Indiana Begins Work to Implement CMS Home and Community Based Settings Rule

In March 2014 CMS released a toolkit to state agencies to use as they move forward with creating or amending Home and Community Based Services (HCBS; also referred to as Home and Community Based Settings) programs within Medicaid.  CMS’s website devoted to the CMS HCBS rule and guidance is great resource to understand the agency’s direction for the Medicaid waiver programs that serve persons with mental illness, intellectual or developmental disabilities, and/or physical disabilities.  The CMS rule and interpretive guidance spell out a significant shift in the way CMS will support state HCBS program with federal funding.  Only those programs that meet specific criteria, much of which differs substantially from prior rule and guidance, will be eligible for federal funding.  Transition to compliance may take up to 5 years in each state, depending on specific state circumstances.

One of Indiana’s HCBS waivers is the Aged & Disabled Waiver (A&D Waiver) that includes the Assisted Living Services (amongst many others – see FSSA’s Medicaid Waivers page).  Approximately 1,500 Medicaid recipients currently reside in licensed Residential Care Facilities through the AL services wavier, and more than 16,000 Medicaid recipients receive one of the services listed under the A&D waiver.  All of these recipients quality for institutional care but are being served in the community under one of the waiver programs.  The Indiana Division of Aging (DA) manages the A&D Waiver and will be applying later this year to increase the number of slots available so that more Medicaid recipients can access these services.  A well known goal of federal and state governments is to increase the number and level of spending for HCBS so that more recipients can be cared for, when appropriate, in a lower cost community setting.

The CMS rule and guidance set out a number of new requirements and limitations for HCBS programs, and a new option to add HCBS into a state’s Medicaid plan rather than operating it as a waiver to the state plan.  More guidance is expected to be released in order to distinguish application of the requirements on the very different populations covered, but as they read now the rules and guidance are likely to result in significant change to Indiana’s HCBS programs.  CMS’s guidance titled Regulatory Requirements for Home and Community Based Settings spells out CMS’s expectations that states design programs that integrate recipients with the broader community, promote choice and person-centered care, provides autonomy and ensure protection of individual rights, and excludes settings that are de-facto institutions (like Nursing Facilities, ICF-IIDs, and Hospitals), or that have qualities of institutions or qualities that isolate HCBS recipients.

Impact on Indiana Providers
There will be impact on Indiana’s AL services providers – licensed Residential Care Facilities. Under CMS’s guidance, any provider-owned or controlled residential setting, in addition to the qualities discussed above (qualities which are evaluated based on other extensive guidance), must permit or provide:

-    The unit/dwelling is a specific space that can be owned, rented, or occupied under a legally enforceable agreement and provides the same protections that tenants would have under landlord/tenant laws of a state or other municipality.
-    Each unit must provide for privacy and have entrance doors that are lockable by the individual, with only appropriate staff having keys to doors; individuals must have a choice of roommate; individuals must have the freedom to decorate and furnish the unit within the lease or other agreement.
-    Individuals must have the freedom to control their own schedules and have access to food at any time.
-    Individuals must be able to have visitors of their choosing at any time.
-    The setting must be physically accessible to the individual.
-    Any modification to the above must be done through a person-centered service plan that meets specified requirements.

Settings that are presumed to have qualities of institutions, as defined by CMS, will require special attention by each state if these settings are to continue participate in HCBS programs.   Such settings are required to be identified by the state with a plan as to what changes to licensing or certification standards may be necessary to use such settings in a HCBS program.  Settings that are presumed to have qualities of institutions that are included in a HCBS waiver plan will go through a “heightened scrutiny” process (see also Steps to Compliance for HCBS Setting Requirements).  Settings that are presumed to have qualities of institutions are:

-    Any setting located in a building that is also a publically or privately operated facility that provides inpatient institutional treatment;
-    Any setting that is located in the building on the grounds of, or immediately adjacent to, a public institution; or
-    Any other setting that has the effect of isolating individuals receiving Medicaid HCBS from the broader community of individuals not receiving Medicaid HCBS (see CMS Guidance on Settings That Have the Effect of Isolating Individuals).

Indiana Division of Aging Work To Date
The Indiana DA has begun work, along with its sister divisions at FSSA, to develop a transition plan that includes timeframes and benchmarks for developing/changing Indiana’s programs to comply with the CMS rule and guidance.  The first draft of a transition plan is due to CMS in December 2014.  The state will have one year to submit a final transition plan and the transition period may be up to 5 years depending on circumstances discovered in the planning process (required statutory/regulatory changes that may be necessary, etc.).

As it relates to the Assisted Living Services component of the Indiana A&D waiver, the DA is developing a survey tool that will be sent to current AL service waiver providers in order for the DA to have hard data on the housing stock and operations of Residential Care Facilities.  This data is essential to gather in order to allow the DA to develop a transition plan that can include Residential Care Facilities and/or design alternative programs to continue Assisted Living Services in Indiana’s HCBS waiver program.  This survey is to be sent later this summer.  This entire process will be a long one, but it is critically important to follow and provide input into.

IHCA/INCAL will continue to monitor Indiana’s implementation of the CMS rule.  Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 with questions or comments.