HCBS Settings Rule: FAQs

The federal Centers for Medicare & Medicaid Services (CMS) requires all states that operate Medicaid home and community-based services (HCBS) waivers to comply with a new federal rule. The purpose of the HCBS settings rule is to ensure that people receiving services through HCBS waiver programs have access to the benefits of community living and are able to receive services in the most integrated setting. Since Wisconsin operates several programs under Medicaid HCBS waivers, DHS is required to implement the new rule. Approximately 65,000 people in Wisconsin receive services under 1915(c) waiver programs. The ability of DHS to continue to provide home and community-based services depends on assuring compliance with the rule.

Wisconsin’s plan for meeting the rule’s requirements is described in the Statewide Transition Plan for Compliance with the Medicaid HCBS Settings Requirements, P-01839 (PDF).

Ongoing monitoring and re-evaluation of settings began January 1, 1018, for assisted living facilities regulated and licensed by the Division of Quality Assurance (DQA).

• Announcement: Implementation of HCBS Settings Rule in DQA Regulated Assisted Living Facilities
• DQA Implementation of Home and Community-Based Services Settings Rule in Assisted Living Facilities, P-01826 (PDF)

The HCBS settings rule applies to the following Medicaid 1915(c) waiver programs in Wisconsin:

• Family Care
• Family Care Partnership
• IRIS (Include, Respect, I Self-Direct)
• Children’s Long-Term Support Waiver

The new rule does not change the funding for institutions, such as nursing homes and intermediate care facilities for individuals with intellectual disabilities. These institutions are funded through the Medicaid State Plan. Institutions have never been allowable settings for long-term residential care under 1915(c) waiver authority.

The residential settings subject to the rule are:

• Licensed community-based residential facilities
• Licensed 3-4 bed adult family homes
• Certified 1-2 bed adult family homes
• Certified residential care apartment complexes
• Licensed Level 1-4 foster homes
• Licensed Level 5 exceptional treatment foster homes

Per the rule, these settings must meet conditions that ensure specific rights of people living in those settings. This includes things like privacy in living units and bedrooms, control over schedules and activities, ability to have visitors, and protections from eviction.

Benchmark Guide for Adult Residential Settings, P-02207 (PDF)

The rule applies to all nonresidential waiver services. However, the nonresidential settings most affected by the rule are:

• Adult day service providers
• Adult day care providers
• Children’s day services providers
• Prevocational providers

Per the rule, all settings must meet conditions that ensure specific rights of people receiving HCBS services in those settings. Mainly, the setting must not isolate people from the broader community. Programs must provide opportunities for children and youth to do the following in an age and developmentally appropriate manner:

• Seek employment.
• Work in competitive integrated settings.
• Engage in community life.
• Receive services in the community.
• Interact with peers who do not have disabilities.
• Participate in community events and activities.
• Access and control personal resources.

The federal rule assumes that certain settings are not home and community-based. These include:

• Settings in a publicly or privately owned facility providing inpatient treatment (including skilled nursing facilities).
• Settings on the grounds of, or adjacent to, a public institution.*
• Settings with the effect of isolating individuals from the broader community of individuals not receiving Medicaid HCBS waiver services.

If a residential or nonresidential setting meets one of the above criteria, then the setting will require heightened scrutiny to overcome the assumption that it is not home and community-based. For example, if a community-based residential facility or an adult day provider is located on the grounds of a public institution, it will not be considered home and community-based unless an additional review determines otherwise.

*CMS definition of public institution under the new rule is the existing definition under 42 C.F.R. § 435.1010: “Public institution” means an institution that is the responsibility of a governmental unit or over which a governmental unit exercises administrative control. For purposes of this regulation, a public institution is an inpatient facility that is financed and operated by a county, state, municipality, or other unit of government. A privately owned nursing facility is not a public institution.

States can present evidence to CMS to justify that some settings are home and community-based. DHS will determine on a case-by-case basis whether a particular setting requires further review with CMS. Settings that want to provide evidence that they are home and community-based must complete the provider self-assessment. DHS will conduct a site visit for each setting. If DHS agrees that the evidence indicates that the setting is home and community-based, DHS will provide the evidence to CMS for review. CMS will consider the evidence and then issue a decision.

The process of assessing settings for compliance with the HCBS settings rule will not effect licensure or certification. Other programs that do not rely on HCBS waiver funding may use those settings for their program participants.

No. The rule does not prohibit all disability-specific settings (that is, settings that only serve people with disabilities). However, the rule does require that people receiving home and community-based services have a choice of a non-disability-specific setting. Medicaid waiver programs have a responsibility to meet the requirements of the rule by offering choices to individuals during the person-centered planning process.

Settings must provide opportunities for participants to:

• Seek employment.
• Work in competitive integrated settings.
• Engage in community life.
• Receive services in the community.
• Interact with peers who do not have disabilities.
• Participate in community events and activities.
• Access and control personal resources.

The process includes:

• Completion of the Adult Residential Provider Self-Assessment, F-02117 (PDF).
• Validation of the self-assessment response by DHS review staff.
• Assistance to providers with settings that are not compliant.
• Relocation of waiver participants from settings that are not able to or do not wish to become compliant.
• Re-evaluation and ongoing monitoring of settings.

Ongoing monitoring and re-evaluation of settings began January 1, 1018, for assisted living facilities regulated and licensed by the Division of Quality Assurance (DQA).

The goal of DHS is to assist settings to come into compliance with the rule through the remediation process. If a setting cannot, or chooses not to, make changes that will allow compliance, the waiver program will work with people in that setting to provide other options that are in compliance with the rule.

The FAQs about Door Locks in Adult Long-Term Care Residential Settings, P-01817 (PDF) provides guidance to HCBS residential providers concerning the requirement in accordance with 42 C.F.R., Part 441.

No. With respect to a resident’s personal choice and privacy, the resident must be involved, to the extent he or she is capable, in any decisions regarding his or her personal possession and use of a key. The conditions that would prevent a resident from having a key must be specific to the resident’s assessed needs, and must be justified and documented in the resident’s individual service plan (or adult family home service plan) and member-centered plan, as applicable. The resident may choose to involve others, such as parents, a legal representative, or a significant other, in the decision. If a resident does not have possession of the key, it does not negate the resident’s right to lock his or her living unit when leaving the setting in order to safeguard belongings and ensure privacy.

Costs to the resident for key replacement should be reasonable (for example, actual cost of key copy or replacement, plus a small administrative fee). The cost must not be so prohibitive that a resident cannot afford to have a key. The process for, and cost of, replacing a key should be discussed, agreed to, and reflected in the resident’s key agreement.

As a general rule, when a resident loses a key, replacement of an entire lock should not be necessary unless there is a clear risk that a resident’s safety and privacy will otherwise be violated. This risk must be discussed with the resident. Any plans developed or actions taken must be documented in the resident’s individual service plan (or adult family home service plan) and member-centered plan.

If a resident is prone to misplacing or losing the key, it does not negate the resident’s right to have a key to lock his or her living unit when leaving the setting in order to safeguard belongings and ensure privacy. In consultation with the resident and his or her care management team, the setting may incorporate a procedure into the resident’s individual service plan and member-centered plan, as applicable, to hold the key in a safe place for the resident to use to enter his or her living unit at any time.

The FAQs about Access to Personal Funds and Resources in Adult Long-Term Care Residential Settings, P-02254 (PDF) provides guidance to residential providers concerning the requirement in accordance with 42 C.F.R., Part 441.

Information about resident rights training options can be accessed in several ways:

1. If you are a contracted provider, contact your managed care organization (PDF). The type and extent of training offered by each managed care organization varies.
2. Contact your county health and human services department. The type and extent of training offered by county human and social services departments vary.
3. Take the DHS Client Rights online training. There are two choices: a certificate module and a no-certificate module, both available at no cost. To print a certificate of completion, use your WAMS ID or go to the Wisconsin Access Management System to obtain an ID. Note: These modules provide information in the context of an inpatient facility rather than a community-based entity. However, the training content is consistent with resident rights standards. Also, content speaks more to client rights specialists than to service providers or direct caregivers.
4. View resident rights information in the DHS Adult Long-Term Care Resource Catalog. This catalog contains links to a wide variety of information and resources relevant to long-term care services and supports. To quickly access the resources, select Resident Rights from the Resource Category drop-down menu. The click the Find button.