[Federal Register Volume 73, Number 66 (Friday, April 4, 2008)]
[Proposed Rules]
[Pages 18676-18700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-1084]
[[Page 18675]]
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Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 431, 440, and 441
Medicaid Program: Home and Community-Based State Plan Services;
Proposed Rule
Federal Register / Vol. 73, No. 66 / Friday, April 4, 2008 / Proposed
Rules
[[Page 18676]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 431, 440, and 441
[CMS-2249-P]
RIN 0938-AO53
Medicaid Program: Home and Community-Based State Plan Services
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend the Medicaid regulations to
define and describe home and community-based State plan services
implementing new section 1915(i) of the Social Security Act as added by
section 6086 of the Deficit Reduction Act of 2005.
DATES: Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on June 3, 2008.
ADDRESSES: In commenting, please refer to file code CMS-2249-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions for
``Comment or Submission'' and enter the filecode to find the document
accepting comments.
2. By regular mail. You may mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-2249-P, P.O. Box 8016, Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-2249-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to either of the following addresses:
a. Room 445-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201; or
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.)
b. 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by following the
instructions at the end of the ``Collection of Information
Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Kathy Poisal, (410) 786-5940.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following Web site as soon as possible after they have been
received: http://www.regulations.gov. Follow the search instructions on
that Web site to view public comments.
Comments received timely also will be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Background
[If you choose to comment on issues in this section, please include
the caption ``BACKGROUND'' at the beginning of your comments.]
On February 8, 2006, the Deficit Reduction Act of 2005 (DRA 2005)
(Pub. L. 109-171) was signed into law. Section 6086 of the DRA is
entitled ``Expanded Access to Home and Community-Based Services for the
Elderly and Disabled.'' Section 6086(a) of the DRA adds a new section
1915(i) to the Social Security Act (the Act) that allows States, at
their option, to provide home and community-based services (HCBS) under
their regular State Medicaid plans. This option allows States to
receive Federal financial participation (FFP) for services that were
previously eligible for the funds only under waiver or demonstration
projects, including those under sections 1915(c) and 1115 of the Act.
Section 1915(i) of the Act sets forth several conditions that States
must meet, and actions they must take, if they choose to add State plan
HCBS to services available through the State plan. Section 6086(b) of
the DRA provides for the Secretary to develop, through the Agency for
Healthcare Research and Quality, quality of care measures to assess
Medicaid HCBS.
Under section 1915(i) of the Act, States can provide HCBS to
individuals who require less than institutional level of care and who
would therefore not be eligible for HCBS under 1915(c) waivers. Section
1915(i) of the Act does not link HCBS to institutional level of care or
require cost savings over institutional services, permitting States to
provide the State Plan HCBS benefit to individuals whether or not they
meet an institutional level of care, and based on need for support
rather than population characteristics.
Section 1915(i) of the Act does impose other limits not required by
section 1915(c) waivers, including a prescribed set of services States
may choose to offer, and exclusion of individuals with income above 150
percent of the Federal Poverty Level (FPL). HCBS under the State plan
are limited to elderly and disabled individuals.
HCBS are available in some States in demonstration programs under
section 1115 of the Act. Each demonstration under section 1115 of the
Act is unique with respect to the Medicaid requirements waived, type
and scope of services offered and population served, and cannot be
generally characterized. Therefore, we are not including HCBS provided
under section 1115
[[Page 18677]]
demonstrations in this discussion except to note that the section 1115
authority has been used by States to provide services in the home and
community. States can also provide Medicaid long-term care services to
individuals in the community through the mandatory State plan home
health benefit, and the optional State plan personal care services
benefit. These services are occasionally referred to as home and
community-based, but are not included as HCBS in this discussion. The
section 1915(i) benefit does not diminish the State's ability to
provide any of these existing community services. States opting to
offer State plan HCBS under section 1915(i) of the Act can continue to
provide the full array of community services under section 1915(c)
waivers, section 1115 demonstration programs, mandatory State plan home
health benefits, and the optional State plan personal care services
benefit.
Before 1981, the Medicaid program provided limited coverage for
long-term care services in non-institutional, community-based settings.
Medicaid's complex eligibility criteria and other factors made
institutional care much more accessible than care in the community.
Medicaid HCBS were established in 1981 as an alternative to care in
Medicaid institutions, by permitting States to waive certain Medicaid
requirements upon approval by the Secretary. Section 1915(c) of the Act
was added to title XIX by the Omnibus Budget Reconciliation Act of 1981
(OBRA 1981) (Pub. L. 97-35). Programs of HCBS under section 1915(c) of
the Act are known as ``waiver programs'', or simply ``waivers'' due to
the authority to waive Medicaid requirements.
Since 1981, the section 1915(c) HCBS waiver program has afforded
States considerable latitude in designing services to meet the needs of
people who would otherwise require institutional care. In 2007,
approximately 300 HCBS waivers under section 1915(c) of the Act serve
over 1 million elderly and disabled individuals in their homes or
alternative residential community settings. States have used HCBS
waiver programs to provide numerous services designed to foster
independence; assist eligible individuals in integrating into their
communities; and promote self-direction, personal choice, and control
over services and providers. The addition of section 1915(i) of the Act
affords some of the same flexibility through the State plan.
Another important aspect to this background is the passage of the
Americans with Disabilities Act of 1990 (ADA) and the Olmstead v. L.C.,
527 U.S. 581 (1999) U.S. Supreme Court decision. In particular, Title
II of the ADA prohibits discrimination on the basis of disability by
State and local governments and requires these entities to administer
services, programs, and activities in the most integrated setting
appropriate to the needs of qualified individuals with disabilities. In
applying the most integrated setting mandate, the U.S. Supreme Court
ruled in Olmstead v. L.C. that unnecessary institutionalization of
individuals with disabilities may constitute discrimination under the
ADA. Under Olmstead, States may not deny a qualified individual with a
disability a community placement when: (1) Treating professionals
determine that community placement is appropriate; (2) the community
placement is not opposed by the individual with a disability; and (3)
the community placement can be reasonably accommodated.
In the following discussion and the proposed regulation, we refer
to particular home and community-based service(s) offered under section
1915(i) of the Act as ``State plan HCBS'' or simply ``HCBS''.\1\ We
refer to the ``State plan home and community-based services benefit''
when describing the collective requirements of section 1915(i) of the
Act that apply to States electing to provide one, or several, of the
authorized HCBS. We choose to use the term ``benefit'' rather than
``program'' to describe section 1915(i) of the Act to avoid possible
confusion with HCBS waiver programs. The State plan HCBS benefit shares
many features with section 1915(c) waiver programs, and in other
respects is similar to other State plan services, but differs from both
in important respects.
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\1\ Note that the abbreviation HCBS does not distinguish between
singular and plural. Where this could be confusing, we spell out
home and community-based service(s).
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The Secretary has delegated administration of the Medicaid program,
including the State plan HCBS benefit furnished under Medicaid, to the
Centers for Medicare & Medicaid Services (CMS). Effective January 2007,
States that demonstrate they meet certain requirements may choose to
furnish HCBS under the State plan. States may elect to provide HCBS
through waiver programs, State plan services, or both. The availability
of the State plan HCBS benefit does not foreclose, or otherwise
restrict, a State's ability to operate its HCBS waiver programs, nor
does the availability of HCBS waiver services within a State affect its
ability to add the HCBS benefit to its State plan.
A. Overview of the State Plan HCBS Benefit
The following overview describes the provisions of the DRA in the
order they are presented in section 1915(i) of the Act. The proposed
regulation and the explanation of each proposed requirement in section
II. are arranged so that related requirements are grouped for clarity.
1. General Provisions of the State Plan Amendment Option To Provide
Home and Community-Based Services for Elderly and Disabled Individuals
Section 1915(i)(1) of the Act grants States the option to provide,
under the State plan, the services and supports listed in section
1915(c)(4)(B) of the Act governing HCBS waivers, not including the
``other services'' described therein. The services specifically listed
in section 1915(c)(4)(B) of the Act are as follows: Case management,
homemaker/home health aide, personal care, adult day health,
habilitation, respite care, and for individuals with chronic mental
illness: Day treatment, other partial hospitalization services,
psychosocial rehabilitation services, and clinic services (whether or
not furnished in a facility). The HCBS may not include payment for room
and board (see additional discussion in section I.D.3.).
We interpret the statute as authorizing the services as titled in
section 1915(c)(4)(B) of the Act. Therefore, we would expect States to
define State plan HCBS with sufficient specificity that the nature and
scope of the service clearly relates to those listed in section
1915(c)(4)(B) of the Act.
Section 1915(i) of the Act explicitly provides that State plan HCBS
may be provided without determining that, but for the provision of such
services, individuals would require the level of care provided in a
hospital, a nursing facility (NF), or an intermediate care facility for
the mentally retarded (ICF/MR) as is required in section 1915(c) HCBS
waivers. While HCBS waivers must be ``cost-neutral'' to Medicaid, no
cost neutrality requirement applies to the section 1915(i) State plan
HCBS benefit. States are not required to produce comparative cost
estimates of institutional care and the State plan HCBS benefit. This
significant distinction allows States to offer HCBS to individuals
whose needs are substantial, but not severe enough to qualify them for
institutional or waiver services, and to individuals for whom
[[Page 18678]]
there is not an offset cost savings in NFs, ICFs/MR, or hospitals.
While eligibility for State plan HCBS does not require that the
individual would otherwise need an institutional level of care, the
services are intended to prevent progression to institutionalization
and to enable individuals to receive needed services in their own
homes, or in alternative living arrangements in what is collectively
termed the ``community'' in this context. (See additional discussion in
section I.D.2. regarding institutions not considered to be in the
community, and in which State plan HCBS will not be available.)
Section 1915(i)(1) of the Act requires that in order to receive
State plan HCBS, individuals must be eligible for Medicaid under an
eligibility group covered by the State plan. This section does not
create a new eligibility group. Individuals who have not been found
eligible for Medicaid cannot be enrolled in the State plan HCBS
benefit, even if they otherwise meet the requirements for the benefit.
In addition, individuals may not be enrolled in the State plan benefit
if their income exceeds 150 percent of the FPL.\2\ In determining
whether the 150 percent of the FPL requirement is met, the regular
rules for determining income eligibility for the individual's
eligibility group apply, including any more liberal income disregards
used by the State for that group under section 1902(r)(2) of the Act.
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\2\ The statute refers to ``the poverty line as defined in
section 2110(c)(5)''. The poverty guidelines are formally referenced
as ``the poverty guidelines updated periodically in the Federal
Register by the U.S. Department of Health and Human Services under
the authority of 42 U.S.C. 9902(2).'' Commonly referred to as the
``Federal Poverty Level'' or ``Federal Poverty Line'' (FPL), we will
adopt the term FPL in this regulation.
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2. Needs-Based Criteria
In contrast to the institutional level of care requirement for
eligibility in HCBS waivers, section 1915(i)(1)(A) of the Act requires
States to impose needs-based criteria for eligibility for the State
plan HCBS benefit. Additionally, the State may establish needs-based
criteria for each specific State plan home and community-based service
that an individual would receive.
Section 1915(i) of the Act does not authorize States to waive the
requirement of section 1902(a)(10)(B) of the Act relating to
comparability, as does section 1915(c) of the Act. Waiver of
comparability is a key feature of HCBS waivers, permitting the State to
target the HCBS benefit to certain populations by defining which groups
will be eligible for waiver services, and by having separate waivers
for different groups. Through use of eligibility criteria, States can
provide services for certain high need target groups that are not
comparable to the services received by other Medicaid beneficiaries in
the State. Under section 1915(i) of the Act, States are not authorized
to establish eligibility criteria in order to target services to
certain populations. Since comparability may not be waived, States must
determine eligibility for State plan HCBS on the basis of the following
criteria only:
The individual is eligible for medical assistance under
the State plan.
The individual's income does not exceed 150 percent of the
FPL.
The individual resides in the home or community.
The individual meets the needs-based criteria established
by the State.
Needs-based criteria for an individual service are subject to the
same requirements as needs-based eligibility criteria, and may not
limit or target any service based on age, nature or type of disability,
disease, or condition.
The heading of section 1915(i) of the Act describes the State plan
HCBS benefit as ``for Elderly and Disabled Individuals.'' However,
section 1915(i) of the Act does not include definitions of the terms
``elderly'' or ``disabled'' in setting forth eligibility criteria, and
instead requires eligibility to be based on need and on eligibility for
medical assistance under a State plan group. Thus, we believe that the
use of these terms in the statute is descriptive. Individuals who are
eligible for medical assistance under a group covered in the State's
plan and who meet the needs-based eligibility criteria for State plan
HCBS will have needs stemming either from a disability or from being
elderly. We note that section 1902(b)(1) of the Act prohibits the
Secretary from approving any plan for medical assistance that imposes
an age requirement of more than 65 years as a condition of eligibility.
The statute does not define ``needs-based.'' We are proposing to
define the nature of needs-based criteria to distinguish them from
targeting criteria, which are not permitted under the statute. However,
we would propose to provide States with the flexibility to define the
specific needs-based criteria they will establish. (See discussion
below of section 1915(i)(1)(D) of the Act.)
Section 1915(i)(1)(B) of the Act additionally requires that the
needs-based criteria for determining whether an individual requires the
level of care provided in a hospital, NF, or ICF/MR or under a waiver
of the State plan be more stringent than the needs-based eligibility
criteria for the State plan HCBS benefit. ``Stringency'' is not defined
in the statute. States establish stringency in defining particular
needs-based criteria. There is no expectation that States will modify
institutional levels of care to make them more stringent, in order to
satisfy this requirement. If the State's existing criteria for receipt
of institutional and HCBS waiver care are needs-based, and more
stringent than the criteria it will use for the State plan HCBS
benefit, the State need not modify its institutional criteria. We
anticipate that States will adopt the much simpler strategy of defining
the new State plan HCBS needs-based eligibility criteria at a less
stringent level than existing institutional criteria. In order to
implement the State plan HCBS benefit, States may need to add needs-
based criteria to their institutional level of care requirements, if
none presently exist. Section 1915(i) of the Act does not require that
such added needs-based institutional level of care criteria necessarily
result in excluding individuals who would be served without the added
criteria. In fact, the purpose of section 1915(i) of the Act appears to
be to expand access to HCBS to individuals who are not at an
institutional level of care, rather than to reduce access to
institutional and waiver services.
We note that section 1915(i) of the Act does not modify the
statutory coverage provisions of institutional benefits. States must be
cautious not to establish more stringent needs-based criteria for
hospitals, NFs or ICFs/MR that would reduce access to services mandated
elsewhere in title XIX, since those other provisions of the statute
were not amended. For example, the NF benefit is defined in section
1919(a)(1) of the Act as an institution that is primarily engaged in
providing to residents skilled nursing care, rehabilitation services,
and ``[o]n a regular basis, health-related care and services to
individuals who because of their mental or physical condition require
care and services (above the level of room and board) which can be made
available to them only through institutional facilities.'' To the
extent that needed health-related care and services above the level of
room and board are not available in the community, the NF institutional
benefit must remain available to all Medicaid eligible individuals
described in section 1919(a)(1)(C) of the Act.
We interpret the reference to hospitals in section 1915(i)(1)(B) of
the Act to
[[Page 18679]]
mean facilities certified by Medicaid as hospitals that are providing
long-term care services or services related to the HCBS to be provided
under the State plan HCBS benefit. General acute care Medicaid hospital
services are not subject to level of care determinations by the State.
We interpret the reference in section 1915(i)(1)(B) of the Act
``under any waiver of such plan'' to apply to section 1915(c) waivers,
as well as those section 1115 waivers that include HCBS. Section
1915(c) waivers by definition will have more stringent criteria than
the State plan HCBS benefit, as the waivers are required to use level
of care assessments equivalent to one or more of the institutional
levels of care.
In summary, the needs-based eligibility criteria for the State plan
HCBS benefit must have the effect of potentially admitting to the
benefit some individuals who do not meet the needs-based criteria for
institutionalized care, and may admit to the benefit individuals who do
meet the institutional needs-based eligibility criteria. We note that
individuals who meet eligibility requirements for both an institutional
benefit and the State plan HCBS benefit must be offered a choice of
either benefit.
3. Number Served
Section 1915(i)(1)(C) of the Act contains two provisions regarding
the number of individuals served. The first provision requires a State
to provide to the Secretary a projection of the number of individuals
expected to receive services. If this projection is exceeded, section
1915(i)(1)(D)(ii) permits the State to constrict its needs-based
eligibility thresholds for State plan HCBS. The second provision allows
the State to impose a maximum limit to the number of individuals to be
served through the State plan HCBS benefit. The latter provision
carries with it authority for the State to establish waiting lists for
the State plan HCBS benefit.
Section 1915(i)(1)(C)(i) of the Act requires that the State submit
projections of the number of individuals to be provided HCBS, in the
form and manner, and upon the frequency as the Secretary specifies. We
would propose to follow the practice used in HCBS waivers to calculate
the number served as unduplicated persons receiving services during a
12-month period. We would specify that States annually submit both the
projected number of individuals to be served and the actual number of
individuals served in the previous year. We refer to individuals served
under the benefit and included in the annual number served as having
been enrolled in the benefit. The statute refers to ``enrollment'' in
section 1915(i)(1)(D)(ii) of the Act concerning Adjustment Authority.
Because there are a number of steps involved in an individual
initiating service under the State plan HCBS benefit, ``enrollment'' is
a useful term to indicate individuals for whom those steps have been
completed, services have been authorized or provided, and who will be
accounted for in the annual number served under the benefit.
If the State exceeds its enrollment estimate, the State would
report the number of individuals actually served in the required annual
report to the Secretary, and revise the estimate for succeeding years.
Section 1915(i)(1)(C)(ii) of the Act provides an option for the
State to limit the number of eligible individuals to whom it will
provide the State plan HCBS benefit. The limit does not need to be the
same as the projected number of individuals to be served. As with the
projected number, we would specify that the limit be expressed in terms
of the number of unduplicated recipients eligible to receive the State
plan HCBS benefit, for a period of 12 months. We would propose that
States may establish limits for individuals to be served annually.
States may establish a phase-in and phase-out schedule for limits. The
State may also elect to place a limit on the number of individuals to
be served at any given time in the year (``slot'' methodology), so long
as the State also provides the annual report of actual unduplicated
recipients.
We would specify that the State submit a State plan amendment to
initiate or adjust the limit on the number of individuals to be served.
Consistent with 42 CFR 430.20, we would permit a service expansion to
become effective on the first date of the calendar quarter in which an
approvable amendment is received in CMS.
A State electing to use a waiting list must develop policies for
establishing and maintaining the list, if it elects to establish a
limit to the number of individuals served. We do not believe it would
be appropriate for us to describe waiting list policies that must
operate in each State. Rather, we would require the State to assure
that its policies are published with opportunity for comment,
equitable, and meet all applicable State and Federal requirements.
Those requirements include but are not limited to Medicaid provisions
such as timely evaluation and right to fair hearing; civil rights
protections such as the State's compliance with the Americans with
Disabilities Act (ADA) and the decision of the United States Supreme
Court in Olmstead v. L.C. and, in some cases, other judicial decisions
or procedures for court monitoring. Waiting list policies will also be
affected by the option in section 1915(i)(3) of the Act for the State
to elect not to comply with the requirement for statewideness (see
discussion in section I.14. of this proposed rule).
4. Independent Evaluation
Section 1915(i)(1)(D) of the Act sets forth a requirement for an
individual evaluation of need for each person applying for the State
plan HCBS benefit. The statute here uses the term ``assessment,'' while
sections 1915(i)(1)(E) and (H) of the Act refer to the initial
eligibility determination as the ``independent evaluation.'' We would
use the latter term for consistency. ``Independent evaluation,'' as
understood in light of section 1915(i)(1)(H) of the Act, means free
from conflict of interest on the part of the evaluator.
The independent evaluation applies the needs-based HCBS eligibility
criteria (established by the State according to section 1915(i)(1)(A)
of the Act), to an applicant for the State plan HCBS benefit. Section
1915(i)(1)(D) of the Act establishes that determining whether an
individual meets the needs-based eligibility criteria specified in
sections 1915(i)(1)(A) and (B) of the Act requires an individualized
and independent evaluation of each person's support needs and
capabilities. We interpret ``needs and capabilities'' to mean a
balanced approach that considers both needs and strengths. However, the
words ``capability'' and ``ability'' are historically connected with a
deficit-oriented approach to assessment, which is the opposite of the
statute's person-centered approach. Therefore, we would refer to needs
and strengths in this discussion and in the regulation.
We believe that the statute distinguishes needs-based criteria from
other possible descriptors of an individual's medical condition or
demographic situation, for example a diagnosis. We interpret needs-
based criteria as describing the individual's particular need for
support, regardless of the conditions and diagnoses that may cause the
need. Therefore, we would propose that a useful test of whether a
criterion is needs-based will be the type of data that would be needed
to complete that item in an evaluation. A needs-based criterion
requires the evaluator to determine the unique requirements of the
applicant, through interview if necessary.
[[Page 18680]]
Institutional/waiver level of care (LOC) criteria in some States do
not include needs-based criteria. We believe that States must include a
needs-based evaluation component of the institutional/waiver LOC
determination process so that stringency of those criteria can be
compared to stringency of eligibility criteria for the State plan HCBS
benefit.
Section 1915(i)(1)(D) of the Act indicates that the independent
evaluation may ``take into account'' the inability of the individual to
perform two or more activities of daily living (ADLs), (which the
statute defines by reference to section 7702B(c)(2)(B) of the Internal
Revenue Code of 1986), or the need for significant assistance to
perform these activities. The State may also assess other risk factors
it determines to be appropriate in determining eligibility for, and
receipt of, HCBS. The statute does not limit the factors a State may
take into account in the evaluation. For example, instrumental
activities of daily living (IADLs) could be considered.
5. Adjustment Authority
Section 1915(i)(1)(D)(ii) of the Act permits the State to adjust
the needs-based criteria described in section 1915(i)(1)(B) of the Act
in the event that enrollment exceeds the annual maximum number of
individuals that the State has projected it would serve. The purpose of
such an adjustment would be to revise its needs-based criteria in order
to reduce the number of individuals in the State who would be eligible
for the HCBS benefit. To preserve the requirement of 1915(i)(1)(B) that
more stringent needs-based criteria be in place for institutionalized
care, the adjusted eligibility criteria must still be less stringent
than those applicable to institutional levels of care. If the State
chooses to make this adjustment, it must provide at least 60 days
written notice to the Secretary and the public, stating the revisions
it proposes.
While the adjustment authority is granted to States without having
to obtain prior approval from the Secretary, we believe that the
statute requires the State to amend the State plan to reflect the
adjusted criteria. We believe that the State's adjustment authority
does not prevent the Secretary from disapproving a State plan amendment
that fails to comply with the statute and regulations. Therefore, the
Secretary would evaluate the State's adjusted criteria for compliance
with the provisions of this subparagraph and all requirements of
subpart K. A State may implement the adjusted criteria as early as 60
days after notifying all required parties. Section 430.16 provides the
Secretary 90 days to approve or disapprove a State plan amendment, or
request additional information. If the State implements the modified
criteria prior to the Secretary's final determination with respect to
the State plan amendment, the State would be at risk for any actions it
takes that are later disapproved.
After needs-based criteria are adjusted under this authority, the
statute provides for a period during which individuals previously
served under the State plan HCBS benefit would continue to receive
HCBS. Section 1915(i)(1)(D)(ii)(II) of the Act provides that an
individual who is receiving HCBS before the effective date for modified
needs-based criteria, (based on the most recent version of the criteria
in effect before the modification), must be deemed by the State to
continue to be eligible for State plan HCBS for a period of at least 12
months, beginning on the date on which the individual first received a
covered State plan HCBS. In order to ensure that an individual who has
been receiving HCBS for a year or more would not be subject to
immediate discontinuation of service, we are proposing to apply the
phrase ``at least'' in this context to require that regardless of the
length of time HCBS has been provided, the State must continue to deem
the individual eligible for services for no less than 60 days after
official notification of all required parties.
The statute does not provide any new remedy for individuals who
will lose services due to the adjustment in eligibility criteria for
the HCBS benefit. However, the requirements of 42 CFR subpart E would
apply. Loss of eligibility for the HCBS benefit does not affect
eligibility for other services for which the individual would be
eligible under the State plan.
We interpret section 1915(i)(1)(D)(III) of the Act to require that
if the State chooses to modify the needs-based criteria under the
adjustment authority of section 1915(d)(1)(D)(ii) of the Act, the
eligibility criteria for institutional levels of care (hospital, NF,
ICF/MR, and HCBS waiver services) applied by the State may be no less
stringent than those that were in effect before the inception of the
State plan HCBS benefit. Criteria for determining whether an individual
requires an institutional level of care must also be more stringent
than the adjusted needs-based eligibility criteria for the State plan
HCBS benefit.
Finally, we conclude that the State may choose to modify its needs-
based criteria at any time through the usual process of a State plan
amendment, whether or not the projected enrollment is exceeded.
6. Independent Assessment
Section 1915(i)(1)(E) of the Act describes the relationship of
several required functions. Section 1915(i)(1)(E)(i) of the Act refers
to the independent evaluation of eligibility in section 1915(i)(1)(A)
and (B), emphasizing the independence requirement. Section
1915(i)(1)(E)(ii) of the Act introduces the requirement of an
independent assessment following the independent evaluation. Thus,
there are two steps to the process: the eligibility determination,
which requires the application of the needs-based criteria, and the
assessment for individuals who were determined to be eligible under the
first step, to determine specific needed services and supports. The
assessment also applies the needs-based criteria for each service (if
any). Like the eligibility evaluation, the independent assessment is
based on the individual's needs and strengths. More specifically, both
physical and mental needs and strengths are assessed. These
requirements describe a person-centered assessment including mental
health, which will take into account the individual's total support
needs as well as need for the HCBS to be offered. The State must use
the assessment to: determine the necessary level of services and
supports to be provided; prevent the provision of unnecessary or
inappropriate care; and establish a written individualized plan of
care.
In order to achieve the three purposes of the assessment listed
above, the assessor must be independent; that is, free from conflict of
interest with providers, with the individual and related parties, and
with concern for budget. HCBS provided under the State plan may be
limited only by the needs-based criteria and medical necessity, not
budget controls. Therefore, we would propose specific requirements for
independence of the assessor in accord with section 1915(i)(1)(H)(ii)
of the Act, and we would apply these also to the evaluator and the
person involved with developing the plan of care, where the effects of
conflict of interest would be equally deleterious. These considerations
of independence inform the discussion below under section
1915(i)(1)(H)(ii) of the Act regarding conflict of interest standards.
Section 1915(i)(1)(F) of the Act provides detailed requirements for
the independent assessment:
An objective evaluation of the individual's inability to
perform two or more ADLs, or the need for significant assistance to
perform such activities is
[[Page 18681]]
required. We do not interpret ``objective'' to refer to the
independence required of the assessor as discussed above, but to refer
to an additional requirement for reliance on some level of valid
measurement appropriate to the ADLs. For example, an occupational
therapy (OT) or physical therapy (PT) evaluation could be required, the
results of which would be utilized by the assessor. We note that the
trained assessor is not necessarily responsible for performing the
objective evaluation, but should make sure that the objective
evaluation is performed by qualified individuals. We do not propose
methods to achieve this requirement, as the nature of the HCBS to be
provided and the needs-based criteria for the State plan HCBS benefit
will determine the appropriate means of evaluating ADLs.
Section 1915(i)(1)(F) of the Act defines ADLs in terms of section
7702B(c)(2)(B) of the Internal Revenue Code of 1986, which includes the
following: Bathing, dressing, toileting, transferring, eating, and
continence. This section of the Internal Revenue Code does not define
the terms ``inability'' or ``significant assistance.'' While States
have some flexibility to define these factors, we interpret
``inability'' to mean need for total support to perform an ADL, and
``significant assistance'' to mean assistance from another individual
or from assistive technology necessary for the successful performance
of the task.
An objective evaluation of ability to perform two or more ADLs is a
required element of the assessment but only a suggested element of the
eligibility evaluation. We conclude that partial or complete inability
to perform two or more ADLs is not a statutory prerequisite to receive
State plan HCBS, but is a required element of the assessment.
A face-to-face evaluation of the individual by an assessor
trained in the assessment and evaluation of persons whose physical or
mental conditions trigger a potential need for HCBS. To fulfill this
statutory requirement, we would propose that the State shall develop
standards and determine the qualifications necessary for agencies and
individuals who will perform independent assessments and be involved
with developing the plans of care.
Consultation with any responsible persons appropriate to
the individual and the needed supports, including family, spouse,
guardian, or healthcare and support providers. We do not believe the
examples listed in the statute to be prescriptive or limiting. The
assessor must give the individual and, if applicable, the individual's
authorized representative, the opportunity to identify appropriate
persons who should be consulted during this process. The role of the
assessor is to facilitate free communication from persons relevant to
the support needs of the individual, while protecting privacy, and
promoting the wishes and best interests of the individual. In necessary
circumstances, such as telephone communication with parties not
available for the meeting, consultations are not required to be
performed in person or at the same time and place as the face-to-face
evaluation, so long as any ancillary contacts are with persons the
individual has identified, are divulged and discussed with the
individual/representative, and documented.
An examination of the individual's relevant history,
medical records, and care and support needs.
Knowledge of best practices, and research on effective
strategies that result in improved health and quality of life outcomes.
The statute requires that the examination of the individual's history,
medical records, and care and support needs be guided by this
knowledge, and we would propose that this evidence-based approach
should apply to the entire process for assessment and plan of care
development.
If the State offers the option of self-direction and the
individual so elects, the assessment should include gathering the
information required to establish self-direction of services. We do not
propose to require States to conduct a separate or additional
assessment process for self-direction.
As long as States comply with all provisions related to conducting
the eligibility evaluation, independent assessment, and developing the
plan of care, States have flexibility in determining whether they will
require that the functions be performed as one activity by a single
agency or individual, or whether they wish to separate those functions
and have different entities involved.
7. Plan of Care
Section 1915(i)(1)(G) of the Act requires that the State plan HCBS
benefit be furnished under an individualized plan of care based on the
assessment. The statute describes a person-centered planning process,
which can only be achieved when States affirmatively and creatively
support individuals in the planning process. We would propose certain
requirements for developing the plan of care, but note that the degree
to which the process achieves the goal of person-centeredness can only
be known with appropriate quality monitoring by the State.
Unless the State has elected to impose a limit on the number of
individuals it would serve through its State plan HCBS benefit, the
State must make the services available to all eligible individuals as
they are assessed to need them. We conclude that the statute permits
determining the level of services required by an individual only
according to assessment of the individual's need, not according to
available funds. Individuals who qualify for HCBS may not be compelled
to receive them. Individuals may exercise their freedom to choose among
qualified providers in the planning process.
The State Medicaid agency may delegate other agents to develop the
plan of care, but remains responsible for ensuring compliance with all
requirements and must approve each plan of care developed.
Section 1915(i)(1)(G)(ii)(I)(aa) of the Act requires that the plan
of care is developed in consultation with the individual. The
requirements for who is consulted in developing the plan of care
parallel those describing who may be consulted during the assessment
process.
Section 1915(i)(1)(G)(ii)(I)(bb) of the Act requires that the
development of the plan of care take into account the extent of, and
need for family or other supports for the individual, and section
1915(i)(1)(G)(ii)(II) of the Act requires that the individualized plan
of care identify needed services. We interpret these provisions to
indicate that natural supports are explicitly included in the plan of
care. This means that individuals with equivalent need for support but
differing levels of family or other natural supports may be authorized
for different levels of HCBS. In the context of person-centered
planning and consultation with natural supports, we conclude that the
statute requires that the plan of care should neither duplicate, nor
compel, natural supports.
Section 1915(i)(1)(G)(ii)(III) of the Act provides that plans of
care will be reviewed at least annually and upon significant change in
the individual's circumstances. We interpret this provision to indicate
that diagnostic or functional changes are not required in order to
adjust a plan of care. Changes in external factors such as gain or loss
of other supports may trigger a review. We would require revision of
the plan of care if the review indicates that revision is appropriate.
By ``annually,'' we mean not less often than every 12
[[Page 18682]]
months. Finally, we would relate this requirement to the independent
assessment, since developing or revising the plan of care is based on
the assessment. We therefore would propose that the independent
assessment (number 6. above) is required at least annually, and when
needed upon change in circumstances, in order to comply with the
requirement to review plans of care with that frequency.
8. Self-Direction
Section 1915(i)(1)(G)(iii)(I) and (II) provides that States may
offer enrolled individuals the option to self-direct some or all of the
State Plan HCBS that they require. Many States have incorporated
elements of self-direction into section 1915(c) waiver programs as well
as section 1115 demonstration programs. Self-directed State plan HCBS
allow States another avenue by which they may afford individuals
maximum choice and control over the delivery of services, while
comporting with all other applicable provisions of Medicaid law. We
have urged all States to afford waiver participants the opportunity to
direct some or all of their waiver services. With the release of an
updated, revised section 1915(c) waiver application in 2005, we refined
the criteria and guidance to States surrounding self-direction (also
referred to as participant-direction), and established a process by
which States are encouraged, to whatever degree feasible, to include
self-direction as a component of their overall HCBS waiver programs.
While section 1915(i) of the Act does not require that States follow
the guidelines for section 1915(c) waivers in implementing self-
direction in the HCBS State plan benefit, we anticipate that States
will make use of their experience with 1915(c) waivers to offer a
similar pattern of self-directed opportunities with meaningful supports
and effective protections. Individuals who choose to self-direct will
be subject to the same requirements as other enrollees in the State
plan HCBS benefit.
Section 1915(i)(1)(G)(iii)(II) of the Act defines self-direction,
and requires that there be an assessment and plan of care. We do not
interpret these requirements to indicate assessments and plans in
addition to those required in sections 1915(i)(1)(F) and (G) of the
Act. Accordingly, we would propose that the requirements for a self-
directed plan of care at section 1915(i)(1)(G)(iii)(III) of the Act be
components of the assessment and plan of care required for all
enrollees in the State plan HCBS benefit.
Section 1915(i)(1)(G)(iii)(III) of the Act contains specific
requirements for the self-directed plan of care, for which we describe
proposed regulations in Section II. of this proposed rule. The proposed
regulations are consistent with our requirements for self-direction
under section 1915(c) HCBS waivers. Section 1915(i)(1)(G)(iii)(III)(dd)
of the Act requires that the plan of care be developed with a person-
centered process, which we would propose to require of all plans of
care for the State plan HCBS benefit.
Section 1915(i)(1)(G)(iii)(IV) of the Act describes certain aspects
of a self-directed budget, which we have termed budget authority.
Section 1915(i)(1) (G)(iii)(III)(bb) of the Act provides for self-
directed selecting, managing, or dismissing of providers of the State
plan HCBS, which we term employer authority. The proposed rule explains
both budget authority and employer authority in a manner consistent
with Section 1915(c) HCBS waiver policy.
Individuals require information and assistance to support them in
successfully directing their services. Therefore, we would require
States to design and provide functions in support of self-direction
that are individualized according to the support needs of each
enrollee. These functions should include information and assistance
consistent with sound principles and practice of self-direction, and
financial management supports.
Section 6087 of the DRA also amended the Act to add a new section
1915(j), that permits States to provide medical assistance for the
``Optional Choice of Self-Directed Personal Assistance Services (Cash
and Counseling).'' Section 6087 of the DRA is similar, but more
expansive than, the self-direction provisions in section 6086 of the
DRA. States should carefully examine the opportunities for providing
self-directed HCBS under either or both sections 1915(i) or 1915(j) of
the Act, depending on the goals and objectives of their Medicaid
programs.
9. Quality Assurance
Section 1915(i)(1)(H)(i) of the Act requires the State to ensure
that the State plan HCBS benefit meets Federal and State guidelines for
quality assurance, which we interpret as assurances of quality
improvement. Consistent with current trends in health care, the
language of quality assurance has evolved to mean quality improvement,
a systems approach designed to continuously improve care and prevent or
minimize problems prior to occurrences. This approach to quality is
consistent with guidelines developed by CMS in the CMS Quality
Improvement Roadmap and The Medicaid/SCHIP Quality Strategy. Guidelines
for quality improvement have also been made available through CMS
policies governing section 1915(c) HCBS waivers.
Additionally, section 6086(b) of the DRA requires the Secretary to
act through the Agency for Healthcare Research and Quality to develop
program performance and quality of care measures for Medicaid HCBS. The
Secretary is to use the indicators and measures to assess and compare
State plan HCBS, particularly with respect to the health and welfare of
the recipients of the services.
We would require States to have a quality improvement strategy, and
to measure and maintain evidence of quality improvement, including
system performance and individual quality of care indicators approved
or prescribed by the Secretary. We would require States to make this
information available to CMS upon request.
10. Conflict of Interest
Section 1915(i)(1)(H)(ii) of the Act provides that the State will
establish conflict of interest standards for the independent evaluation
and independent assessment. For reasons described above under
independent assessment, we believe that the same independence is
necessary for those involved with developing the plan of care. In this
discussion, we will refer to persons or entities responsible for the
independent evaluation, independent assessment, and the plan of care as
``agents'' to distinguish them from ``providers'' of home and
community-based services.
The design of services, rates and payment, and method of
administration by the State Medicaid agency all may contribute to
potential conflicts of interest. These contributing factors can include
obvious conflicts such as incentives for either over-or under-
utilization of services, subtle problems such as interest in retaining
the individual as a client rather than promoting independence, or
practices that focus on the convenience of the agent or service
provider rather than being person-centered.
The independent agent must not be influenced by variations in
available funding, either locally or from the State. Within the
services the State decides to offer, the plan of care must offer to
each enrollee the home and community-based services for which they
demonstrate need. The plan of care must be based on medical necessity
only, not funding levels. When local
[[Page 18683]]
entities directly expend funds or direct allocated resources for
services, in accordance with Sec. 433.53(c)(2), the State must have a
mechanism to ensure that availability of local funds does not affect
access to services, for example, using State resources to compensate
for variability in local funding. However, States may elect not to
apply statewideness requirements, making the benefit available only in
selected localities, possibly those that can provide greater resources.
We would require States to define conflict of interest standards,
to include criteria that reflect our experience with the issue in
administering HCBS waivers, and that reflect the principles of section
1877 of the Act.
We are aware that in certain areas there may be only one provider
available to serve as both the agent performing independent assessments
and developing plans of care, and the provider of one or more of the
home and community-based services. To address this potential problem we
would propose to permit providers in some cases to serve as both agent
and provider of services, but with guarantees of independence of
function within the provider entity. In certain circumstances, we may
require that States develop ``firewall'' policies, for example,
separating staff that perform assessments and develop plans of care,
from those that provide any of the services in the plan; and meaningful
and accessible procedures for individuals and representatives to appeal
to the State. We would not permit States to circumvent these
requirements by adopting State or local policies that suppress
enrollment of any qualified and willing provider. We do not believe
that under any circumstances determination of eligibility for the State
plan HCBS benefit should be performed by parties with an interest in
providers of HCBS. We invite comment on practical solutions to this
important balance of independence and access.
11. Eligibility Redeterminations; Appeals
Section 1915(i)(1)(I) of the Act requires the State to conduct
redeterminations of eligibility at least annually. We interpret
``annually'' to mean not less than every 12 months. The State must
conduct redeterminations and appeals in the same manner as required
under the State plan. States must grant fair hearings consistent with
the requirements of part 431, subpart E.
12. Option for Presumptive Eligibility for Assessment
Section 1915(i)(1)(J) of the Act gives States the option of
providing for a period of presumptive eligibility, not to exceed 60
days, for individuals the State has reason to believe may be eligible
for the State plan HCBS benefit.
We interpret this provision as follows:
``Presumptive'' we interpret to indicate that medical
assistance will be available for evaluation even when an individual is
subsequently found not to be eligible for the State plan HCBS benefit.
``Eligibility'' does not connote eligibility for Medicaid
generally, as this provision ``shall be limited to medical assistance
for carrying out the independent evaluation and assessment'' under
section 1915(i)(1)(E) of the Act. For clarity, we would refer to this
limited option as ``presumptive payment''. Individuals not eligible for
Medicaid may not receive State plan HCBS.
``Evaluation and assessment'' under section 1915(i)(1)(E)
of the Act, is described as evaluation for eligibility for the benefit
and assessment to determine necessary services. We believe the
statutory phrase ``and if the individual is so eligible, the specific
home and community-based services that the individual will receive'' is
further describing the assessment under section 1915(i)(1)(E) of the
Act for which presumptive payment is available, and that this phrase is
not offering presumptive payment for the actual services.
``Medical assistance'' we interpret to mean FFP for
administration of the approved State plan, as we believe that
determination of eligibility for the State plan HCBS benefit and
assessment of need for specific HCBS are administrative activities of
the Medicaid or single State agency rather than a medical service to
individuals. Even if the evaluation and assessment could be considered
a medical service, none of the services permitted under section 1915(i)
of the Act could be construed to include these activities. ``Medical
assistance'' in this provision would not refer to other Medicaid State
plan services because individuals being considered for eligibility for
the State plan HCBS benefit must be Medicaid eligible and so already
have access to those services. Therefore, we interpret section
1915(i)(1)(J) of the Act to offer the State an option for a period of
presumptive payment, not to exceed 60 days, for Medicaid eligible
individuals the State has reason to believe may be eligible for the
State plan HCBS benefit. FFP would be available as administration of
the approved State plan for evaluation of eligibility for the State
plan HCBS benefit and assessment of need for specific HCBS. During the
period of presumptive payment, the individual would not receive State
plan HCBS, and would not be considered to be enrolled in the State plan
HCBS benefit for purposes of computing the number of individuals being
served under the benefit. We invite comments that offer other
interpretations of this presumptive payment option and comport with
existing Federal requirements.
13. Individual's Representative
When an individual is not capable of giving consent, or requires
assistance in making decisions regarding his or her care, the
individual may be assisted or represented by another person. Section
1915(i)(2) of the Act defines the term ``individual's representative''
by listing certain examples, but also provides that ``* * * any other
individual who is authorized to represent the individual'' [m]ay be
included. We believe that ``authorized'' refers to State rules
concerning guardians, legal representatives, power of attorney, or
persons of other status recognized under State law or under the
policies of the State Medicaid program. States should ensure that such
representatives conform to good practice concerning free choice of the
individual, and assess for abuse or excessive control.
14. Nonapplication
Section 1915(i)(3) of the Act allows States to be exempted from the
requirements of two sections of the Medicaid statute: section
1902(a)(1) of the Act, regarding statewideness; and section
1902(a)(10)(C)(i)(III) of the Act, regarding income and resource rules
for the medically needy in the community. The statute uses the terms
``nonapplication'' and ``may chose not to comply with'' rather than
``waive''. We would use this terminology to maintain clarity between
HCBS waiver programs under section 1915(c) of the Act, and State plan
HCBS under section 1915(i) of the Act. However, these non-applications
apply only with regard to the provision of State plan HCBS. The State
is not exempted from these requirements as they apply to the provision
of any other medical assistance under the plan, or with regard to the
provision of institutional services.
Non-application of the requirement of statewideness allows States
to furnish the State plan HCBS benefit in particular areas of the
State, for
[[Page 18684]]
example, where the need is greatest, or where certain types of
providers are available. States may choose to be exempted from the
requirements of statewideness in order to begin services on a limited
basis, perhaps with a view towards later expansion. If a State intends
to offer the HCBS State plan benefit throughout the State, but
anticipates that services would be phased in as providers and enrollees
are identified, it is not necessary to elect non-application of
statewideness requirements.
Being exempt from the requirements of section
1902(a)(10)(C)(i)(III) of the Act enables States to provide medical
assistance to medically needy individuals in the community by electing
to treat such individuals as if they are living in an institution for
purposes of determining income and resources. This would result in the
State not deeming income and resources from an ineligible spouse to an
applicant or from a parent to a child with a disability.
Section 1915(i)(4) of the Act emphasizes that State election to
provide the State plan HCBS benefit does not in any way affect the
State's ability to offer programs through a section 1915(b) or (c)
waiver, or under section 1115 of the Act.
However, we note that section 1915(c) HCBS waivers may be affected
when a State implements a State plan HCBS benefit if institutional
levels of care are modified to make them more stringent than needs-
based eligibility criteria for the State plan HCBS benefit.
15. Federal Financial Participation for Institutional Level of Care
Shall Continue for Individuals Receiving Services as of the HCBS State
Plan Amendment's Effective Date
If the State modifies institutional level of care requirements so
that they will be more stringent than the needs-based criteria for the
State plan HCBS benefit, Section 1915(i)(5) of the Act provides
protection for individuals who are receiving services in NFs, ICFs/MR,
applicable hospitals or under section 1915(c) or section 1115 HCBS
demonstration projects before the modification. These individuals need
not satisfy the more stringent institutional eligibility criteria. FFP
under the unmodified criteria continues until such time as the
individual is discharged from the institution, waiver program, or
demonstration, or no longer requires this level of care. States may
avoid this requirement and the complications of implementing a dual
institutional level of care process by preserving existing level of
care requirements, and defining the State plan HCBS benefit needs-based
criteria as less stringent than the existing institutional criteria.
B. Effective Date
The effective date on which States may provide HCBS through the
State plan, as set forth by the DRA of 2005 is January 1, 2007.
C. The State Plan HCBS Benefit in the Context of the Medicaid Program
as a Whole
The section 1915(i) State plan HCBS benefit is subject to
provisions of the Medicaid program as a whole. Therefore, it is useful
to note certain requirements of the Medicaid program that have an
impact on the administration of the State plan HCBS benefit.
To be eligible for the State plan HCBS benefit, an individual must
be included in an eligibility group that is contained in the State
plan. Each individual must meet all financial and non-financial
criteria set forth in the plan for the applicable eligibility group.
Section 1902(a)(8) of the Act requires States to furnish Medicaid
services with reasonable promptness to individuals found eligible.
However, under section 1915(i) of the Act, States may place limits on
the number of persons that they would serve via the State plan HCBS
benefit. If a State chooses to set a capacity limit for the State plan
HCBS benefit as permitted in section 1915(i)(1)(C)(ii) of the Act, when
the HCBS benefit reaches capacity, the requirements of reasonable
promptness do not apply, since the option to choose these services is
no longer available to additional individuals. When individuals apply
for the State plan HCBS benefit after the State has reached capacity,
the State would not be required to provide the State plan HCBS to the
individuals, even when they meet otherwise applicable eligibility
criteria.
Children included in eligibility groups under the State plan may
meet the needs-based criteria and qualify for benefits under the State
plan HCBS benefit. HCBS benefits that are not otherwise available under
Medicaid's Early and Periodic Screening, Diagnosis and Treatment
(EPSDT) benefit may be furnished to Medicaid eligible children who meet
the State plan HCBS needs-based eligibility criteria, and who meet the
State's medical necessity criteria for the receipt of services. State
plan HCBS and EPSDT services may be provided concurrently. A mandate
for EPSDT services applies only to services authorized by section
1905(a) of the Act. Therefore, HCBS under section 1915(i) of the Act
are not included in the EPSDT program. Children who are eligible for
the State plan HCBS benefit are eligible to receive medically necessary
State plan HCBS, but the State is not required to provide HCBS as part
of its EPSDT program. States may not reserve or protect ``slots'' for
either adults or children, but must allow all individuals who meet
eligibility and medical necessity criteria equal access to the State
plan HCBS benefit.
Clinic services (whether or not furnished in a facility) for
individuals with chronic mental illness are listed in section
1915(c)(4)(B) of the Act and therefore may be covered in the State plan
HCBS benefit. If a State chooses to offer these services, they will be
subject to the clinic upper payment limit (UPL) at 42 CFR 447.321. We
also note that these services are defined differently than other clinic
services offered under the State Plan in that they include services
whether or not they are offered in a facility.
D. Other Background
1. Comparability and State Control of Costs
Section 1915(i) of the Act contains no provisions for waiving
Medicaid amount, duration, and scope (``comparability'') requirements
described under section 1902(a)(10)(B) of the Act. This provision has
two important implications. First, States may not ``target'' the State
plan HCBS benefit as is permitted with HCBS provided under section
1915(c) of the Act, which does provide the Secretary authority to waive
comparability. Second, without targeting, States may not offer multiple
versions of the State Plan HCBS benefit, each designed to serve
different groups, as is permitted with HCBS waivers. States may design
one State plan HCBS benefit, in which one or any combination of the
permitted services is offered, and which includes needs-based
eligibility and (optionally) service criteria. However, all individuals
who meet the needs-based and other eligibility criteria for the State
plan HCBS benefit must be served in the benefit (up to any limit the
State optionally sets to the number of individuals the benefit will
serve) regardless of how individuals may relate to target groups or
other classifications.
States may assure appropriate utilization of the State plan HCBS
benefit through application of the following provisions of 1915(i).
The requirement to set eligibility standards built on
needs-based criteria. States choose the needs-based criteria used to
establish the thresholds of
[[Page 18685]]
program eligibility. States must set a lower threshold of need, but may
also optionally define an upper threshold of need beyond which
individuals may not be served on the benefit.
Optionally, establishing needs-based criteria to determine
eligibility for each State plan HCBS. These additional criteria may
vary from service to service, and should assist States in identifying
the individuals who could benefit from receipt of a particular State
plan HCBS.
The scope of services that the State chooses to offer may
include any, but need not include all, of the services permitted under
Section 1915(c)(4)(B). States can elect to offer a limited number of
services under the State plan HCBS benefit.
Limits on the amount or duration of each service.
Since all State plan HCBS must be provided under a written
plan of care, States have the opportunity to review an individual's
plan of care to ensure that HCBS continue to be responsive to the needs
of the individual, without being excessive.
General Medicaid requirements apply to the State plan HCBS benefit.
All Medicaid services are to be provided only to those who need them
according to medical necessity as defined by the State. Prior
authorization or other utilization controls methods are available to
the State.
2. HCBS Provided in the Community, Not in Institutions
Home and community-based services are not available in Medicaid-
certified NFs, ICFs/MR, and hospitals, as these institutions are
defined in statute and regulation. HCBS are available in private homes,
apartments, or other non-institutional residential settings. While a
simple definition of ``home and community-based'' would be any
residence other than the three Medicaid certified institutions
referenced above, this definition is insufficient to ensure that
enrollees in this State plan benefit receive services in the type of
setting intended. There are other public and private, large and small,
residences whose character is equally institutional in the experience
of residents. Therefore, we would propose that at the outset of this
new Medicaid benefit, States should distinguish between institutional
and community living arrangements for individuals being evaluated for
enrollment in the State plan HCBS benefit.
Opportunities for independence and community integration in a
variety of alternative living arrangements have been demonstrated for
those receiving HCBS provided under section 1915(c) waivers and section
1115 demonstrations. The new Medicaid State plan HCBS benefit should be
implemented based on those practices, and in the context discussed
previously of the ADA and the Olmstead decision. We recognize that
defining home and community is complex, and invite comments on this
aspect of the proposed rule. We also believe that enough is known about
methods to provide elderly and disabled individuals with housing that
encourages independence and community participation to justify the need
to establish standards around this important issue at the inception of
a new benefit offering HCBS.
We interpret the distinction between ``institutional services'' and
``home or community-based services'' in terms of opportunities for
independence and community integration as well as the size of a
residence. Applicable factors include the resident's ability to control
access to private personal quarters, and the option to furnish and
decorate that area; if the personal quarters are not a private room,
then unscheduled access to private areas for telephone and visitors,
and the option to choose with whom they share their personal living
space; unscheduled access to food and food preparation facilities;
assistance coordinating and arranging for the resident's choice of
community pursuits outside the residence; and the right to assume risk.
Services provided in settings lacking these characteristics, with
scheduled daily routines that reduce personal choice and initiative, or
without personal living spaces, cannot be considered services provided
in the home or community.
We would propose two mechanisms for the State to determine that
residents are residing in the community rather than in an institution.
First, we would require minimum standards, as prescribed by the
Secretary, for community living facilities that take into account the
factors discussed above.
Individuals vary widely in both support needs and preferences, so
that a residence that meets the minimum standards for community living
facilities may be homelike and community-integrated for one individual
but may not be for another individual. While we do not find there to be
any objective criteria, such as numbers of residents, to reliably
distinguish facilities with institutional character from those with
community character, we do believe that it is reasonable to use number
of residents to trigger an assessment of the nature of the residence
for a specific individual. We would therefore additionally propose that
for individuals in larger residential settings there be an
individualized determination that the residence is a community setting
appropriate to the individual's need for independence, choice, and
community integration. We believe that the person-centered assessment
and plan of care required by section 1915(i) of the Act offers an
efficient opportunity for such an individualized assessment of
community residence. Therefore, we would propose to require that for
individuals in residential settings meeting the standards for community
living facilities, that house four or more persons unrelated to the
proprietor and provide one or more services or treatments to the
residents, the person-centered assessment and plan of care must include
a determination that the residence is a community setting appropriate
to the individual's need for independence, choice, and community
integration.
We believe that these two mechanisms will provide States the
flexibility to approve a variety of settings appropriate to the needs
of the individuals served while also maximizing independence and
opportunities for community integration.
For example, we anticipate that States could devise standards
indicating that a residence with multiple independent living units
(apartments) would not be considered to be housing four or more people
together, and would therefore not trigger the requirement for the
assessment to include documentation of community character.
The State plan HCBS benefit may be defined by States to serve
individuals with widely varying degrees of independence. The person-
centered assessment and plan of care will provide flexibility to
approve different types of living arrangements according to need. For
example, if physical or cognitive impairment makes unsupervised access
to some food preparation facilities unsafe, and the person-centered
plan reflects that there must be safeguards against this risk, then
those portions of the kitchen would be made inaccessible when staff is
not present. In this example, barring residents from the home's kitchen
altogether would be an institutional, rather an integrated solution in
all but the rarest of circumstances. A residence in which only the high
risk equipment would be inaccessible when staff are not present, and
the resident would have access to the kitchen, food, and equipment that
does not pose a danger,
[[Page 18686]]
could be approved as a community living arrangement.
While HCBS are not available while an individual resides in an
institution, HCBS should be available to individuals once they leave an
institution. Recognizing that individuals leaving institutions require
assistance to establish themselves in the community, we would allow for
transition services to be claimed after the date of discharge from the
institution. We propose that of the HCBS permitted under section
1915(i) of the Act, case management is the only service that could be
commenced prior to discharge and could be used to assist individuals
during the transition period of institutional residence.
3. HCBS Do Not Provide Room and Board
Payments for room and board are prohibited by section 1915(i)(1) of
the Act. Except for respite care furnished in a facility approved by
the State that is not a private residence, no service or combination of
services may be used to furnish a full nutritional regimen (3 meals a
day) through the State plan HCBS benefit. FFP for State plan HCBS is
not available in the cost of meals that are furnished in alternative
residential facilities in the community, regardless of whether services
(other than respite care) are provided by or through the setting in
which the individual resides.
When an individual must be absent from his or her residence in
order to receive a service authorized by the individualized plan of
care, it may be impractical to obtain a meal outside the venue in which
the service is provided. This may occur during the receipt of facility-
based respite care, adult day care, or site-based habilitation. In
these instances, the individual may be unable to leave the site to
obtain food at mealtime. Therefore, the State plan HCBS provider may
elect to furnish the meal. When meals are furnished as an integral
component of the service, the State may consider the cost of food in
setting the rate it would pay for the State plan HCBS as the cost is
then considered part of the service itself. We would not consider the
meal to be an integral part of the State plan HCBS when two rates are
charged to the public, one that includes a meal and one that does not
include a meal.
II. Provisions of the Proposed Rule
[If you choose to comment on issues in this section, please
indicate the caption ``Provisions of the Proposed Rule'' at the
beginning of your comments.]
To incorporate the policies and implement the statutory provisions
described above, we are proposing the following revisions:
Part 431 (State Organization and General Administration)
In Sec. 431.40, we are proposing to amend paragraph
(a)(7), by adding reference to section 1915(i) of the Act to the scope
of subpart B, as an exception to statewide operation, and correcting
the paragraph to include reference to sections 1915(d) and (e) of the
Act.
In Sec. 431.50, we are proposing to amend paragraph (c)
to include HCBS (under waivers and the State plan) as an exception to
statewide operation.
Part 440 (Services: General Provisions)
In Sec. 440.1, we are proposing to add a reference to a
new statutory basis to read ``1915(i) Home and community-based services
furnished under a State plan to elderly and disabled individuals under
the provisions of part 441, subpart K.''
In Sec. 440.180, we are proposing to revise the heading
``Home or community-based services'' to read ``Home and community-based
waiver services'' to standardize the term ``home and community-based
services'' and clarify that this section concerns only HCBS provided
through 1915(c) waivers.
In part 440 subpart A, we are proposing to add Sec.
440.182, ``State plan home and community-based services'', which would
define a new optional Medicaid service for which FFP is available to
States, as specified in part 441, subpart K.
Section 440.182 (State Plan Home and Community-Based Services Benefit)
In Sec. 440.182(a), we propose that the services authorized in
section 1915(i) of the Act, and meeting the requirements outlined in
proposed subpart K, be known as ``State plan home and community-based
services.'' When referring to the specific service(s) offered under the
State plan HCBS benefit listed in Sec. 440.180(b), we use the term
``State plan HCBS.'' When referring to overall State activities under
section 1915(i) of the Act as described in subpart K, we use the term
``benefit'', or ``State plan HCBS benefit''.
In Sec. 440.182(b) and Sec. 440.182(c)(1), we propose that the
optional State plan HCBS benefit may consist of any or all of the HCBS
listed in section 1915(c)(4) for waiver programs, as specified in
regulation at Sec. 440.180, except for the ``other'' services which
the Secretary has the authority to approve for an HCBS waiver. Because
section 1915(i) of the Act defines services by reference to section
1915(c) of the Act, we believe that the regulatory requirements should
be parallel. Therefore, we list the permitted services for the State
plan HCBS benefit in Sec. 440.182 identically to the services
specified in Sec. 440.180 for HCBS waivers. We further specify that
the conditions set forth in Sec. 440.180(b) for services to
individuals with chronic mental illness, and in Sec. 440.180(c) for
expanded habilitation services, apply to State plan HCBS services. In
particular, due to concern over duplication of habilitation services,
we propose to require at Sec. 441.562(a)(2)(vix) an explanation of the
manner in which nonduplication of services will be documented in the
assessment of each individual receiving habilitation services. Section
1915(i) of the Act prohibits reimbursement for room and board. At Sec.
440.182(c)(2) we define the term ``room'' to mean shelter type
expenses, including all property-related costs such as rental or
purchase of real estate and furnishings, maintenance, utilities, and
related administrative services. The term ``board'' means three meals a
day or any other full nutritional regimen. We propose in Sec.
440.182(c)(2) to require an assurance that the State has a methodology
to prevent claims and ensure that no payment is made for room and board
in State plan HCBS. We propose to specify three types of service costs
involving food and housing that are not considered room and board. We
adopt the existing requirement for HCBS waivers in Sec. 441.310(a)(2),
to permit the cost of food and residence to be claimed for respite
services furnished in State-approved settings that are not private
residences. We clarify that a State may claim FFP for the costs of
meals that are furnished as part of a program of adult day health or a
similar activity conducted outside the participant's living arrangement
on a partial day basis. Finally, we propose that a State may claim FFP
for a portion of the housing expense and food that may be reasonably
attributed as a service cost to compensate an unrelated caregiver
providing State plan HCBS, who is residing in the same household with
the recipient. We propose, as is the policy in HCBS waivers that FFP is
available only for the reasonable additional costs of the caregiver
residing in the recipient's home, not to support the cost of a
caregiver's household in which the recipient resides. We would
therefore provide that FFP not be available for caregiver living costs
when the residence is owned or leased by the caregiver.
[[Page 18687]]
Part 441 (Services: Requirements and Limits Applicable to Specific
Services)
In part 441, ``Requirements and Limits Applicable to Specific
Services,'' we are proposing to add a new subpart K titled ``State Plan
Home and Community-Based Services for Elderly and Disabled
Individuals,'' consisting of Sec. 441.550 through Sec. 441.577, which
describes requirements for providing the State plan HCBS benefit. This
construction parallels that for HCBS waivers, which are the subject of
subpart G of part 441.
In this new subpart, it is necessary in several paragraphs to
indicate that certain provisions apply to an individual or an
individual's representative. To reduce redundancy, we indicate in those
paragraphs that ``individual'' means the eligible individual and, if
applicable, the individual's representative, to the extent of the
representative's authority recognized by the State. ``Individual and
representative'' more accurately convey the person-centered process
than ``individual or representative''. This provision clarifies that
there is no implication that individuals will or will not have
representatives.
Section 441.550 (Basis and Purpose)
We set forth in Sec. 441.550 language to implement the provisions
of section 1915(i) of the Act permitting States to offer HCBS to
qualified elderly and disabled individuals under the State plan. Those
services are listed in Sec. 440.182, and are described by the State,
including any limitations of the services. This optional benefit is
known as the State plan HCBS benefit. This subpart describes what a
State Medicaid plan must provide, and defines State responsibilities.
Section 441.553 (State Plan Requirements)
In Sec. 441.553, we propose that a State plan that includes home
and community-based services for elderly and disabled individuals must
meet the requirements of this subpart. We would require that the State
plan amendment in which the State establishes the State plan HCBS
benefit satisfy the requirements set forth in this proposed regulation.
Section 441.556 (Eligibility for Home and Community-Based Services
Under Section 1915(i)(1) of the Act)
We propose in Sec. 441.556(a)(1) to require that the individual be
eligible for Medicaid under an eligibility group covered under the
State's Medicaid plan. Enrollment in the State plan HCBS does not
confer Medicaid eligibility. In addition to meeting State Medicaid
eligibility requirements, the statute requires that applicants for
State plan HCBS must have income that does not exceed 150 percent of
the Federal Poverty Level (FPL). (The poverty guidelines are updated
periodically in the Federal Register by the U.S. Department of Health
and Human Services under the authority of 42 U.S.C. 9902(2).) We
propose in Sec. 441.556(a)(2) that determinations that the
individual's income does not exceed 150 percent of FPL must be made
using the applicable rules for income eligibility for the individual's
eligibility group, including any more liberal income disregards used by
the State for that group under section 1902(r)(2) of the Act. We see no
authority in the statute for States to choose income limits other than
150 percent of FPL.
To implement the intent of the Congress that the benefit be ``home
and community-based,'' we would require in Sec. 441.556(a)(3) that the
individual reside in the home or community, not in an institution,
according to standards for community living facilities prescribed by
the Secretary. As discussed in section I.D.2., there are a variety of
living arrangements other than a private home or apartment that promote
independence and community integration, as well as arrangements that do
not. We propose that the person-centered assessment and plan of care
required under the State plan HCBS benefit provides an opportunity to
make individualized determinations of community residence. Therefore,
we propose to require that if the individual resides in a setting with
four or more persons unrelated to the proprietor, and which furnishes
one or more services or treatments, the independent assessment must
include documentation that the individual is living in a community
setting, and not in an institution.
We would require in Sec. 441.556(a)(4) that the individual must
meet the needs-based eligibility criteria as set forth in Sec.
441.559. We propose in Sec. 441.556(a)(5) that individuals are not
eligible for the State plan HCBS benefit until they have met all
eligibility requirements, including the need for at least one service
provided under the State plan as part of the HCBS benefit.
We propose in Sec. 441.556(b) that States may elect to follow
institutional income and resource eligibility rules for the medically
needy living in the community. Waiving the requirements of section
1902(a)(10)(C)(i)(III) of the Act allows States to treat medically
needy individuals as if they are living in an institution by not
deeming income and resources from an ineligible family member. We use
the term ``non-application'' instead of ``waive'' as does the statute.
We further propose that States may elect non-application of section
1902(a)(1) of the Act, concerning statewide application of Medicaid,
which permits the State plan HCBS benefit to be offered only in certain
defined geographic areas of the State.
Section 441.559 (Needs-Based Criteria and Evaluation)
The statute uses a number of terms at times interchangeably. We
adopt the wording used most frequently in the law, and specify a term
for each requirement. For example, regarding the terms ``assessment''
and ``evaluation,'' we would adopt the language in section
1915(i)(1)(H)(ii) of the Act, which refers to the ``independent
evaluation'' and the ``independent assessment.''
Needs-based eligibility criteria.
In Sec. 441.559(a), we propose that States establish needs-based
criteria for determining an individual's eligibility under the State
plan for HCBS, and may establish needs-based criteria for each specific
service. We do not define support needs, as we believe that States
should have the flexibility to match eligibility criteria to the nature
of the services they would provide under the HCBS benefit. By statute,
the needs-based criteria would consist of needs for specified types of
support, such as assistance with ADLs, or risk factors defined by the
State. We propose to require that State-defined risk factors affecting
eligibility must be included as needs-based eligibility criteria in the
State plan amendment. While we do not propose requirements for State-
defined risk factors, we believe that as needs-based criteria, risk
factors should be related to support needs, such as availability of
family members or other unpaid caregivers and their willingness and
ability to provide necessary care.
We distinguish support needs from other types of characteristics.
We propose that a distinguishing characteristic of needs-based criteria
is that they can only be ascertained for a given person through an
individual evaluation. This differentiates a targeting criterion such
as a diagnosis, which many individuals may identically share, from a
support need, which will vary widely among those individuals with the
same diagnosis. Also set forth in Sec. 441.559(a) are the examples of
needs-based eligibility criteria and factors to consider that are
supplied in the statute. Section 1915(i) of the Act defines ADLs by
reference to section 7702B(c)(2)(B) of the Internal Revenue Code of
1986. This section of the Internal Revenue Code lists eating,
toileting, transferring, bathing, dressing,
[[Page 18688]]
and continence. This mobility-oriented definition of ADLs is one that
States may consider, meaning that States are free to define criteria in
other domains such as cognitive or behavioral needs for support.
We note that the regulation requires only that the needs-based
criteria for the State plan HCBS benefit establish the lowest threshold
of need to enroll in the benefit. There is an upper limit of need to be
eligible for the HCBS benefit only if the State so specifies in the
needs-based eligibility criteria. The more stringent institutional
criteria required in Sec. 441.559(b) of this section do not constitute
an upper limit of need to be eligible for the State plan HCBS benefit.
The institutional criteria are only a lowest threshold of need to
receive institutional services. We also note that section 1915(i)(1) of
the Act clarifies that State plan HCBS are not required to be direct
alternatives to institutional care. The statute specifically provides
that the State plan HCBS benefit does not need to meet the section
1915(c) requirement that, but for the services provided under the HCBS
waiver, the individual would require institutional care.
More stringent institutional and waiver needs-based
criteria
In Sec. 441.559(b), we propose that the State plan HCBS benefit is
available to a State only if individuals may demonstrate a lower level
of need to obtain State plan HCBS than is required to obtain
institutional or waiver services. States that have functional level of
care criteria for institutions (that meet the requirements in Sec.
441.559(a)(1)), may have no need to modify their existing institutional
criteria so long as the needs-based eligibility criteria established
for State plan HCBS are less stringent. States without need-based
institutional level of care criteria must add need-based requirements
to their level of care assessments in order to establish the State plan
HCBS benefit.
We propose in Sec. 441.559(b) to define by reference to statute
and regulation the institutions for which section 1915(i) of the Act
requires more stringent eligibility criteria. Nursing facility and
intermediate care facilities for the mentally retarded are so cited. We
interpret reference in section 1915(i)(1)(B) of the Act to hospitals to
mean facilities certified by Medicaid as hospitals that are providing
long-term care services or services related to the HCBS to be provided
under the benefit. The proposed regulation requires that States have or
establish for such hospitals (if any), needs based criteria for
admission that are more stringent than those for eligibility in the
State plan HCBS benefit. We further propose, when the State covers more
than one service in the State plan HCBS benefit, to require that any
needs-based criteria for individual HCBS, combined with the needs-based
eligibility criteria for the benefit, must be less stringent than
needs-based eligibility criteria for any related institutional
services. Without this provision, it would be possible for States to
define needs-based eligibility criteria that are less stringent than
those for institutions, but then set each needs-based service criteria
at a more stringent level, effectively requiring all persons served by
the benefit to be at a higher level of need than the statute intends.
In Sec. 441.559(b), we further propose to require that the more
stringent needs-based criteria for institutions and waivers be part of
the State's level of care processes, to ensure that the criteria are
uniformly utilized. We would require that these more-stringent needs-
based criteria be submitted for comparison with the State plan
amendment that establishes the State plan HCBS benefit. We note that
needs-based criteria, as defined in Sec. 441.559(a) require an
evaluation to determine the individual's support needs. Therefore, the
assessment process for institutional levels of care that include needs-
based criteria must include an individual evaluation of support needs.
We also propose to require that the State's more stringent
institutional and waiver needs-based criteria be in effect on or before
the effective date of the State plan HCBS benefit.
Finally, in Sec. 441.559(b)(2), we propose that if States modify
their institutional levels of care in order to satisfy the requirement
that the levels of care be more stringent than the needs-based
eligibility criteria for the State plan HCBS benefit, individuals
receiving institutional and waiver services as of the date that more
stringent eligibility criteria for those services become effective,
would not be subject to the more stringent criteria. Exemption from the
more stringent criteria is indefinite, but ends when the individual is
discharged from the facility or waiver, or the individual no longer
meets the criteria for the applicable level of care. We note that in
long-term care facilities a transfer is not a discharge and would not
cause the individual to lose this exemption. States would determine the
effect of any subsequent changes to general level of care requirements
(unrelated to the more stringent criteria) upon individuals with this
exemption.
Adjustment authority
In Sec. 441.559(c), we propose to permit States under certain
conditions to adjust, without prior approval from the Secretary, the
needs-based eligibility criteria and service criteria (if any)
established under Sec. 441.559(a), in the event that the State
experiences enrollment in excess of the number projected to be served
by the HCBS benefit. We propose a retroactive effective date, as
approved by the Secretary, for the State plan amendment modifying the
needs-based criteria under Sec. 441.559(c)(1). We set forth the
following conditions required by the statute.
The State must provide for at least 60 days notice to the
Secretary, the public, and we would add, each enrollee. Since the
effect of adjusted criteria would be to reduce the scope of services,
eligibility for services, or eligibility for the entire State plan HCBS
benefit, the adjusted criteria would not apply to individuals already
enrolled in the State plan HCBS benefit for at least 12 months from
inception of such services, and we would add, for the additional length
of the required minimum 60 day notification period. If the State also
adjusts institutional levels of care, the adjusted institutional levels
of care may not be less stringent than the institutional level of care
prior to the effective date of the State plan HCBS benefit.
In Sec. 441.559(c), we further propose to require explicitly that
the adjusted needs-based eligibility criteria for the State plan HCBS
benefit must be less stringent than all needs-based institutional level
of care criteria in effect at the time of the adjustment.
We propose that the notice to the Secretary be submitted as a State
plan amendment. In order to implement the adjustment authority without
prior approval of the Secretary, the Secretary would approve a State
plan amendment adjusting the needs-based HCBS benefit eligibility
criteria with a retroactive effective date, as early as 60 days after
the State notified each enrollee, the Secretary, and the public, (or
whichever is later). Under the provision of section 1915(i)(1)(D)(ii)
of the Act, the Secretary will evaluate the State's adjusted criteria
for compliance with the provisions of this paragraph and subpart K. We
also note that while the State may under this provision implement the
adjusted criteria as early as 60 days after notification and before the
State plan amendment is retroactively approved, the State is at risk
for any actions it takes that are later disapproved.
Finally, we would require that the State notify affected
individuals of their right to a fair hearing according to 42 CFR part
431, subpart E.
[[Page 18689]]
Independent evaluation and determination of eligibility
In Sec. 441.559(d), we propose that eligibility for the State plan
HCBS benefit be determined by an independent evaluation of each
individual, applying the general eligibility requirements in Sec.
441.556 of this subpart, and the needs-based criteria that the State
has established under Sec. 441.559(a). Independence of the review
requires meeting the conflict of interest standards set forth in Sec.
441.568, where provider qualifications for evaluators are specified.
The evaluation must assess an individual's support needs and
strengths. We interpret this provision of the statute to indicate that
the evaluation process draws conclusions about supports that the
individual requires because of age or disability, and supports that the
individual does not require because of abilities to perform those
functions independently. The evaluation compares those conclusions with
the needs-based eligibility criteria for the State plan HCBS benefit to
determine eligibility for the benefit. Section 1915(i)(1)(D)(i) of the
Act provides that the State may take into account the need for
significant assistance to perform ADLs, indicating that the statute
does not require that eligibility be dependent upon lack of natural
supports.
We note that appraisal of whether an individual has medical
necessity for, and meets additional needs-based criteria (if any) for
specific HCBS offered under the benefit, is part of the independent
assessment and plan of care development process. However, this
assessment affects eligibility for the benefit in that we propose at
Sec. 441.562 that individuals are considered enrolled in the State
plan HCBS benefit only if they are assessed to require at least one
home and community-based service offered under the State plan benefit
in addition to meeting the eligibility and needs-based criteria for the
benefit.
The evaluation process designed by the State would reflect the
nature of the State plan HCBS benefit designed by the State. However,
in order to meet the forgoing requirements, all independent evaluations
require specific information about each individual's support needs,
sufficient to draw the appropriate conclusions. In some cases this
information may be well documented and current in the individual's
existing records. In other cases, we would require that the evaluator
obtain this information by whatever means are appropriate to secure a
valid appraisal of the individual's current needs. This requirement
could include professional assessment of certain functional abilities.
State evaluation procedures that rely solely on review of medical
records would not meet these requirements.
Periodic redetermination
In Sec. 441.559(e), we propose that individuals receiving the
State plan HCBS benefit must be reevaluated at a frequency defined by
the State, but not less than every 12 months, to determine whether the
individuals continue to meet eligibility requirements. The independent
reevaluations must meet the requirements for initial independent
evaluations specified in Sec. 441.559(d).
Section 441.562 (Independent Assessment)
In Sec. 441.562, we propose requirements for independent
assessment of need of each individual who has been determined by the
independent evaluation to be eligible for the State plan HCBS benefit.
The purpose of the assessment is to obtain, in combination with the
findings of the independent eligibility evaluation, all the information
necessary to establish a plan of care. The assessment is based on the
needs of the individual, which we believe precludes assessment
protocols that primarily determine diagnoses, or only assess function.
Assessment protocols must not assign supports automatically by
functional limitation. The independent assessment must determine the
specific supports needed to address the individual's unique
circumstances and needs.
The assessment also applies the State's needs-based criteria for
each service (if any). We propose that an individual be considered
enrolled in the State plan HCBS benefit only if the assessment finds
that the individual needs and meets the needs-based criteria (if any)
for, at least one State plan HCBS. This proposed requirement is to
provide States with a mechanism to prevent the situation of an
individual being eligible for the State plan HCBS benefit but not able
to receive any of the services it offers. Such a circumstance would,
among other problems, be of no utility to the individual, may make it
difficult for the State to meet an assessed need, and would count
towards the maximum number of individuals the State could serve, using
up a ``slot'' for no purpose.
We make clear that the assessment must include an objective
evaluation of the individual's inability to perform two or more
activities of daily living (ADL) as defined in the Internal Revenue
Code of 1986, or need for significant assistance to perform ADLs. We
interpret the statutory term ``objective'' to require an accepted
method of measuring functioning appropriate to the ADL.
We propose to require in Sec. 441.562(a)(2) that the assessment
include a face-to-face meeting with the individual (``individual''
meaning in this context, if applicable, the individual and the
individual's authorized representative). In Sec. 441.562(a)(2)(i), we
propose to require that the assessment is performed by an agent that is
independent and qualified as defined in Sec. 441.568. The assessment
is to be guided by best practice and research on effective strategies
that result in improved health and quality of life outcomes. We further
propose that the assessment includes consultation, as appropriate, with
other responsible parties. The assessment must include an examination
of the individual's relevant history, medical records, and care and
support needs, including the findings from the independent eligibility
evaluation.
If self-direction of services is offered by the State and elected
by the individual, the independent assessment must include a self-
direction appraisal as described in Sec. 441.574.
We propose documentation requirements in the assessment to address
two specific circumstances. For individuals living in a residence with
four or more persons unrelated to the proprietor, that furnishes one or
more treatments or services and meets the criteria listed in paragraph
(a)(3) of Sec. 441.556, we propose that the assessment must include
documentation that the individual is living in a community setting, and
not in an institution.
For individuals receiving habilitation services, we propose to
require documentation that no services are provided under Medicaid that
would otherwise be available to the individual, specifically including
but not limited to services available to the individual through a
program funded under section 110 of the Rehabilitation Act of 1973, or
the Individuals with Disabilities Improvement Act of 2004. We believe
that these documentation requirements would provide a clear method for
States to comply with Federal requirements, focus only on the
individuals for whom these circumstances could apply, and would not add
significantly to the burden of the assessment.
Finally, in Sec. 441.562(b), we propose to require that the
independent assessment of need is conducted at least every 12 months
and as needed when the individual's needs and circumstances change
significantly, in order to revise the plan of care.
[[Page 18690]]
Section 441.565 (Plan of Care)
In Sec. 441.565 we propose to require that based on the
independent assessment specified in Sec. 441.562, the State develops
(or approves, if the plan is developed by others) a plan of care
through a person-centered planning process. Section
1915(i)(1)(G)(iii)(III)(dd) of the Act requires a person-centered
approach to establishing a plan of care for an individual
(``individual'' meaning in this context, if applicable, the individual
and the individual's authorized representative) electing to direct his
or her own services. We propose to require that person-centered
principles guide all plans of care for the State plan HCBS benefit.
We propose that the plan of care must be developed jointly with the
individual. While we propose several specific requirements for the
process of developing a plan of care, we note that the intent of these
requirements is to ensure a process with shared authority between the
individual and the agency or agent. To achieve this intent, States must
affirmatively and creatively work to establish such shared authority.
The assessment must include consultation with appropriate persons.
Definition of appropriate persons would be determined in each case, and
while we include examples, we do not propose any required or excluded
category of persons to consult. When the plan of care is finalized
between the parties, a written copy is provided to the individual.
Also, in Sec. 441.565(a), we propose certain content to be
required in the plan of care. The plan of care must identify the
specific State plan HCBS to be provided to the individual, that take
into account the individual's strengths, preferences, and desired
outcomes, as well as support needs arising from the individual's
disability. In the planning process, the degree of assistance with ADLS
available to the individual outside of the State plan HCBS benefit may
be taken into account in planning the scope and frequency of HCBS to be
provided. Thus, the plan of care provides for all needed services to
the individual while preventing provision of unnecessary services.
We propose a single plan of care for both self-directed and non
self-directed services. When an individual self-directs some or all of
their HCBS, the plan of care includes the information required in Sec.
441.574.
We further propose to require that the plan of care be reviewed and
revised at least every 12 months, and as needed when the individual's
circumstances or needs change significantly.
Section 441.568 (Provider Qualifications)
In Sec. 441.568, we propose to require that the State provide
assurance that necessary safeguards have been taken to protect the
health and welfare of the enrollees in State plan HCBS by provision of
adequate standards for all types of providers of HCBS. States must
define qualifications for providers of HCBS services, and for those
persons who conduct independent evaluation of eligibility for State
plan HCBS, independent assessment of need, and are involved with
developing the plan of care.
We propose at Sec. 441.568(b) and (c) to require minimum
qualifications for individuals and agencies who conduct independent
evaluation of eligibility for State plan HCBS, independent assessment
of need, and are involved with developing the plan of care. We will
refer to these individuals and entities involved with determining
access to care as ``agents'' to distinguish this role from providers of
services. We believe that these qualifications are important safeguards
for individuals enrolled in the State plan HCBS benefit and propose
that they be required whether activities of the agents are provided as
an administrative activity or whether some of the activities are
provided as a Medicaid service. At a minimum, these qualifications
include conflict of interest standards, and for providers of assessment
and plan of care development, these qualifications must include
training in assessment of individuals whose physical or mental
condition may trigger a need for home and community-based services and
supports, and an ongoing knowledge of current best practices to improve
health and quality of life outcomes.
The minimum conflict of interest standards we propose to require
ensure that the provider is not a relative of the individual or
responsible for the individual's finances or health-related decisions.
Relatives and decision makers are required to be permitted in the
assessment and planning process, as appropriate, but we do not see any
necessity or value in family members being responsible for evaluation,
assessment, or planning. Our experience with HCBS in waivers indicates
that assessment and plan of care development should not be performed by
providers of the services prescribed. However, we recognize, as
discussed in Section I., that in some circumstances there are
acceptable reasons for a single provider of service that performs all
of those functions. In this case, the Secretary would require the State
Plan to include provisions assuring separation of functions within the
provider entity.
Section 441.571 (Definition of Individual's Representative)
In Sec. 441.571, we propose to define the term ``individual's
representative'' to encompass any party that is authorized to represent
the individual for the purpose of making personal or health care
decisions, either under State law or under the policies of the State
Medicaid agency. We do not propose to regulate the relationship between
an individual enrolled in the State plan HCBS benefit and his or her
authorized representative, but note that States should have policies to
assess for abuse or excessive control and ensure that representatives
conform to applicable State requirements.
Section 441.574 (Self-Directed Services)
We propose in Sec. 441.574 to permit States to offer an election
for self-directing HCBS. In Sec. 441.574(a), we would define ``self-
direction.'' Provisions related to self-direction apply to an
individual or an individual's representative. In Sec. 441.574(b), we
propose that when an individual chooses self-direction, the independent
assessment and person-centered planning required under Sec. Sec.
441.562 and 441.565 would include examination of the support needs of
the individual to self-direct the purchase of, or control the receipt
of, such services. The evaluation should not reject election to self-
direct based solely on the individual's disability or a manifestation
of his or her disability. We therefore propose to require that the
evaluation for self-direction result in a determination of ability to
self-direct both with and without specified supports.
We propose regulations containing the specific requirements for
self-direction found in section 1915(i)(1)(G)(iii) of the Act. These
regulations are consistent with our policy for self-direction under
section 1915(c) HCBS waivers. We propose to require in Sec. 441.574(b)
that the plan of care indicate the HCBS to be self-directed and the
methods by which the individual will plan, direct, or control the
services; the role of family or others who will participate in the
HCBS; and risk management techniques. Our experience with HCBS waivers
indicates that contingency plans are an important protection for the
individual, in the absence of an agency that would otherwise be
responsible for absent workers or other common problems.
[[Page 18691]]
Contingency plans are most effective when designed for the unique
circumstances of each self-directing individual. We propose that the
plan of care describe the process for facilitating voluntary and
involuntary transition from self-direction. When the plan of care is
finalized between the parties, a written copy is provided to the
individual, as required in Sec. 441.565(a).
In Sec. 441.574(c) and (d), we define self-direction of services
in terms of employer authority and budget authority, as we have with
self-directed HCBS in Medicaid section 1915(c) waivers. In Sec.
441.574(c), employer authority is defined as the ability to select,
manage, or dismiss providers of the State plan HCBS. We propose that
the plan of care must specify the authority to be assumed by the
individual and the individual's representative, any parties responsible
for functions outside the assumed authority, and the financial
management supports to be provided as required in Sec. 441.574(e).
In Sec. 441.574(d), we propose to define budget authority as an
individualized budget which identifies the dollar value of the services
and supports under the control and direction of the individual. We
propose that the plan of care must specify the method for calculating
the dollar values in the budget, a process for adjusting the budget to
reflect changes in assessment and plan of care, a procedure to evaluate
expenditures under the budget, and the financial management supports,
as required in Sec. 441.574(e), to be provided. We clarify here that
while budget authority grants control of expenditures to the
individual, it does not include performing the transactions or
conveying cash to the individual or representative.
In Sec. 441.574(e), we propose to define functions in support of
self-direction that the State must offer, based on our experience with
self-directed HCBS in section 1915(c) waivers and section 1115
demonstrations. These provisions are required in order to equip
individuals for success in managing their services, and to comply with
Federal, State, and local requirements, particularly the many tax,
labor, and insurance issues that arise when the self-directing
individual is the employer of record. Supports for self-direction
should provide the technical expertise and business functions that will
free individuals to exercise choice and control over their experience
of the HCBS provided to them.
Section 441.577 (State Plan HCBS Administration: State Responsibilities
and Quality Improvement)
State responsibilities.
We would require in Sec. 441.577(a)(1)(i) that the State annually
provide CMS with the projected number of individuals to be enrolled in
the benefit, and the actual number of unduplicated individuals enrolled
in the State plan HCBS benefit in the previous year. States may choose
to limit the number to be served at any point in time, as provided in
Sec. 441.577(a)(1)(ii). If the State so chooses, we propose that it
would also provide annually to CMS the maximum number enrolled at one
time.
In Sec. 441.577(a)(1)(ii) we propose that a State may elect to set
a limit on the number of individuals enrolled in the State plan HCBS
benefit, either as an annual limit or as limit at any one point in
time. The State must establish or adjust the limit by amending the
State plan. The State may, but is not required to, establish a waiting
list. States must consider many legal requirements and competing
demands in establishing waiting list policy, including the Americans
with Disabilities Act (ADA). We do not specify waiting list
requirements, but propose to require that if a State elects to maintain
a waiting list, it must do so with written and publicly published
policies to ensure fairness and consistency. The public should have
opportunity for notice and comment on this important limitation to
access. We propose to require a formally established schedule and
procedure for reevaluation and revision to waiting list policy. We also
would require assurance that States will adhere to all applicable
Federal and State requirements. For example, individuals who may be
denied access to services would have all rights required under 42 CFR
part 431, subpart E.
Because section 1915(i) of the Act does not authorize waiver of
comparability requirements, we clarify in Sec. 441.577(a)(1)(iii) that
the State may not limit enrollee access to services in the benefit for
any reason other than assessed need, including limits based on type of
disability or other targeting, or limiting the number of persons
receiving particular services. This is an important distinction between
the limits States place on the services to be offered when they design
the benefit, as opposed to limiting access to the services that are in
the benefit for particular enrolled individuals. As discussed in
Section I.D.1 above, States have a number of permitted methods to
control utilization by placing limits on the overall benefit and
particular services offered. We propose that once an individual is
found eligible and enrolled in the benefit, access to offered services
can only be limited by medical necessity. Medical necessity in the
State plan HCBS benefit is determined by the independent assessment and
person-centered plan of care. By not limiting access, we mean that an
enrollee must receive any or all of the HCBS offered by the benefit, in
scope and frequency up to any limits on those services defined in the
State plan, to the degree the enrollee is determined to need them.
Enrollees should receive no more, and no fewer, services than they are
determined to require. We note that one function of the plan of care as
proposed at Sec. 441.565(a)(3) is to prevent the provision of
unnecessary or inappropriate care.
Administration.
We propose in Sec. 441.577(a)(2)(i) an option for presumptive
payment. The State may provide for a period of presumptive payment, not
to exceed 60 days, for evaluation of eligibility for the State plan
HCBS benefit and assessment of need for HCBS. This period of
presumptive payment would be available for individuals who have been
determined to be Medicaid eligible, and whom the State has reason to
believe may be eligible for the State plan HCBS benefit. We propose
that FFP would be available for evaluation and assessment as
administration of the approved State plan prior to an individual's
determination of eligibility for and receipt of other 1915(i) services.
If the individual is found not eligible for the State plan HCBS
benefit, the State may claim the evaluation and assessment as
administration, even though the individual would not be considered to
have participated in the benefit for purposes of determining the annual
number of individuals served by the benefit. FFP would not be available
during this presumptive period for receipt of State plan HCBS.
In Sec. 441.577(a)(2)(ii), we propose that a State plan amendment
submitted to establish the State plan HCBS benefit must include a
reimbursement methodology for each covered service. In some States,
reimbursement methods for self-directed services may differ from the
same service provided without self-direction. In such cases, the
reimbursement methodology for the self-directed services must also be
described.
In Sec. 441.577(a)(2)(iii), we propose that the State Medicaid
agency describe the line of authority for operating the State plan HCBS
benefit. The State plan HCBS benefit requires several functions
[[Page 18692]]
to be performed in addition to the service(s) provided, such as
eligibility evaluation, assessment, and developing a plan of care. To
the extent that the State Medicaid agency delegates these functions to
other entities, we propose that the agency describe the methods by
which it will retain oversight and responsibility for those activities,
and for the operation and quality improvement of the benefit as a
whole.
Quality improvement strategy.
We propose in Sec. 441.577(b) the guidelines for quality assurance
required in the statute at section 1915(i)(1)(H)(i) of the Act. We
propose to require a State to maintain a quality improvement strategy
for its State plan HCBS benefit. The State's quality improvement
strategy should reflect the nature and scope of the benefit the State
will provide.
As discussed in section I of this preamble, section 6086(a) of the
DRA established section 1915(i) of the Act, the optional State plan
HCBS benefit. Section 6086(b), Quality of Care Measures, sets forth
requirements for the Secretary to develop through the Agency for
Healthcare Research and Quality (AHRQ) indicators and measures for
program performance and quality of care to assess HCBS at the State and
national level, and service outcomes, particularly regarding health and
welfare of recipients. Likewise, we propose that measures in the State
quality improvement strategy consist of indicators for program
performance and quality of care as approved and prescribed by the
Secretary, and applicable to the nature of the benefit.
In Sec. 441.577(b)(2), we propose to require States to have
program performance measures, appropriate to the scope of the benefit,
designed to assess the State's overall system for providing HCBS.
In Sec. 441.577(b)(3), we propose to require States to have
quality of care measures as approved or prescribed by the Secretary
that may be used to assess individual outcomes of participants in home
and community-based services, such as client function indicators and
measures of client satisfaction. Outcome measures may be reflective of
the design and scope of the benefit and the specific HCBS provided.
III. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the ``DATES'' section of this
preamble, and, when we proceed with a subsequent document, we will
respond to the comments in the preamble to that document.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements:
Section 441.559 Needs-Based Criteria and Evaluation
Section 441.559(a) requires a State to establish needs-based
criteria for determining an individual's eligibility under the State
plan for the HCBS benefit, and may establish needs-based criteria for
each specific service.
The burden associated with this requirement is the time and effort
put forth by the State to establish such criteria. We estimate it would
take 1 State 24 hours to meet this requirement. We estimate that on an
annual basis, 3 States will submit a State plan amendment to offer the
State plan HCBS benefit, and be affected by this requirement;
therefore, the total annual burden hours for this requirement is 72
hours. This would be a one-time burden.
Section 441.559(c) reads that a State may modify the needs-based
criteria established under paragraph (a) of this section, without prior
approval from the Secretary, if the number of individuals enrolled in
the State plan HCBS benefit exceeds the projected number submitted
annually to CMS.
Section 441.559(c)(1) requires the State to provide at least 60
days' notice of the proposed modification to the Secretary, the public,
and each individual enrolled in the State plan HCBS benefit. The State
notice to the Secretary will be considered an amendment to the State
plan.
Section 441.559(c)(2) reads that the State may under this provision
implement the adjusted criteria as early as 60 days after submitting
the State plan amendment and notifying all required parties.
The burden associated with the requirements found under 441.559(c)
is the time and effort put forth by the State to modify the needs-based
criteria and provide notification of the proposed modification to the
Secretary. We estimate it would take 1 State 24 hours to make the
modifications and provide notification. This would be a one-time
burden. The total annual burden of these requirements would vary
according to the number of States who choose to modify their needs-
based criteria. We do not expect any States to make this modification
in the next 3 years.
Section 441.559(d) states that eligibility for the State plan HCBS
benefit is determined, for individuals who meet the requirements of
441.556(a)(1) through (3), through an independent evaluation of each
individual that meets the specified requirements. Section 441.559(d)(5)
requires the evaluator to obtain information from existing records, and
when documentation is not current and accurate, obtain any additional
information necessary to draw a valid conclusion about the individual's
support needs. Section 441.559(e) requires at least annual
reevaluations.
The burden associated with this requirement is the time and effort
put forth by the evaluator to obtain information to support their
conclusion. We estimate it would take one evaluator 2 hours per
participant to obtain information as necessary. The total annual burden
of this requirement would vary according to the number of participants
in each State who may require and be eligible for home and community-
based services under the State plan.
Section 441.562 requires the State to provide for an independent
assessment of need in order to establish a plan of care. At a minimum,
the plan must meet the requirements as discussed under 441.565.
Section 441.568 requires the State to define in writing adequate
standards for providers of HCBS services and for providers conducting
independent evaluation, independent assessment, and plan of care
development.
While the burden associated with the requirements under Sec. Sec.
441.562 and 441.568 is subject to the PRA, we
[[Page 18693]]
believe the burden is exempt as defined in 5 CFR 1320.3(b)(2) because
the time, effort, and financial resources necessary to comply with this
requirement would be incurred by persons in the normal course of their
activities.
Section 441.574 Self-Directed Services
Section 441.574 reads that a State may choose to offer an election
for self-directing HCBS.
The burden associated with this requirement is the time and effort
put forth by the State to elect for self-directing HCBS. We estimate it
would take one State 5 hours to meet this requirement; therefore, if
all of the States and territories estimated to apply for State plan
HCBS on an annual basis (3) chose to offer an election for self-
directing HCBS the total annual burden would be 15 hours. This would be
a one-time burden.
Section 441.577 State Plan HCBS Administration: State Responsibilities
and Quality Improvement
Section 441.577(a)(1)(i) reads that a State will annually provide
CMS with the projected number of individuals to be enrolled in the
benefit, and the actual number of unduplicated individuals enrolled in
State plan HCBS in the previous year. If the State chooses to limit the
number to be served at any point in time, as provided in Sec.
441.577(a)(1)(ii), the State will annually provide to CMS the maximum
number enrolled at one time.
The burden associated with this requirement is the time and effort
put forth by the State to annually project the number of individuals
who will enroll in State plan HCBS. We estimate it will take one State
2 hours to meet this requirement. The total annual burden of these
requirements would vary according to the number of States offering the
State plan HCBS benefit. The maximum total annual burden is 112 hours
(56 States x 2 hours = 112 hours).
Section 441.577(a)(1)(ii)(B) reads that if a State elects to
maintain a waiting list for State plan HCBS, the State establishes and
adheres to policies and procedures for formation and maintenance of a
waiting list that complies with all applicable Federal and State
requirements.
While this burden associated with this requirement is subject to
the PRA, we believe the burden is exempt as defined in 5 CFR
1320.3(b)(2) because the time, effort, and financial resources
necessary to comply with this requirement would be incurred by persons
in the normal course of their activities.
Section 441.577(a)(2)(ii) reads that the State plan amendment to
provide State plan HCBS must contain a description of the reimbursement
methodology for each covered service.
The burden associated with this requirement is the time and effort
put forth by the State to describe the reimbursement methodology for
each State plan HCBS. We estimate that it will take one State an
average of 2 hours to determine the reimbursement methodology for one
covered HCBS. This would be a one-time burden. The total annual burden
for this requirement would vary according to the number of services
that the State chooses to include in the State plan HCBS benefit.
Section 441.577(a)(2)(iii) reads that the State plan amendment to
provide State plan HCBS must contain a description of the State
Medicaid agency line of authority for operating the State plan HCBS
benefit, including distribution of functions to other entities.
The burden associated with this requirement is the time and effort
put forth by the State to describe the State Medicaid agency line of
authority. We estimate it will take one State 2 hours to meet this
requirement. Since we have estimated that 3 States will annually
request State plan HCBS, the total annual burden associated with this
requirement is estimated to be 6 hours. This would be a one-time
burden.
Section 441.577(b)(1) requires States to maintain a quality
improvement strategy that includes methods for ongoing measurement of
program performance and mechanisms of intervention to assure quality of
care, proportionate to the scope of services in the State plan HCBS
benefit, the needs-based criteria, and the number of individuals to be
served.
The burden associated with this requirement is the time and effort
put forth by the State to prepare and maintain a quality improvement
strategy. We estimate it will take one State 45 hours for the
preparation and maintenance of the strategy. The total annual burden of
these requirements would vary according to the number of States
offering the State plan HCBS benefit. The maximum total annual burden
is estimated to be 2,520 hours (56 States x 45 hours = 2,520 hours).
We have submitted a copy of this proposed rule to OMB for its
review of the information collection requirements described above.
These requirements are not effective until they have been approved by
OMB.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
2. Mail copies to the address specified in the ADDRESSES section of
this proposed rule and to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Room 10235, New Executive
Office Building, Washington, DC 20503, Attn: Carolyn Lovett, CMS Desk
Officer, CMS-2249-P, [email protected]. Fax (202) 395-6974.
V. Regulatory Impact Analysis
[If you choose to comment on issues in this section, please
indicate the caption ``Regulatory Impact'' at the beginning of your
comments.]
A. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on
Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866, as amended, directs agencies to identify the
specific market failure or other problem that warrants agency action,
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
We estimate that, adjusted for a phase-in period during which States
gradually elect to offer the State plan HCBS benefit, in fiscal year
2009 the estimated cost would be $114 million. The estimated 5-year (FY
2007 through FY 2011) cost of this proposed rule would be $563 million.
Therefore, we estimate that this rulemaking is ``economically
significant'' as measured by the $100 million standard, and hence also
a major rule under the Congressional Review Act. Accordingly, we have
prepared a Regulatory Impact Analysis.
The RFA requires agencies to analyze options for regulatory relief
of small businesses if a rule would have a
[[Page 18694]]
significant impact on a substantial number of small businesses or small
entities. For purposes of the RFA, small entities include small
businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6.5 million to $31.5 million in any 1 year. Individuals and States are
not included in the definition of a small entity. This rule imposes no
requirements or costs on providers or suppliers for their existing
activities. The rule implements a new optional State plan benefit
established in section 1915(i) of the Act. Small entities that meet
provider qualifications and choose to provide HCBS under the State plan
would have a business opportunity under this proposed rule. The
Secretary certifies that this proposed rule would not have a
significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Core-Based
Statistical Area and has fewer than 100 beds. We have determined that
this proposed rule would not have a significant effect on the
operations of a substantial number of small rural hospitals because
there would be no change in the administration of the provisions
related to small rural hospitals. Therefore, the Secretary has
determined that this proposed rule would not have a significant impact
on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $127 million. This proposed rule does
not mandate any spending by State, local, or tribal governments or the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. Since this regulation does not impose any costs on State
or local governments, the requirements of E.O. 13132 are not
applicable.
B. Anticipated Effects
1. Effects on Medicaid Beneficiaries
The Medicaid beneficiaries who receive the State plan HCBS benefit
will be substantial and beneficial. The State plan HCBS benefit will
afford business opportunity for providers of the HCBS.
2. Effects on Other Providers
We do not anticipate any effects on other providers. Section
1915(i) of the Act delinks the HCBS from institutional level of care,
and requires that eligibility criteria for the benefit include a
threshold of need less than that for institutional level of care, so
that it is unlikely that large numbers of participants in the State
plan HCBS benefit will be discharged from the facilities of Medicaid
institutional providers. There may be some redistribution of services
among providers of existing non-institutional Medicaid services into
State plan HCBS, but providers who meet qualifications for the State
plan HCBS benefit have the option to enroll as providers of HCBS.
3. Effects on the Medicare and Medicaid Programs
This rule has no effect on the Medicare program. State Medicaid
programs will make use of the optional flexibility afforded by the
State plan HCBS benefit to provide needed long-term care home and
community based services to eligible elderly or disabled individuals
the State has not had means to serve previously, or to provide services
to these individuals more efficiently and effectively. The State plan
HCBS benefit will afford States a new means to comply with requirements
of the Olmstead decision, to serve individuals in the least restrictive
setting.
The cost of these services will be dependent upon the number of
States electing to offer the benefit, the scope of the benefits States
design, and the degree to which the benefits replace existing Medicaid
services. States have more control over expenditures for this benefit
than over other State plan services. For States that choose to offer
these services, States may specify limits to the scope of HCBS, cap the
number of recipients, and have the option to tighten eligibility
requirements if costs escalate too rapidly.
Use of the State plan HCBS benefit is unlikely to result in
increased access to other Medicaid services, because eligibility for
the benefit is limited to individuals who are already eligible for
Medicaid, and whose income is less than 150 percent of the FPL.
Moreover, costs of the State plan HCBS benefit may be offset by lowered
potential Federal and State costs of more expensive institutional care.
Additionally, the requirement for a written individualized plan of care
may discourage inappropriate utilization of costly services such as
emergency room care for routine procedures.
After taking the above factors into account, the Federal and State
cost estimates are shown in the table below.
Medicaid Cost Estimate
[In millions]
----------------------------------------------------------------------------------------------------------------
5-year
FY08 FY09 FY10 FY11 FY12 total
----------------------------------------------------------------------------------------------------------------
Federal Cost.................................. $68 $114 $169 $189 $210 $750
State Cost.................................... 51 86 127 142 159 565
----------------------------------------------------------------------------------------------------------------
C. Alternatives Considered
This proposed rule incorporates provisions of new section 1915(i)
of the Act into Federal regulations, providing for Medicaid coverage of
a new optional State plan benefit to furnish home and community-based
State plan services. The statute provides States with an option under
which to draw Federal matching funds; it does not impose any
requirements or costs on existing State programs, on providers, or upon
beneficiaries. States retain their existing authority to offer HCBS
through the existing authority granted under section 1915(c) waivers
and under section 1115 waivers. States can also continue to
[[Page 18695]]
offer, and individuals can choose to receive, some but not all
components of HCBS allowable under section 1915(i) through existing
State plan services such as personal care or targeted case management
services. Therefore, this rule is entirely optional for States.
Alternatives to this rule as proposed include:
1. Not Publishing a Rule
Section 1915(i) of the Act is effective January 1, 2007. States may
propose State plan amendments to establish the State plan HCBS benefit
with or without this proposed rule. We considered whether this statute
could be self-implementing and require no regulation. Section 1915(i)
of the Act is complex; many States have contacted us for technical
assistance in the absence of published guidance, and some have
indicated they are waiting to submit an amendment until there is a
rule. We further considered whether a State Medicaid Director letter
would provide sufficient guidance regarding CMS review criteria for
approval of a State plan amendment. We conclude that section 1915(i) of
the Act establishes significant new features in the Medicaid program,
and that States and the public should be afforded the published
invitation for comment provided by this proposed rule. Finally, State
legislation and judicial decisions are not alternatives to a Federal
rule in this case since section 1915(i) of the Act provides Federal
benefits.
2. Modification of Existing Rules
We considered modifying existing regulations at 42 CFR 440.180,
part 441 subpart G, Home And Community-Based Services: Waiver
Requirements, which implement the section 1915(c) HCBS waivers, to
include the authority to offer the State plan HCBS benefit. This would
have the advantage of not duplicating definitions of HCBS and certain
requirements common to both types of HCBS. However, we believe that any
such efficiency would be outweighed by the substantial discussion that
would be required of the differences between the Secretary's discretion
to approve waivers under section 1915(c) of the Act, and authority to
offer HCBS under the State plan at section 1915(i) of the Act. While
Congress clearly considered the experience to date with HCBS under
waivers when constructing section 1915(i) of the Act, it did not choose
to modify section 1915(c) of the Act, but chose instead to create a new
authority at section 1915(i) of the Act. We, therefore, chose to
propose a separate rule.
3. Alternative Methods for Delivering HCBS
CMS considered using existing operational methods for delivering
State plan HCBS, but the unique and specific requirements in section
1915(i) of the Act are substantially different from currently-existing
authorities, and ultimately required stand-alone implementation
tailored to the particular characteristics of the State plan HCBS
option as described in statute. CMS considered whether section 1915(i)
of the Act permits States to: (1) Disregard comparability, (2) define
HCBS other than the services specifically listed in statute, as
allowable under section 1915(c), (3) offer HCBS to Medicaid
beneficiaries without a 150 percent of FPL income test unique to this
benefit, or (4) provide State plan HCBS in place of mandatory
institutional benefits for some individuals. However, CMS determined
that none of these options is allowable under section 1915(i) of the
Act.
D. Accounting Statement and Table
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in the table below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this proposed rule. This
table provides our best estimate of the proposed increase in Federal
Medicaid outlays resulting from offering States the option to provide
the State plan HCBS benefit established in section 1915(i) of the Act
and implemented by CMS-2249-P (Medicaid program; Home and Community-
Based State Plan Services).
Table: Accounting Statement: Classification of Estimated Expenditures,
From FY 2008 to FY 2012
[In millions]
------------------------------------------------------------------------
-- -- --
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers.. 3% Units Discount 7% Units Discount
Rate Rate
$147.9 $145.1
------------------------------------------------------------------------
From Whom To Whom?.............. Federal Government to Providers
------------------------------------------------------------------------
Other Annualized Monetized 3% Units Discount 7% Units Discount
Transfers...................... Rate Rate
$111.4 $109.3
------------------------------------------------------------------------
From Whom To Whom?.............. State Governments to Providers
------------------------------------------------------------------------
E. Conclusion
We anticipate that States will make widely varying use of the
section 1915(i) State plan HCBS benefit to provide needed long-term
care services for Medicaid beneficiaries. These services will be
provided in the home or alternative living arrangements in the
community, which is of benefit to the beneficiary and is less costly
than institutional care. Requirements for independent evaluation and
assessment, individualized care planning, and requirements for a
quality improvement program will assure efficient and effective use of
Medicaid expenditures for these services.
For the reasons stated above, we are not preparing analyses for
either the RFA or section 1102(b) of the Act because we have
determined, and the Secretary certifies, that this proposed rule will
not have a significant
[[Page 18696]]
economic impact on a substantial number of small entities or a
significant impact on the operations of a substantial number of small
rural hospitals.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 431
Grant programs--health, Health facilities, Medicaid, Privacy,
Reporting and recordkeeping requirements.
42 CFR Part 440
Grant programs--health, Medicaid.
42 CFR Part 441
Family planning, Grant programs--health, Infants and children,
Medicaid, Penalties, Prescription drugs, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION
1. The authority citation for part 431 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
Subpart B--General Administrative Requirements
2. Section 431.40 is amended by revising paragraph (a)(7) to read
as follows:
Sec. 431.40 Basis and scope.
(a) * * *
(7) Exceptions to, and waiver of, State plan requirements--sections
1915(a) through (e), and (i) of the Act, and section 1916(a)(3) and
(b)(3) of the Act.
* * * * *
3. Section 431.50 is amended by--
A. Redesignating paragraph (c)(2) as paragraph (c)(3).
B. Adding a new paragraph (c)(2).
The revisions read as follows:
Sec. 431.50 Statewide operation.
* * * * *
(c) * * *
(2) Home and community-based services for the elderly and disabled
under sections 1915(c), (d), and (i) of the Act; and
* * * * *
PART 440--SERVICES: GENERAL PROVISIONS
4. The authority citation for part 440 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
5. Amend Sec. 440.1 by adding the new statutory basis in numerical
order.
The addition reads as follows:
Sec. 440.1 Basis and purpose.
* * * * *
1915(i) Home and community-based services furnished under a State
plan to elderly and disabled individuals under the provisions of part
441, subpart K.
6. Section 440.180 is amended by revising the heading to read as
follows:
Sec. 440.180 Home and community-based waiver services.
* * * * *
7. A new Sec. 440.182 is added to read as follows:
Sec. 440.182 State plan home and community-based services.
(a) Definition. State plan home and community-based services
benefit means the services listed in paragraph (b) of this section when
provided under an amendment to the State's Medicaid plan under the
provisions of part 441, subpart K of this chapter.
(b) Services. The State plan home and community-based services
(HCBS) benefit provided by the State may consist of any or all of the
following services as they are described by the State and included in
the State's plan for medical assistance approved by the Secretary:
(1) Case management services.
(2) Homemaker services.
(3) Home health aide services.
(4) Personal care services.
(5) Adult day health services.
(6) Habilitation services, which include expanded habilitation
services as specified in Sec. 440.180(c).
(7) Respite care services.
(8) Subject to the conditions in Sec. 440.180, for individuals
with chronic mental illness:
(i) Day treatment or other partial hospitalization services;
(ii) Psychosocial rehabilitation services;
(iii) Clinic services (whether or not furnished in a facility.
(c) Exclusions. State plan HCBS do not include either of the
following:
(1) Other services. The other services that the Secretary has the
authority to approve under Sec. 440.180 for a home and community-based
services (HCBS) waiver;
(2) Room and board. For purposes of this provision, ``board'' means
3 meals a day or any other full nutritional regimen. ``Room'' means
expenses for shelter, including all property-related costs,
furnishings, maintenance, utilities, and related administrative
services. FFP is not available for the cost of room and board in State
plan HCBS. The following service costs are not considered room or
board:
(i) The cost of food and housing in respite care services provided
in a facility approved by the State that is not a private residence.
(ii) Meals provided as part of a program of adult day health
services as long as the meals provided do not constitute a ``full''
nutritional regimen.
(iii) A portion of the housing expense and food that may be
reasonably attributed to an unrelated caregiver providing State plan
HCBS who is residing in the same household with the recipient, but not
if the recipient is living in the home of the caregiver or in a
residence that is owned or leased by the caregiver.
PART 441--SERVICES: REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC
SERVICES
8. The authority citation for part 441 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
9. A new subpart K, consisting of Sec. 441.550 through Sec.
441.577, is added to part 441 to read as follows:
Subpart--K State Plan Home and Community-Based Services for Elderly and
Disabled Individuals
Sec.
441.550 Basis and purpose.
441.553 State plan requirements.
441.556 Eligibility for home and community-based services under
section 1915(i)(1) of the Act.
441.559 Needs-based criteria and evaluation.
441.562 Independent assessment.
441.565 Plan of care.
441.568 Provider qualifications.
441.571 Definition of individual's representative.
441.574 Self-directed services.
441.577 State plan HCBS administration: State responsibilities and
quality improvement.
Subpart K--State Plan Home and Community-Based Services for Elderly
and Disabled Individuals
Sec. 441.550 Basis and purpose.
Section 1915(i) of the Act permits States to offer one or more home
and community-based services (HCBS) to qualified elderly and disabled
individuals under their State Medicaid plans. Those services are listed
in Sec. 440.182 of this chapter, and are described by the State,
including any limitations of the services. This optional benefit is
known as the State plan HCBS
[[Page 18697]]
benefit. This subpart describes what a State Medicaid plan must
provide, and defines State responsibilities.
Sec. 441.553 State plan requirements.
A State plan that includes home and community-based services for
elderly and disabled individuals must meet the requirements of this
subpart.
Sec. 441.556 Eligibility for home and community-based services under
section 1915(i)(1) of the Act.
(a) Eligibility. To be eligible for State plan HCBS under section
1915(i) of the Act, an individual must meet the following requirements:
(1) Be eligible for Medicaid under an eligibility group covered
under the State's Medicaid plan.
(2) Have income that does not exceed 150 percent of the Federal
Poverty Level (FPL). In determining whether the 150 percent of FPL
requirement is met, the rules for determining income eligibility for
the individual's eligibility group under the State's Medicaid plan,
including any more liberal income disregards used by the State for that
group under section 1902(r)(2) of the Act, apply.
(3) Reside in the home or community, not in an institution, in
accordance with the following:
(i) According to standards for community living facilities, as
prescribed by the Secretary.
(ii) If the individual living in a residence with four or more
persons unrelated to the proprietor, which furnishes one or more
treatments or services, the independent assessment must include
documentation that the individual is living in a community setting, and
not in an institution.
(4) Meet needs-based criteria for eligibility for the State plan
HCBS benefit, as required in Sec. 441.554(d).
(5) Be assessed to require at least one home and community-based
service, as required in Sec. 441.562(a)(vi).
(b) State options. The State may elect in the State plan amendment
approved under this subpart not to apply the following requirements:
(i) Section 1902(a)(10)(C)(i)(III) of the Act, pertaining to income
and resource eligibility rules for the medically needy living in the
community, but only for the purposes of providing State plan HCBS.
(ii) Section 1902(a)(1) of the Act, pertaining to statewide
application of Medicaid, but only for the purposes of providing State
plan HCBS.
Sec. 441.559 Needs-based criteria and evaluation.
(a) Needs-based criteria. The State must establish needs-based
criteria for determining an individual's eligibility under the State
plan for the HCBS benefit, and may establish needs-based criteria for
each specific service.
(1) Needs-based criteria are factors used to determine an
individual's requirements for support. The criteria are not
characteristics that describe the individual or the individual's
condition. A diagnosis is not a sufficient factor on which to base a
determination of need. A criterion can be considered needs-based if it
is a factor that can only be ascertained for a given person through an
individualized evaluation of need.
(2) Needs-based criteria defined by the State may include:
(i) Need for total support to perform two or more activities of
daily living (ADLs) (as defined in section 7702B(c)(2)(B) of the
Internal Revenue Code of 1986).
(ii) Need for significant assistance to perform ADLs.
(iii) Other risk factors as the State determines to be appropriate
and describes in the State Medicaid plan.
(b) More stringent institutional and waiver needs-based criteria.
The State plan HCBS benefit is available only if the State has in
effect needs-based criteria (as defined in paragraph (a)(1) of this
section), for receipt of services in nursing facilities as defined in
section 1919(a) of the Act, intermediate care facilities for the
mentally retarded as defined in Sec. 440.150 of this chapter, and
hospitals as defined in Sec. 440.10 of this chapter under the State
plan and for which the State has established long-term level of care
criteria, or waivers offering HCBS, and these needs-based criteria are
more stringent than the needs-based criteria for the State plan HCBS
benefit. If the State defines needs-based criteria for individual State
plan home and community-based services, the needs-based institutional
eligibility criteria must be more stringent than the combined effect of
needs-based State plan HCBS benefit eligibility criteria and individual
service criteria.
(1) These more stringent criteria must meet the following
requirements:
(i) Be included in the level of care determination process for each
institutional service and waiver.
(ii) Be submitted for inspection by CMS with the State plan
amendment that establishes the State Plan HCBS benefit.
(iii) Be in effect on or before the effective date of the State
plan HCBS benefit.
(2) In the event that the State modifies institutional level of
care criteria to meet the requirements under paragraph (b) of this
section that such criteria be more stringent than the State plan HCBS
needs-based eligibility criteria, individuals receiving Medicaid in an
institution or waiver HCBS, as of the effective date of the State plan
amendment, will continue to be eligible for the institutional services
or waiver HCBS under the level of care criteria previously in effect.
Such individuals will not be subject to the more stringent modified
institutional criteria, until such time as the individual is discharged
from the institution or waiver, or no longer requires that level of
care.
(c) Adjustment authority. The State may modify the needs-based
criteria established under paragraph (a) of this section, without prior
approval from the Secretary, if the number of individuals enrolled in
the State plan HCBS benefit exceeds the projected number submitted
annually to CMS. The Secretary will approve a retroactive effective
date for the State plan amendment modifying the criteria, as early as
the day following the notification period required under paragraph
(c)(1) of this section, if all of the following conditions are met:
(1) The State provides at least 60 days notice of the proposed
modification to the Secretary, the public, and each individual enrolled
in the State plan HCBS benefit.
(2) The State notice to the Secretary is submitted as an amendment
to the State plan.
(3) The adjusted needs-based eligibility criteria (in combination
with service-specific needs-based criteria, if any) for the State plan
HCBS benefit are less stringent than all needs-based institutional and
waiver level of care criteria in effect after the adjustment.
(4) Individuals who were found eligible for the State plan HCBS
benefit before modification of the needs-based criteria under this
adjustment authority must remain eligible for the HCBS benefit and
specific services on the basis of the unmodified criteria, for at least
12 months, beginning on the date the individual first received medical
assistance for such services.
(5) Individuals continue to receive HCBS under the unmodified
criteria during the not less than 60-day notification period,
irrespective of the date the individual first received medical
assistance for such services.
(6) Any changes in service due to the modification of needs-based
criteria under this adjustment authority are treated as actions as
defined in Sec. 431.201 and are subject to the requirements of part
431 subpart E of this chapter.
(7) In the event that the State modifies institutional level of
care criteria to meet the requirements under paragraph
[[Page 18698]]
(b) of this section that such criteria be more stringent than the State
plan HCBS needs-based eligibility criteria, the State may adjust the
modified institutional level of care criteria under this adjustment
authority. The adjusted institutional level of care criteria must be at
least as stringent as those in effect before they were modified to meet
the requirements in paragraph (b) of this section.
(d) Independent evaluation and determination of eligibility.
Eligibility for the State plan HCBS benefit must be determined through
an independent evaluation of each individual according to the
requirements of Sec. 441.556(a)(1) through (4). The independent
evaluation complies with the following requirements:
(1) Is performed by an agent that is independent and qualified as
defined in Sec. 441.568 of this section.
(2) Applies the needs-based eligibility criteria that the State has
established under paragraph (a) of this section, and the general
eligibility requirements under Sec. 441.556(a)(1) through (3).
(3) If applicable, includes the individual's authorized
representative.
(4) Assesses the individual's strengths as well as support needs.
(5) Uses only current and accurate information from existing
records, and obtains any additional information necessary to draw valid
conclusions about the individual's support needs.
(6) Evaluations finding that an individual is not eligible for the
State plan HCBS benefit are treated as actions defined in Sec. 431.201
and are subject to the requirements of part 431 subpart E of this
chapter.
(e) Periodic redetermination. Independent reevaluations of each
individual receiving the State plan HCBS benefit must be performed at
least every 12 months, to determine whether the individual continues to
meet eligibility requirements. Redeterminations must meet the
requirements of paragraph (d) of this section.
Sec. 441.562 Independent assessment.
(a) For each individual determined to be eligible for the State
plan HCBS benefit, the State must provide for an independent assessment
of need in order to establish a plan of care. The independent
assessment must include the following:
(1) An objective evaluation of the individual's inability to
perform two or more activities of daily living (ADLs) (as defined in
section 7702(c)(2)(B) of the Internal Revenue Code of 1986) or need for
significant assistance to perform ADLs.
(2) A face-to-face assessment of the individual. The face-to-face
assessment must meet the following requirements:
(i) The assessment must be performed by an agent that is
independent and qualified as defined in Sec. 441.568 of this section.
(ii) If applicable, the assessment must include the individual's
authorized representative.
(iii) The assessment must be conducted in consultation with the
individual, the individual's spouse, family, guardian, appropriate
treating and consulting health and support professionals caring for the
individual, support staff, and other responsible parties.
(iv) The assessment must include an examination of the individual's
relevant history, medical records (including the independent evaluation
of eligibility), physical and mental health care and support needs and
all information needed to develop the plan of care as required in Sec.
441.565.
(v) The assessment must be guided by best practice and research on
effective strategies that result in improved health and quality of life
outcomes.
(vi) The assessment must apply the State's needs-based criteria for
each service (if any) that the individual may require. Individuals are
considered enrolled in the State plan HCBS benefit only if they meet
the eligibility and needs-based criteria for the benefit, and are also
assessed to require at least one home and community-based service
offered under the State plan for medical assistance.
(vii) If the State offers individuals (including, if applicable,
the individual's authorized representative) the option to self-direct
the purchase of, or control the receipt of, a home and community-based
State plan service or services, the assessment must include an
evaluation of the support needs of the individual and the ability of
the individual (with and without supports) to self-direct the purchase
of, or control the receipt of, these services if the individual so
elects.
(viii) For individuals living in a residence with four or more
persons unrelated to the proprietor, that furnishes one or more
treatments or services, the assessment must include documentation of
whether the individual resides in the community, according to Sec.
441.556(a)(3).
(ix) For individuals receiving habilitation services, documentation
that no Medicaid services are provided which would otherwise be
available to the individual, specifically including but not limited to
services available to the individual through a program funded under
section 110 of the Rehabilitation Act of 1973, or the Individuals with
Disabilities Improvement Act of 2004.
(b) The independent assessment of need must be conducted at least
every 12 months and as needed when the individual's support needs or
circumstances change significantly, in order to revise the plan of
care.
Sec. 1.565 Plan of care.
(a) Plan of care. Based on the independent assessment required in
Sec. 441.562, the State must develop (or approve, if the plan is
developed by others) a written plan of care jointly with the individual
(including, for purposes of this paragraph, the individual and the
individual's authorized representative if applicable). The person-
centered planning process must identify the individual's physical and
mental health support needs, strengths and preferences, and desired
outcomes. The plan must be developed in consultation with the
individual's health care or support professionals, or other appropriate
persons, as determined by the State, and where appropriate, with the
individual's family, spouse, caregiver, guardian, or representative.
When the plan of care is finalized between the parties, a written copy
is provided to the individual. At a minimum, the plan must determine
HCBS to be provided that meet the following requirements:
(1) Take into account the extent of, and need for, any family or
other supports for the individual.
(2) Be consistent with the individual's strengths and support needs
arising from the individual's physical, sensory, or intellectual
disability.
(3) Prevent the provision of unnecessary or inappropriate care, and
provide the HCBS that the individual is assessed to require.
(4) Include those services, the purchase or control of which the
individual elects to self-direct, meeting the requirements of Sec.
441.574(b) through (d).
(b) Reassessment. The plan of care must be reviewed and revised
upon independent reassessment, as required in Sec. 441.562, at least
every 12 months and when the individual's circumstances or needs change
significantly.
(c) Shared authority. The plan of care must afford the individual
the opportunity, with information and supports, for active
participation and shared authority in developing the plan of care.
[[Page 18699]]
Sec. 441.568 Provider qualifications.
(a) The State must provide assurances that necessary safeguards
have been taken to protect the health and welfare of enrollees in State
plan HCBS, and must define in writing adequate standards for providers
(both agencies and individuals) of HCBS services and for agents
conducting independent evaluation, independent assessment, and plan of
care development.
(b) The State must define conflict of interest standards that
ensure the independence of individual and agency agents who conduct
(whether as a service or an administrative activity) independent
evaluation of eligibility for State plan HCBS, independent assessment
of need, or are involved in developing the plan of care. The conflict
of interest standards apply to all individuals and entities, public or
private. At a minimum, these agents must not be any of the following:
(1) Related by blood or marriage to the individual, or to any paid
caregiver of the individual.
(2) Financially responsible for the individual.
(3) Empowered to make financial or health-related decisions on
behalf of the individual.
(4) Providers of State plan HCBS for the individual, or those who
have an interest in or are employed by a provider of State plan HCBS
for the individual, except when the only willing and qualified agent to
perform independent assessments and develop plans of care in a
geographic area also provides HCBS, and the State devises conflict of
interest protections including separation of agent and provider
functions within provider entities, which are described in the State
plan for medical assistance and approved by the Secretary.
(c) Qualifications for agents performing independent assessments
and plans of care must include training in assessment of individuals
whose physical or mental conditions trigger a potential need for home
and community-based services and supports, and current knowledge of
best practices to improve health and quality of life outcomes.
Sec. 441.571 Definition of individual's representative.
In this subpart, the term individual's representative means, with
respect to an individual being evaluated for, assessed regarding, or
receiving State plan HCBS, the following:
(a) The individual's legal guardian or other person who is
authorized under State law to represent the individual for the purpose
of making decisions related to the person's care or well-being.
(b) Any other person who is authorized by policy of the State
Medicaid Agency to represent the individual including but not limited
to a parent, a family member, or an advocate for the individual. When
the State authorizes representatives pursuant to this paragraph, the
State must have policies describing the process for appointment; the
extent of decision-making authorized; and safeguards to ensure that the
representative functions in the best interests of the participant.
Sec. 441.574 Self-directed services.
(a) State option. The State may choose to offer an election for
self-directing HCBS. The term ``self-directed'' means, with respect to
State plan HCBS listed in Sec. 440.182 of this chapter, services that
are planned and purchased under the direction and control of the
individual, including the amount, duration, scope, provider, and
location of the HCBS. For purposes of this paragraph, individual means
the individual and, if applicable, the individual's representative as
defined in Sec. 441.571.
(b) Plan of care requirement. Based on the independent assessment
required in Sec. 441.562, the State develops (or approves, if the plan
is developed by others) a plan of care jointly with the individual as
required in Sec. 441.565. If the individual chooses to direct some or
all HCBS, the plan of care must meet the following requirements:
(1) Be developed through a person-centered process that is directed
by the individual, builds upon the individual's ability (with and
without support) to engage in activities that promote community life,
respects individual preferences, choices, strengths, and involves
families, friends, and professionals as desired or required by the
individual.
(2) Specify the State plan HCBS that the individual will be
responsible for directing.
(3) Identify the methods by which the individual will plan, direct
or control services, including whether the individual will exercise
authority over the employment of service providers or authority over
expenditures from the individualized budget.
(4) Specify the role of family members and others whose
participation is sought by the individual with respect to the State
plan HCBS.
(5) Include appropriate risk management techniques, including
contingency plans, that recognize the roles and sharing of
responsibilities in obtaining services in a self-directed manner and
assure the appropriateness of this plan based upon the resources and
support needs of the individual.
(6) Describe the process for facilitating transition from self-
direction and any circumstances under which transition out of self-
direction is involuntary.
(c) Employer authority. If the plan of care includes authority to
select, manage, or dismiss providers of the State plan HCBS, the plan
must meet the following requirements:
(1) Specify the authority to be assumed by the individual, any
limits to the authority, and specify parties responsible for functions
outside the authority to be assumed.
(2) Specify the financial management supports, as required in
paragraph (e) of this section, to be provided.
(d) Budget authority. If the plan of care includes an
individualized budget (which identifies the dollar value of the
services and supports under the control and direction of the
individual), the plan must meet the following requirements:
(1) Describe the method for calculating the dollar values in the
budget, based on reliable costs and service utilization.
(2) Define a process for making adjustments in dollar values to
reflect changes in an individual's assessment and plan of care.
(3) Provide a procedure to evaluate expenditures under the budget.
(4) Specify the financial management supports, as required in
paragraph (e) of this section, to be provided.
(5) Not result in payment for medical assistance to the individual.
(e) Functions in support of self-direction. When the State elects
to offer self-directed State plan HCBS, it must also offer the
following supports to individuals receiving the services and their
representatives:
(1) Information and assistance consistent with sound principles and
practice of self-direction.
(2) Financial management supports to meet the following
requirements:
(i) Manage Federal, State, and local employment tax, labor,
worker's compensation, insurance, and other requirements that apply
when the individual functions as the employer of service providers.
(ii) Function as employer of record when the individual elects to
exercise supervisory responsibility without employment responsibility.
(iii) Make financial transactions on behalf of the individual when
the individual has personal budget authority.
(iv) Maintain separate accounts for each individual's budget and
provide
[[Page 18700]]
periodic reports of expenditures against budget in a manner
understandable to the individual.
Sec. 441.577 State plan HCBS administration: State responsibilities
and quality improvement.
(a) State plan HCBS administration--(1) State responsibilities. The
State must carry out the following responsibilities in administration
of its State plan HCBS:
(i) Number served. The State will annually provide CMS with the
projected number of individuals to be enrolled in the benefit and the
actual number of unduplicated individuals enrolled in State plan HCBS
in the previous year. If the State chooses to limit the number to be
served at any point in time, as provided in Sec. 441.577(a)(1)(ii),
the State will annually provide to CMS the maximum number enrolled at
one time.
(ii) Optional limit to number served. If the State chooses to set a
limit for the maximum number of individuals to be enrolled in the State
plan HCBS benefit (either annually or at any point in time), the
following conditions must be met:
(A) The maximum number of individuals to be enrolled in the benefit
is established and adjusted by a State plan amendment.
(B) If the State elects to maintain a waiting list for State plan
HCBS, the State establishes and adheres to policies and procedures for
formation and maintenance of a waiting list that complies with all
applicable Federal and State requirements. Waiting list criteria and a
formally established schedule and procedure for reevaluation and
revision must be made public.
(iii) Access to services. The State must grant access to all State
plan HCBS assessed to be needed, to individuals who have been
determined to be eligible for the State plan HCBS benefit. The State
may not limit access to one or more State plan HCBS according to type
of disability or other characteristic, or limit the number of persons
served by particular services. The State must not restrict the number
of State plan HCBS that enrolled individuals may receive, or the scope
and frequency of the HCBS (up to the approved service limitations, if
any,) for reasons other than medical necessity as determined by the
plan of care according to Sec. 441.565.
(2) Administration--(i) Option for presumptive payment. (A) The
State may provide for a period of presumptive payment, not to exceed 60
days, for Medicaid eligible individuals the State has reason to believe
may be eligible for the State plan HCBS benefit. FFP is available as
administration of the approved State plan for evaluation of eligibility
for the State plan HCBS benefit under Sec. 441.559(d) and assessment
of need for specific HCBS under Sec. 441.562(a), prior to an
individual's receipt of State plan HCBS services or determination of
ineligibility for the benefit.
(B) If an individual the State has reason to believe may be
eligible for the State plan HCBS benefit is evaluated and assessed
under the presumptive payment option and found not to be eligible for
the benefit, FFP as administration of the approved State plan will be
available for the evaluation and assessment. The individual so
determined will not be considered to have enrolled in the State plan
HCBS benefit for purposes of determining the annual number of
participants in the benefit.
(ii) Reimbursement methodology. The State plan amendment to provide
State plan HCBS must contain a description of the reimbursement
methodology for each covered service. To the extent that the
reimbursement methodologies for any self-directed services differ from
those descriptions, the method for setting reimbursement methodology
for the self-directed services must also be described.
(iii) Operation. The State plan amendment to provide State plan
HCBS must contain a description of the State Medicaid agency line of
authority for operating the State plan HCBS benefit, including
distribution of functions to other entities.
(b) Quality improvement strategy: Program performance and quality
of care--(1) Quality improvement strategy. States will maintain an HCBS
quality improvement strategy that includes methods for ongoing
measurement of program performance, quality of care, and mechanisms for
remediation and improvement proportionate to the scope of services in
the State plan HCBS benefit and the number of individuals to be served.
(2) Program performance measures. The States' quality improvement
strategy must be designed to measure and provide evidence of program
performance. Program performance measures must be made available to CMS
upon request and include indicators approved or prescribed by the
Secretary.
(3) Quality of care measures. The State's quality improvement
strategy must be designed to measure outcomes associated with the
receipt of home and community-based services, particularly with respect
to the health and welfare of the recipients of these services. Quality
of care measures must be made available to CMS upon request and include
indicators approved or prescribed by the Secretary.
(Catalog of Federal Domestic Assistance Program, No. 93.778, Medical
Assistance Program.)
Dated: October 31, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: December 20, 2007.
Michael O. Leavitt,
Secretary.
Editorial Note: This document was received at the Office of the
Federal Register on March 27, 2008.
[FR Doc. 08-1084 Filed 3-28-08; 11:11 am]
BILLING CODE 4121-01-P