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HCBS Settings Rule: Compliance for Nonresidential Services Providers

The home and community-based services (HCBS) settings rule was published in 2014 by the Centers for Medicare & Medicaid Services (CMS). The federal requirements define the qualities of settings eligible for reimbursement for Medicaid home and community-based services. Under the requirements, DHS must ensure that settings in which HCBS are provided meet and remain in compliance with the settings rule requirements.

Nonresidential settings subject to the HCBS settings rule are:

HCBS settings rule requirements

All nonresidential settings must meet conditions that ensure specific rights of people receiving HCBS in those settings, including the following qualifications: 

  • Is integrated in, and supports full access to, the greater community.
  • Provides opportunities to seek employment, work in competitive integrated settings, engage in community life, and control personal resources.
  • Ensures that individuals receive services in, and access to, the greater community to the same degree of access as individuals not receiving HCBS.
  • Is selected by the individual from among multiple setting options, including non-disability specific settings. 
  • Ensures an individual’s rights of privacy, dignity and respect, and freedom from coercion and restraint. 
  • Optimizes individual initiative, autonomy, and independence in making life choices, including but not limited to, daily activities, physical environment, and with whom to interact.
  • Facilitates individual choice regarding services and supports, and who provides them

Settings must meet all HCBS rules and be determined HCBS compliant to be eligible to provide services under the following Medicaid waiver programs:

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

An HCBS compliant determination does not guarantee a contract to provide services.


Providers can review benchmark requirements with the federal settings rule for specific nonresidential settings.

Watch this tutorial to learn more about the HCBS compliance process: Introduction to Home and Community-Based Nonresidential Benchmarks and Review Process

View the PowerPoint slides (PDF)

Nonresidential provider settings: compliance status

A list of nonresidential provider settings and their compliance status is available in the HCBS Nonresidential Settings Compliance List (Excel).

Contact information

To request a copy of the evidentiary document checklist and submission instructions for adult day settings, prevocational settings, group supported employment settings, and children’s day services settings, email or call 608-261-6393.

*For more information on HCBS settings rule compliance for adult day care settings, email or call 608-266-7297.

HCBS settings rule citation

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

Last revised October 3, 2023