New Federal Guidance Preserves Individual Housing Choice

March 29, 2019

On March 22, 2019, The Centers for Medicare & Medicaid Services (CMS) issued new guidance on the implementation of the home and community-based services (HCBS) regulation.

Back in 2014, CMS first issued a final rule to ensure that Medicaid’s HCBS programs provide full access to the benefits of community living and offer services in the most integrated settings.

All states were required to submit a Statewide Transition Plan (STP) for approval to provide a framework to bring its Medicaid Waiver programs into compliance by March 17, 2019. (This deadline was subsequently extended to 2022.) These Medicaid Waiver programs provide funding for the Community Care Program which funds residential and many other services as well as the Supports Program which includes employment services, day programs, and other services.

The State of New Jersey, via the Department of Human Services Division of Developmental Disabilities, submitted its draft plan for stakeholder comments in 2015. At that time, Autism New Jersey and other disabilities advocates had grave concerns that some of the proposed revisions would have an adverse effect on individuals with autism and other developmental disabilities. We felt the regulations were overly and arbitrarily restrictive, limited consumer choice, and would suppress housing development and innovation.

After rigorous advocacy work with our partners for almost two years, the State issued an amendment to its proposed plans that eased some of these restrictions. That amended plan was submitted to CMS by the State in December 2016.

New Jersey was not alone in its concerns. Advocates from states across the country found similar issues with lack of clarity in the guidance provided by CMS and overreach by some states that infringed on individual rights.

In response to these concerns, CMS issue new guidance (in the form of FAQs) for the implementation of HCBS regulations.

According to CMS’s press release:

[The updated guidance] streamlines and clarifies the “heightened scrutiny” process, which allows states to provide evidence to CMS demonstrating that certain settings meet the federal HCBS criteria so that they can maintain access to Medicaid funding. The FAQs provide clarity on this process so that states have the flexibility they need to serve their residents while preserving an appropriate federal oversight role.

“Even well-intentioned policies from Washington often lack the flexibility needed to work for every state, community, setting, or family,” said CMS Administrator Seema Verma. “The implementing guidance issued under the prior administration was simply too prescriptive and unfairly singled out certain settings, causing unnecessary anxiety for many beneficiaries, families and providers. We believe our revised guidance strikes the appropriate balance to protect individual choice while maintaining the integrity of home and community-based funding.”

“This new guidance from CMS addresses the very issue we had with New Jersey’s initial plan four years ago – helping to preserve individual choice,” noted Dr. Suzanne Buchanan, Autism New Jersey Executive Director. “Before these regulations and in the case of New Jersey’s first plan, certain housing settings that had facilitated safety and treatment for some and were desired by many, such as intentional communities with more than four residents, farmsteads, and other innovative programs, faced obstacles. Residents who chose those settings would have lost Medicaid funding for residential services. This guidance should eliminate those concerns.”

The plan New Jersey submitted to CMS is still pending approval.


HCBS Settings Regulation Implementation │ Heightened Scrutiny Reviews

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