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Some quality measures for home- and community-based services would become mandatory under a proposed rule announced Thursday by the Centers for Medicare & Medicaid Services. Several other changes related to HCBS were proposed as well.

CMS proposes requiring states to report every other year on the HCBS quality measure set for their HCBS programs. The agency said that the measure set would be updated “at least every other year” in consultation with states and other interested parties.

Some of the quality measures would become mandatory, and some would be “measures that the Secretary of HHS will report on states’ behalf, measures that states can elect to have the Secretary of HHS report on their behalf, and measures that the Secretary will provide States with additional time to report,” CMS said.

First-ever measure set released in 2022

CMS released its first-ever quality measure set for HCBS in July 2022, saying at the time that although the measures were voluntary, they were expected to become mandatory in the future. At the time, the agency “strongly” encouraged states to use the standards to assess and improve quality and outcomes in their HCBS programs.

The introduction of the measures, assisted living provider groups said then, came amid “longstanding, chronic underfunding” of HCBS that led to provider workforce shortages. The financial issue needed to be addressed, the groups said, noting, however, that they supported the quality improvement effort in general.

In addition to covering Section 1915(c) service plan and health and welfare subassurances, the measure set detailed in July 2022 included HCBS quality and outcomes in the areas of access and rebalancing. Perhaps of most interest to assisted living providers, however, were the measures related to community integration and HCBS settings requirements as defined in the HCBS settings final rule. That rule, which had a March 17 compliance deadline for criteria not directly affected by COVID-19 public health emergency disruptions, established requirements for the qualities of settings in which Medicaid HCBS are provided under sections 1915(c), 1915(i) and 1915(k) of the Social Security Act. 

The HCBS final settings rule requires that all home- and community-based settings are integrated and supportive of full access to the greater community; are selected by individuals from among setting options; ensure individual rights of privacy, dignity and respect, and freedom from coercion and restraint; optimize autonomy and independence in making life choices; and facilitate choice regarding services and who provides them.

As part of the quality measure-related reporting requirements announced Thursday, states would be required to establish performance targets for each of the mandatory measures in the HCBS quality measure set. States also would be required to stratify data for certain measures by race, ethnicity, tribal status, sex, age, rural/urban status, disability, language or other factors, to help CMS measure health disparities and advance health equity. 

CMS is proposing that the requirements be effective three years after the effective date of the final rule, although reporting for certain mandatory measures and reporting for certain populations of beneficiaries could be phased in over time due to the complexity required for state reporting. “Further, the requirements for states to report stratified data would be phased in over a seven-year period after the effective date of the final rule,” CMS said.

The agency also proposes to add requirements for states to compile and post required reporting data on a public website, and CMS also would report on its website the information reported by states.

2 proposed rules released Thursday

In all on Thursday, CMS unveiled two proposed rules, which the agency said are meant to “further strengthen access to and quality of care across Medicaid and the Children’s Health Insurance Program (CHIP), the nation’s largest health coverage programs.”

The need for the HCBS changes, CMS said in a fact sheet, reflect the fact that “[o]ver the past several decades, HCBS have become a critical component of the Medicaid program and are part of a larger framework of progress toward community integration of older adults and people of all ages with disabilities that spans efforts across the Federal government. The proposed changes in this rule are intended to strengthen necessary safeguards to ensure health and welfare, promote health equity for people receiving Medicaid‑covered HCBS, and achieve a more consistent and coordinated approach to the administration of policies and procedures across Medicaid HCBS programs.”

Specifically, HCBS-related provisions, according to CMS, would:

  • Establish a new strategy for oversight, monitoring, quality assurance and quality improvement for HCBS programs;
  • Strengthen person‑centered service planning and incident management systems in HCBS;
  • Require states to establish grievance systems in fee-for-service HCBS programs;
  • Require that at least 80% of Medicaid payments for personal care, homemaker and home health aide services be spent on compensation for the direct care workforce (as opposed to administrative overhead or profit);
  • Require states to publish the average hourly rate paid to direct care workers delivering personal care, home health aide and homemaker services;
  • Require states to establish an advisory group for interested parties to advise and consult on provider payment rates and direct compensation for direct care workers;
  • Require states to report on waiting lists in section 1915(c) waiver programs; service delivery timeliness for personal care, homemaker and home health aide services; and a standardized set of HCBS quality measures; and
  • Promote public transparency related to the administration of Medicaid‑covered HCBS through public reporting of quality, performance and compliance measures.

If finalized, CMS said, the proposed HCBS requirements would supersede and replace the reporting and performance expectations described in March 2014 guidance for Section 1915(c) waiver programs. Some assisted living communities provide HCBS such as personal care and supportive services to residents via those state Medicaid waivers.

Except where noted, the newly proposed requirements would apply to services delivered through both fee-for-service and managed care delivery as well as demonstration projects unless explicitly waived.

There will be a 60-day comment on the proposals after they are published in the Federal Register, which is expected to occur May 3.

HCBS spending growing

Medicaid spending on HCBS now exceeds spending on institutional services such as those provided by skilled nursing facilities, Daniel Tsai, CMS deputy administrator and director of its Center for Medicaid & CHIP Services, said in a July 2022 letter to state Medicaid directors. Whereas in 1990 HCBS expenditures accounted for 13% of the $31 billion in federal and state expenditures for all Medicaid LTSS, including nursing home expenditures, by 2020, HCBS expenditures accounted for $125 billion, or 62%, of the $199 billion spent nationally on Medicaid LTSS, he said.

Nationally, more than 7 million people receive HCBS under Medicaid, and Medicaid-funded HCBS accounts for $125 billion annually in state and federal spending, according to CMS.

Forty-eight percent of all US assisted living communities are Medicaid-certified, according to the National Center for Assisted Living. More than 16% of assisted living residents rely on Medicaid to pay for daily services.

Earlier this year, six CMS officials proposed the creation of a “universal foundation” of quality measures to reduce the reporting burden and confusion for providers and better align measures across the agency’s more than 20 quality programs. The officials, including the directors of the Medicaid and Medicare centers, outlined their proposal to counter “measure proliferation” in a letter published in the New England Journal of Medicine.

For more information

The proposed rules announced Thursday are scheduled to be published May 3 in the Federal Register but are available for review as PDFs now:

Also, see related coverage in sister publication McKnight’s Home Care here:

CMS proposes that 80% of Medicaid payments for home care go to direct care workers

See Related Articles, below, for previous related McKnight’s Senior Living articles.

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