during this pandemic. However, we believe the best way to achieve a meaningful implementation of the rule is by extending the transition period deadline, giving both assisted living providers and states the opportunity to continue to collaborate to determine the best path forward and integrate the provisions of the HCBS settings regulations in a way that facilitate beneficiary autonomy and community participation,” the National Center for Assisted Living told McKnight’s Senior Living.

Mollie Gurian, vice president for home based and HCBS policy for LeadingAge, noted that “much remains to be done by states and other stakeholders to ensure that providers — whether in assisted living, adult day or other home and community-based settings — can achieve compliance with the final rule.”

“To date, states’ commitment of resources needed to ensure a functional infrastructure that enables providers to provide documentation or communicate their progress on initiatives varies widely,” she told McKnight’s Senior Living. “For instance, in some states, websites or emails, providers have told us, are not functional; in other states, the agency responsible for providing, say, a proper contact to resolve issues may not have accurate information.”

Under the rule, certain settings — including locations in buildings in which inpatient institutional treatment is provided, settings in buildings on the grounds of or adjacent to a public institution, or settings that isolate individuals from the broader community — are presumed ineligible for the waiver program unless they meet a heightened standard of proof. Tuesday, CMS said that “[s]tates should continue to submit presumptively institutional settings for a heightened scrutiny review.”

Many assisted living providers, Gurian said, are subject to this heightened scrutiny before CMS will sign off that their service is not delivered in an institutional setting. Assisted living communities, she said, rely on support and collaboration from their state agencies to document that they meet standards for noninstitutional settings, and then report that information to CMS.

“Our members tell us states’ progress in providing that needed guidance varies widely,” Gurian said. 

“Bottom line, to make the goals of this rule a reality, some states must recalibrate their HCBS settings strategies based on the pandemic in alignment with CMS’ guidance and also invest [American Rescue Plan Act] and other funds in the HCBS direct care workforce for providers including adult day and assisted living,” she said. “In light of the current challenges, as well as time and resources needed to address them, we believe continued flexibility for providers in meeting this rule is a reasonable and fair request.”

‘More important than ever’

CMS, in its PowerPoint presentation, said that “[a]midst pandemic recovery efforts, the tenets of the settings regulation are more important than ever to bring to the lives of older adults and individuals with disabilities.”

The agency said that it will be holding several meetings with stakeholders to review information related to its updated implementation strategy.

For additional information, see the PowerPoint presentation and the Medicaid website.

Also, read McKnight’s Senior Living’s previous coverage of the HCBS settings final rule.