HCBS Settings Rule: Heightened Scrutiny

The home and community-based services (HCBS) settings rule requirements define the qualities of settings that are eligible for reimbursement of Medicaid home and community-based services. The federal rule also 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 non-residential setting meets one of the above criteria, then the setting will require additional review (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 care 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.

*The Centers for Medicare & Medicaid Services' (CMS) definition of public institution 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. The Wisconsin Department of Health Services (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 the evidence indicates that the setting is home and community-based, DHS will provide the evidence to CMS for review. CMS will consider evidence and issue a decision.

Contact information

If you cannot find the answer to your question, send us an email or call 877-498-9525.

The information provided on this page is published in accordance with 42 C.F.R. 441.301(c)(4).

Last Revised: October 31, 2019