Calder Lynch headshot
Calder Lynch

Citing concerns related to the coronavirus, the Centers for Medicare & Medicaid Services on Tuesday said it would give states an additional year to comply with a settings rule related to the provision of home- and community-based services to older or disabled Medicaid beneficiaries.

States now have until March 17, 2023, to complete the implementation of activities required to demonstrate compliance with settings criteria that were part of a final rule issued in 2014.

Those criteria were established with the goal of enabling Medicaid beneficiaries to receive HCBS in settings that are integrated into the community rather than in skilled nursing facilities. Many assisted living communities provide HCBS to their residents through Medicaid waivers. Under the rule, however, 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.

“States’ stay-at-home and/or safer-at-home orders and the process of social distancing have made it difficult, if not impossible, for states to accurately evaluate how an individual is experiencing community integration in current HCBS settings,” Calder Lynch, deputy administrator and director of CMS’ Center for Medicaid & CHIP Services, wrote in a letter to state Medicaid directors. “These necessary directives have seriously impacted not only the measurement of community integration for individuals, but the intent of the Settings Rule to ensure that individuals with disabilities and older adults have the opportunity to be active participants in their communities. Lastly, older adults and individuals with disabilities who receive Medicaid HCBS often have underlying conditions that increase risks to health and welfare associated with COVID-19 that can further delay a return to integrated activities as they existed prior to the global pandemic.”

Lynch “strongly encouraged” states to use the extra year “to evaluate how the provision of Medicaid-funded HCBS fulfills larger public health priorities and advances the tenets of beneficiary autonomy and community integration,” especially in light of the pandemic.

“As states continue to examine their array of HCBS as part of strategies to recover from the COVID-19 [public health emergency], the availability of person-centered, individualized supports will take on even greater importance,” he said. Several states have asked CMS about “lessening reliance on institutional settings in the provision of long-term care, due to the disproportionate impact of COVID-19 in nursing facilities and other institutions,” Lynch said.

Related deadlines announced Tuesday:

  • March 31, 2021: The date by which CMS requests that information on settings located in the same building as a public or private institution or on the grounds of or adjacent to a public institution be submitted by states for heightened scrutiny.
  • July 1, 2021: The date by which a setting that isolates individuals from the broader community must be found to have been brought into compliance through remediation strategies in order for the state not to submit the setting to CMS for a heightened scrutiny review.
  • Oct. 31, 2021: The deadline for states to submit to CMS the names of isolating settings that have not completed necessary remediation for a heightened scrutiny review. This is an additional year from the original timeline.

The original deadline for compliance with the HCBS settings final rule was March 17, 2019, but on May 9, 2017, that deadline was extended three years, to March 17, 2022, before the change that was announced on Tuesday.

To date, 14 states plus Washington, DC, have received final approval of their transition plans. Thirty states have received initial approval, meaning that they have met public comment, input and summary requirements but systemic or site-specific assessments have not been completed yet. Six states have met public comment, input and summary requirements, but CMS has identified issues with the transition plans that must be resolved before initial approval.