CMS gives states 3 more years to comply with HCBS final rule

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The Centers for Medicare & Medicaid Services has given states three additional years to comply with a final rule regarding the provision of home- and community-based services to Medicaid beneficiaries.

The new deadline for compliance is March 17, 2022, Brian Neale, director of the agency's Center for Medicaid & CHIP Services, announced Tuesday in an informational bulletin. The former deadline was March 17, 2019.

The final rule, issued in January 2014, established new reimbursement criteria for home- and community-based settings with the goal of enabling Medicaid beneficiaries to receive services in settings that are integrated into the community rather than in skilled nursing facilities. Many assisted living communities have provided home- and community-based services 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.

Tuesday's formal delay was not unexpected. In a March 14 letter issued to governors, Health and Human Services Secretary Tom Price, M.D., and CMS Administrator Seema Verma, MPH, indicated that CMS was considering lengthening the five-year timeframe that states originally were given to comply with the final rule.

States continue to work on the transition plans necessary to receive reimbursement under the new criteria and also continue to determine whether certain senior living settings qualify to provide home- and community-based services. Tennessee is the only state that has received final approval of its transition plan. Twenty-six other states have received initial approval of their plans, meaning that they have met public comment, input and summary requirements but systemic or site-specific assessments have not been completed yet.

“States should continue progress in assessing existing operations and identifying milestones for compliance that result in final statewide transition plan approval by March 17, 2019,” Neale wrote. “However, in light of the difficult and complex nature of this task, we will extend the transition period for states to demonstrate compliance with the home- and community-based settings criteria until March 17, 2022, for settings in which a transition period applies.”

Reaction from advocacy groups

Leadership at organizations representing assisted living providers told McKnight's Senior Living that they are pleased with the decision.

“The National Center for Assisted Living appreciates the flexibility CMS is granting states to make certain that implementation of the HCBS final rule is accomplished in a thoughtful, collaborative way,” NCAL Executive Director Scott Tittle said. “We must get this rule right to ensure that assisted living remains a home- and community-based option for vulnerable seniors who rely on Medicaid and consider these communities to be their home. NCAL looks forward to continuing this conversation with CMS and states.”

Maribeth Bersani, chief operating officer and senior vice president of public policy for Argentum, said that some providers and state regulators have experienced challenges implementing the new rule. “We don't expect that all states will need the additional time, but the extension does allow the opportunity to be more deliberative in implementing the rule,” she said.

LeadingAge also said it was pleased to that CMS responded to the concerns of states and stakeholder groups by extended the compliance deadline. “However, we continue to emphasize the need for more practical guidance from CMS so states and other stakeholders can implement the regulatory provisions in a manner compliant with program requirements, without producing unintended consequences that will reduce the number of assisted living and adult day centers providing Medicaid HCBS, as well as the service options available for older adults and persons with disabilities,” the organization told McKnight's Senior Living.

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