Department of Health and Human Services 

OFFICE OF 

 
INSPECTOR GENERAL 

 
   
 
 
 
 
O Q
VERSIGHT OF  UALITY OF 

 
 
C M H
ARE IN  EDICAID  OME AND 

 
 
C -B S
OMMUNITY ASED  ERVICES 

 
W P
AIVER  ROGRAMS
 
 
 
Daniel R. Levinson 
  
Inspector General
  
 
June 2012 

OEI-02-08-00170 
  
   
EXECUTIVE SUMMARY:  OVERSIGHT OF QUALITY OF CARE IN MEDICAID HOME 
AND COMMUNITY-BASED SERVICES WAIVER PROGRAMS 
OEI-02-08-00170 
 
WHY WE DID THIS STUDY 
  
In recent years, States have altered their approach to providing Medicaid-funded long-term care 
services.   Rather than providing the majority of that care in institutionssuch as nursing homes 
States are now providing more care in homes and other community-based settings.   States most 
often provide this care through 1915(c) home and community-based services (HCBS) waiver 
programs, and the individuals served by these programs are most commonly disabled and over age 
65. In fiscal year 2010, Medicaid expenditures for HCBS waiver programs serving this population 
totaled an estimated $8.9 billion.  Strong oversight of waiver programs is critical to ensuring the 
quality of care provided to HCBS beneficiaries.  The beneficiaries who rely on HCBS waiver 
programs are among Medicaids most vulnerable, and the nature of these programs puts them at 
particular risk of receiving inadequate care.    
 
HOW WE DID THIS STUDY  
 
States must operate their HCBS waiver programs in accordance with certain assurances, including  
three assurances related to quality of care.  To meet these assurances, States must demonstrate that 
they have systems to effectively monitor the adequacy of service plans, the qualifications of 
providers, and the health and welfare of beneficiaries.  We based this study on a review of 
documents from the Centers for Medicare & Medicaid Services (CMS) most recent quality review 
of waiver programs from 25 States, as well as information gathered from structured interviews with 
staff from the 10 CMS regional offices.     
 
WHAT WE FOUND 
 
Seven of the twenty-five States that we reviewed did not have adequate systems to ensure the 
quality of care provided to beneficiaries. Although CMS renewed the waiver programs in all seven 
of these States, three did not adequately correct identified problems. Not only did these States fail 
to correct these problems before renewal of their programs, they also had still not adequately 
addressed the problems long after renewal.  In addition, CMS did not consistently use the few tools 
it has to ensure that States correct problems related to quality of care.  
 
WHAT WE RECOMMEND 
 
We recommend that CMS: (1) provide additional guidance to States to help ensure that they meet 
the assurances, (2) require States that do not meet one or more assurances to develop corrective 
action plans, (3) require at least one onsite visit before a waiver program is renewed and develop 
detailed protocols for such visits, (4) develop a broader array of approaches to ensure compliance 
with each of the assurances, and (5) make information about State compliance with the assurances 
available to the public. CMS concurred with four of the recommendations and partially concurred 
with our recommendation to require onsite visits. 
 
   
   
.
 
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................6 

Findings .......................................................................................................9 

Seven of the twenty-five States did not have adequate systems  

to ensure the quality of care provided to beneficiaries ....................9 

CMS renewed the waiver programs of three States that did not 

adequately correct problems related to quality of care ..................11 
 
CMS did not consistently use the few tools it has to ensure that       

States correct problems  related to quality of care ..........................12 

Conclusion and Recommendations ............................................................14 

Agency Comments and Office of Inspector General Response ....16 

Appendix: Agency Comments..................................................................17 

Acknowledgments .....................................................................................20 

 
 
 
   
   
OBJECTIVES 
1. 	  To determine the extent to which States had systems to ensure the 
quality of care provided to beneficiaries in home and 
community-based services (HCBS) waiver programs for the aged 
and/or disabled. 
2. 	  To determine the extent to which the Centers for Medicare & Medicaid 
Services (CMS) renewed waiver programs in States that did not 
adequately correct problems  related to quality of care. 
3. 	  To describe how CMS oversees States efforts to ensure the quality of 
care provided under these waiver programs.   
BACKGROUND 
In recent years, States have altered their approach to providing  
Medicaid-funded long-term care services.   Rather than providing the majority 
of that care in institutionssuch as nursing homesStates are now providing 
more care in homes and other community-based settings.  States most often 
provide this care through 1915(c) HCBS waiver programs, and the individuals 
served by these programs are most commonly disabled and over age 65.1  In 
fiscal year 2010, Medicaid expenditures for HCBS waiver programs serving 
this population totaled an estimated $8.9 billion.2  
Strong oversight of waiver programs is critical to ensuring the quality of care 
provided to beneficiaries. The beneficiaries served by these programs are 
among Medicaids most vulnerable, and the nature of these programs puts 
beneficiaries at particular risk of receiving inadequate care.  Some programs 
allow beneficiaries to be cared for by individuals with limited professional 
training, such as family members and neighbors.  In addition, beneficiaries may 
receive care in their homes, isolated from observers who might detect and 
prevent abuse or mistreatment.   
 
1
 Kaiser Commission on Medicaid and the Uninsured.  Medicaid Home and Community-
Based Services  Programs: Data Update, pp. 3-4. Accessed at  
http://www.kff.org/medicaid/upload/7720-05.pdf on May 18, 2012.  See also Kaiser 
Commission on Medicaid and the Uninsured and the University of California at San 
Francisco, Medicaid 1915(c) Home and Community-Based Service Waiver Participants, by 
Type of Waiver, 2008  Accessed at 
http://www.statehealthfacts.org/comparetable.jsp?ind=241&cat=4 on April 16, 2011. For 
background information on section 1915(c) of the Social Security Act, see footnotes 5, 6, and 
7. 
2
 Preliminary findings from Thomson Reuters, Medicaid 1915(c) Waiver Expenditures: 
2011 Update, Table 3, October 2011. 
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   1    
   
Federal agencies have raised concerns about the quality of care provided under 
these waiver programs.  Most notably, in 2003, the Government Accountability 
Office found that more than 70 percent of the programs it reviewed had 
problems with quality of care, such as failure to provide necessary services, 
weaknesses in beneficiaries service plans, and inadequate case management.3   
Further, in 2009, CMS found quality-of-care problems in Alaskas waiver 
programs and took the unprecedented step of placing a moratorium on 
enrollment in those programs, along with requiring a range of corrective 
actions.4     
Medicaid Coverage for Home and Community-Based Services 
In 1981, Congress significantly expanded the availability of HCBS by 
offering States the option of establishing Medicaid 1915(c) HCBS waiver 
programs.5  The HCBS waiver authority permits States to waive certain 
Medicaid requirements to provide a wide range of services to persons who 
otherwise would receive institutional care.6    
Each waiver program must serve individuals from one of the following three 
groups: persons who are aged (65 or older) and/or disabled, persons with 
intellectual and/or developmental disabilities, and persons with mental 
illnesses.7   As noted earlier, the majority of beneficiaries fall into the first 
group, with over 674,000 aged and/or  disabled beneficiaries receiving 
 
3
 General Accounting Office (now the Government Accountability Office), GAO-03-576, 
Long-term Care:  Federal Oversight of Growing Home and Community-Based Waivers 
Should Be Strengthened, June 20, 2003. 
4
 CMS Regional Office Letter to State Medicaid Agency Director, June 26, 2009,  
Re: Preliminary Observations, Findings and Required Corrective Actions, p.1. Accessed at 
http://www.hss.state.ak.us/dsds/cmsreview/AK_HCBS_Review_Preliminary_Letter_06-26
09.pdf on July  23, 2009. 
5 
This program  was established under section 1915(c) of the Social Security  Act, added by the 
Omnibus Budget Reconciliation Act of 1981, P.L. 97-35  2176. 
6 
Under  1915(c), CMS may waive the following Medicaid requirements:   
(1) StatewidenessStates  may cover services in only a portion of the State, rather than in all 
geographic jurisdictions; (2) comparability of servicesStates may limit HCBS waiver 
services to individuals in State-selected target groups who require an institutional level of 
care; and (3) certain financial eligibility requirementsStates may use more liberal income  
requirements for persons receiving HCBS.  See Social Security Act 1915(c)(3); CMS, 
Application for a  1915 (c) Home and Community-Based Waiver [Version 3.5]: Instructions, 
Technical Guide and Review Criteria, pp. 5-6 (January 2008).  
7 
 Waiver programs for the aged and/or disabled provide assistance to individuals over age 65 
and to those with physical or other disabilities under age 65.  Such programs would not serve  
persons from the other two groups, i.e., those who are intellectually or developmentally  
disabled or those who are mentally ill.  See 42 CFR  441.301(b)(6). 
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   2    
   
services in 2008.8  Under these programs, States may provide a wide range 
of servicessuch as case management services, homemaker services, and 
personal care servicesin a home or community-based setting for people 
who are eligible for institutional care.9  
Federal Requirements Related to Quality of Care 
States must operate their waivers in accordance with certain assurances 
identified in Federal regulations.10  CMS has designated six waiver 
assurances that States must include as part of an overall quality 
improvement strategy.11  Three of these assurances address Federal 
requirements related to the quality of care provided by waiver programs.12   
These requirements state that each beneficiary must have a written service 
plan based on an assessment of the individuals needs,13 each beneficiary 
must be served by qualified providers,14 and States must have necessary 
safeguards to protect the health and welfare of beneficiaries.15  CMS 
guidance describes how States are to meet the three quality-of-care 
assurances.16  
Before 2004, CMS determined whether States were meeting these 
assurances by conducting a review of a small sample of beneficiaries at 
least once during the life of the waiver program.  In 2004, CMS 
transferred the primary responsibility for monitoring waiver programs to 
the States.17  Currently, States are responsible for monitoring the quality of 
their own programs and for developing their own systems to continuously 
 
8
 Kaiser Commission on Medicaid and the Uninsured and the University of California at San 
Francisco, Medicaid 1915(c) Home and Community-Based Service Waiver Participants, by 
Type of Waiver, 2008. Accessed at 
http://www.statehealthfacts.org/comparetable.jsp?ind=241&cat=4 on February 6, 2012.
9
 42 CFR  440.180(b). 
10
 42 CFR  441.301 and 302. 
11
 CMS,  Application for a  1915(c) Home and Community-Based Waiver [Version 3.5]:  
Instructions, Technical Guide and Review Criteria, pp. 9-10 (2008).   
12
 The other three assurances relate to verifying that beneficiaries meet level-of-care 
requirements, having administrative authority for the operation of the waiver, and ensuring 
financial accountability of the waiver program. 
13
 42 CFR  441.301(b)(1)(i). Federal regulations use the term  plan of care, while CMS 
guidance uses the term service plan.  In this report, we use the term service plan.  
14
 42 CFR  441.302(a)(1) and (2). 
15 
42 CFR  441.302(a). 
16 
CMS, Application for a  1915(c) Home and Community-Based Waiver [Version 3.5]:  
Instructions, Technical Guide and Review Criteria, pp. 9-10 (2008).   
17
 CMS,  Interim Procedural Guidance for Assessing HCBS Waivers (2004).  
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   3    
   
monitor whether the State is meeting the assurances.  CMS also expects 
States to have strategies to correct any problems uncovered by their 
monitoring systems.   
The three quality-of-care assurances are as follows: 
 	  Service Plans.  For the service plan assurance, CMS requires each 
State to demonstrate that it has an adequate system for reviewing the 
service plans for beneficiaries in waiver programs.18  Such a system  
should ensure that the State periodically reviews plans to make sure 
that all beneficiaries needs are addressed and that their preferences are 
considered. CMS also requires each State to submit evidence 
illustrating its process for ensuring that beneficiaries actually receive 
the services listed in their plans.   
 	  Qualified Providers.  For the qualified provider assurance, CMS requires 
each State to demonstrate that it has designed and implemented an 
adequate system for ensuring that all waiver services are rendered by 
qualified providers.19  Each State must periodically verify that all of its 
providers meet its licensing and certification requirements, as well as any 
additional requirements for nonlicensed and noncertified providers 
established in the waiver application.    
	   Health and Welfare. For the health and welfare assurance, CMS requires 
each State to demonstrate on an ongoing basis that it is able to identify, 
address, and seek to prevent instances of abuse, neglect, and 
exploitation.20   When such instances are identified, CMS requires the 
State to take appropriate action and to look for any trends in 
implementing prevention strategies.  
Oversight of HCBS Waiver Programs 
CMS set forth its requirements and procedures for oversight of State waiver 
program operations in guidance documents issued to the States.21  In 
accordance with CMSs guidance, States first submit waiver applications to 
CMS describing the systems they will use to meet each of the assurances.  
 
18 
CMS, Updated Interim Procedural Guidance for Conducting Quality Reviews of Home and 
Community-Based Services (HCBS) Waiver Programs, pp. 15-16 (February 6, 2007).  
19 
Ibid, p. 17.  
20
 Ibid, p. 18.   
21
 Oversight activities described in this section are found in two CMS guidance documents:  
Instructions, Technical Guide and Review Criteria for Applications for a  1915(c) Home and 
Community-Based Waiver [Version 3.5]  (January 2008), and Updated Interim Procedural 
Guidance for Conducting Quality Reviews of Home and Community-Based Services (HCBS) 
Waiver Programs (February 6, 2007).   
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   4    
   
  States must describe the types of data they will collect, as well as their plans 
for correcting any identified problems.  Data collection can include 
beneficiary surveys or onsite visits. It can also include record reviews to  
determine whether all services were delivered in accordance with 
beneficiaries service plans.  If CMS determines that these systems are 
adequate and the waiver application meets applicable Federal requirements, 
the waiver program is approved for 3 to 5 years.22    
To determine whether States meet the required assurances, CMS regional 
office staff conduct quality reviews in which CMS requests that each State 
provide evidence from its monitoring systems.  This evidence should include 
summaries of data collected, as well as any actions taken by the State to 
correct the problems found by its monitoring systems.23    
After examining the evidence submitted by the State, CMS determines 
whether the State has met each assurance.  CMS provides this information to 
the State in a report that summarizes CMSs findings and conclusions about 
the States compliance with the assurances.  CMS may also include in the 
report recommendations to correct any problems identified during the 
review.  To give the State enough time to correct any problems, CMS sends 
the report at least a year before the expiration of the States waiver program.   
Generally a year after the quality review, the State submits an application to 
CMS to renew the waiver program.  CMS guidance states that before the 
agency can approve a program for renewal, it must be confident that the 
measures the State has taken or plans to take will correct the problems.   
If a State does not correct quality-of-care problems, CMS may require the 
State to develop and implement a corrective action plan.24  CMS may require 
such a plan after the State fails to meet one or more assurances during the 
quality review or at the time of the programs renewal.  As part of this plan, 
each State is expected to specify target dates to address any unmet 
recommendations and to submit additional evidence illustrating that it has 
corrected identified problems.   
 
22
 The initial waiver is for 3 years.  Each renewal of the waiver is for 5 years.  See 
42 U.S.C.  1396n(c)(3) and 42 CFR  430.25(h)(2)(i). 
23
 Note that CMS guidance refers to this process as discovery and remediation.  See 
Instructions, Technical Guide and Review Criteria for Applications for a  1915(c) Home and 
Community-Based Waiver [Version 3.5], p. 10  (January 2008). 
24
 For the purposes of this report, we use the term corrective action plan to mean any plan 
that CMS requires a State to develop so as to correct problems found in a waiver program.  
CMS generally refers to such plans as either corrective action plans or work plans.  
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   5    
   
In addition, CMS recommends that its regional offices conduct an onsite 
review of each waiver program at least once before the programs renewal.  
The regional offices may also conduct focused onsite reviews of programs 
that are not meeting all of the assurances.  These focused onsite visits 
address particular problems that CMS has identified and may not include an 
assessment of all areas.  CMS also has the authority to terminate a program  
that is not meeting one or more assurances.25  
Related Reports 
The Office of Inspector General (OIG) will issue a report on HCBS provided 
in assisted living facilities (ALFs).26   That evaluation determines the extent 
to which States comply with Federal waiver requirements for ALFs.   
METHODOLOGY 
Data Collection and Analysis 
We based this study on two data sources:  (1) a review of documentation for 
HCBS waiver programs, and (2) structured interviews with CMS staff from 
the 10 regional offices.   
Scope 
To provide the most current assessment of the waiver programs and CMSs 
review process, we focused on the States that had 1915(c) HCBS waiver 
programs for the aged and/or disabled that were reviewed under CMSs most 
recent guidance.  Specifically, we reviewed programs for which:  (1) CMS 
had performed its quality review using the most recent guidance, which was 
updated in February 2007; and (2) the State had applied for renewal using 
the most recent version of the application, which was updated in 
January 2008. We identified 33 waiver programs that were administered by 
25 States.27    
Data Collection 
Review of Documentation.  We requested documentation from the CMS 
regional office responsible for each of these waiver programs.  This 
documentation spanned from December 2006 through February 2011.  
Specifically, we requested:    
(1)   evidence that each State provided to CMS for the quality review 
regarding the three assurances.  This was usually summarized evidence 
 
25 
42 CFR  441.304(d). 
26
 OIG, Home and Community-Based Services in Assisted Living Facilities, 

OEI-09-08-00360, forthcoming.
  
27 
In 2009, 110 waiver programs for the aged and/or disabled were in operation.   

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   6    
   
of the different elements of the States monitoring systems, such as 
beneficiary survey results, quarterly reports of home visits, and provider 
training attendance logs. 
(2) 	  documents from CMSs most recent quality review of each State, 
including the findings report. This report typically includes a detailed 
description of the States monitoring systems and of instances in which 
CMS found that evidence of these systems was inadequate or lacking.  
It also includes CMSs determination of whether the State met each 
assurance. 
(3) 	  documents from any CMS-conducted onsite visits of the State.  
(4) 	  documents about any followup activities that were conducted by CMS 
or the State after the quality review was completed, including any 
updates on corrective actions taken by the State. 
(5) 	  CMSs assessment of the renewal application, including any documents 
that the State submitted in response to CMSs inquiries during the 
review of the application. 
Interviews with CMS regional officials. We conducted structured 
interviewseither in person or over the telephonewith CMS officials 
from the 10 regional offices.  We discussed the quality review process and 
the evidence that States submitted to demonstrate that they met each 
assurance. In addition, we asked about how officials ensure that the States 
met the assurances, including how they use corrective action plans and 
onsite visits.  Finally, we asked for additional information, where necessary, 
to corroborate and supplement the information from our documentation 
review.   
Analysis  
To describe States monitoring systems to ensure the quality of care provided 
to beneficiaries, we reviewed the documents from CMSs most recent 
quality review of each States programs as well as the information gathered 
from our interviews.  We conducted this analysis by State, rather than by 
program, because the States are responsible for ensuring that their programs 
meet the assurances. 28   We considered a State to have met an assurance if 
CMS determined in its report that [t]he State substantially meets the 
assurance or [t]he State demonstrates the assurance but CMS recommends 
improvements.  Conversely, we considered a State to be out of compliance 
with an assurance if CMS determined that [t]he State does not fully or 
 
28
 Of the 25 States, 19 States had 1 waiver program, 5 States had 2 waiver programs, and  
1 State had 4 waiver programs.  
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   7    
   
substantially demonstrate the assurance or [t]he State does not 
demonstrate the assurance.29   We also analyzed the data to identify practices 
of States that met the assurances.  These data are generally not available to 
the public. We conducted this analysis in order to describe the differences 
among States monitoring systems, as well as to describe the types of 
problems generally identified by CMS.  
To determine the extent to which CMS renewed waiver programs for States 
in which the quality reviews found that one or more assurances were not 
met, we reviewed CMS documents about any followup activities between 
CMS and the States and the information gathered from the interviews.  We  
then determined how many of these States had still not corrected problems 
(1) at the time of renewal and (2) as of early 2011.  
To determine the extent to which CMS used existing tools to ensure 
compliance with the assurances, we reviewed CMS documents and interview 
data. We determined whether CMS officials required States that did not 
meet one or more of the assurances to develop corrective action plans and 
whether CMS officials conducted any onsite visits or focused onsite visits 
with these States.   
Limitations 
We did not independently assess the accuracy of CMSs determinations 
about whether States met the three assurances.  In addition, our findings 
cannot be generalized to the other States or their waiver programs. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
 
29
 CMS guidance instructs staff responsible for conducting quality  reviews to select one of 
these four categories when determining whether a waiver program  meets each assurance.  See 
CMS,  Updated Interim Procedural Guidance for Conducting Quality Reviews of Home and 
Community-Based Services (HCBS) Waiver Programs, pp. 28-30 (February 6, 2007).   
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   8    
   
FINDINGS 
Seven of the twenty-five States did not have adequate 
systems to ensure the quality of care provided to 
beneficiaries 
As previously noted, States must meet  three assurances designed to protect 
beneficiaries and ensure the quality of care they receive under the waiver 
programs.  States must develop and implement their own monitoring 
systems to ensure that they meet each of these assurances.  CMS determines 
whether a State meets each assurance by conducting a quality review.  When 
a State does not demonstrate that it meets one or more assurances during the 
quality review, the State is unable to ensure the quality of care provided to 
beneficiaries. 
During its quality reviews, CMS found that 7 of the 25 States did not meet  
1 or more of the 3 quality-of-care assurances for 1 of their waiver programs.  
In these cases, the States did not have adequate monitoring systems to ensure 
quality of care. Three of these seven States did not meet any of the 
assurances. 
Six States did not meet the service plan assurance  
A monitoring system for service plans should ensure that the State 
periodically reviews plans to ensure that beneficiaries needs are addressed.  
States must also have systems to verify that beneficiaries actually received 
the services listed in their plans and that all plans have been assessed and 
updated at least annually.  Without adequate monitoring systems, States may 
not be able to ensure that the services that they are paying for are actually 
provided and that beneficiaries are receiving all of the services they need. 
CMS found that six States did not have adequate systems to monitor service 
plans. Notably, one State had no method for determining whether services 
were provided according to beneficiaries service plans.  As one CMS 
official noted, Some States really have no monitoring systems [for service 
plans] at all. Four States did not review an adequate sample of service 
plans to ensure that all plans were assessed and updated.  CMS allows States 
to monitor program performance by evaluating the entire population, if it is 
small enough, or by evaluating a sample of the population.  If the sample is 
not representative of all beneficiaries service plans, the State cannot claim 
that it adequately monitors service plans, and CMS cannot conclude that the 
State complies with the service plan assurance.  
Additionally, CMS found that four States had inadequate strategies to correct 
problems found in the service plans.  For example, one of these States 
discovered that service plans were not being consistently updated but failed 
to implement any strategies to correct this problem.  
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   9    
   
In contrast, the States that met this assurance had several practices to ensure 
the quality of their service plans.  For example, one State reviewed service 
plans multiple times throughout the year and assigned different experts to  
assess various aspects of the plans.  The State also selected a sample of 
service plans to review to ensure that the services in the plan matched the 
Medicaid claims submitted for the beneficiaries.   
Five States did not meet the qualified provider assurance 
A monitoring system for qualified providers should ensure that all providers 
meet the States licensing and certification requirements, as well as any 
additional requirements established in the HCBS waiver application for 
nonlicensed and noncertified providers.  CMS officials noted that it is 
critical to verify that providers are qualified before they render services to 
beneficiaries. States without adequate systems for monitoring provider 
qualifications may expose beneficiaries to providers with poor qualifications 
or criminal backgrounds.   
CMS found that five States did not have adequate systems to ensure that 
providers are qualified to render care.  Notably, CMS identified two States 
that allowed caregivers to provide services before the State received the 
results of criminal background checks.  One of these States also allowed 
providers to self-report whether they were qualified without requiring any 
documentation to support their assertions.  Another State did not review an 
adequate sample of provider records and, therefore, did not adequately 
monitor its providers. CMS found that another State did not attempt to 
verify the qualifications of noncertified providers and that some States did 
not verify that providers received the training necessary to provide services.   
In contrast, the States that met this assurance had several practices to ensure 
that all HCBS providers had appropriate qualifications.  For example, one 
State reviewed provider qualifications and conducted onsite visits with each 
provider before allowing the provider to enroll in the HCBS program.  The 
State regularly scheduled visits with beneficiaries to assess their satisfaction 
with providers. It also  tracked license expirations electronically, 
automatically decertifying providers who did not renew their licenses.  
Several CMS officials stated that using such electronic systems strengthens 
the monitoring of HCBS providers.   
Four States did not meet the health and welfare assurance  
A monitoring system for health and welfare should identify instances of  
beneficiary abuse, neglect, and exploitation.  CMS expects that States will 
take appropriate action when such instances have been identified and 
implement prevention strategies based on analyses of trends.  Without such 
monitoring systems, the States are not able to adequately ensure the health  
and welfare of their beneficiaries.   
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   10    
   
CMS found that four States did not meet the health and welfare assurance.  
Specifically, two of the four States lacked a systemsuch as an incident 
tracking systemto catalog and track instances of alleged abuse, neglect, or 
exploitation of beneficiaries. One of these States relied solely on self-
reported data from beneficiary surveys as its only means of such monitoring, 
which CMS considered insufficient.   
In the two other States, CMS found problems with the existing incident 
tracking systems.  One of these States did not require that incidents of 
suspected abuse, neglect, or exploitation be reported, so there was no 
assurance that such incidents were appropriately tracked.  The other State 
did not have adequate documentation of such incidents or adequate 
documentation of any followup actions that had been taken.  
In contrast, the States that met this assurance had several practices to ensure 
that the health and welfare of beneficiaries were protected.  For example, 
one State interviewed beneficiaries and providers in person and mailed a 
survey to beneficiaries annually to gauge their satisfaction with the program.  
If beneficiaries noted concerns, they were relayed to the appropriate program  
staff for followup.  The State also had a system to track and correct incidents 
of alleged abuse or neglect,  as well as a system to collect information on 
suspicious deaths. Additionally, the State coordinated with other State 
agencies, when necessary, to review and resolve cases in which 
beneficiaries health and welfare were at risk.  Several CMS officials 
stressed the importance of this interagency coordination, which helps a State 
track whether an incident has been resolved by another agency. 
CMS renewed the waiver programs of three States that 
did not adequately correct problems related to quality of 
care 
In instances in which CMS has identified serious problems with a waiver  
programsuch as not meeting an assurancethe State must correct the 
problems.  CMS guidance states that before the agency can approve a 
program for renewal, it must be confident that the measures that the State 
has taken, or plans to take, will adequately address the problems.   
Although CMS renewed the waiver programs in all seven States that did not 
meet one or more assurances, three of these States did not adequately correct 
problems that CMS identified during its quality reviews.  Not only did these 
States fail to correct these problems before the renewal of their programs, 
but two of them still had not adequately addressed the problems almost 
3  years after renewal, and the third had not adequately addressed the 
problems over a year after renewal.   
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   11    
   
CMS officials noted that one State had a pervasive problem with its 
approach to quality management and improvement that spanned the States 
many waiver programs.  By the time of the programs renewal, the State had 
still failed to provide evidence that it had fixed all the problems uncovered 
by the quality review.  Specifically, the State did not demonstrate to CMS 
that it had made sufficient progress to ensure that service plans were 
adequate, consistently revised, or updated.  Also, it still could not 
demonstrate that it could verify the qualifications of noncertified providers 
or that it could adequately document incidents or any followup related to 
those incidents. In spite of these problems, CMS renewed the program.   
The second State had provided CMS with plans to make improvements.  
However, by the time of renewal, it could not demonstrate to CMS that it 
could monitor whether beneficiaries were receiving all of the services 
identified in their service plans. In addition, it still could not demonstrate 
that services were provided by qualified providers. 
For the third State, CMS officials reported that, although at the time of 
renewal the State provided evidence of having some monitoring systems, it 
still could not demonstrate that criminal background checks were reviewed 
before caregivers were allowed to provide services.  In addition, the State 
still did not appear to have strategies to correct problems uncovered by its 
existing monitoring systems.     
None of the three States had made the necessary changes to their waiver 
programs, even though for two of them almost 3 years had passed since the 
time of renewal.  For the third State, more than 1 year had passed since the 
time of renewal.  CMS officials explained that, although CMS has the 
authority to terminate programs when States do not meet assurances, it 
generally does not do so because these programs serve vulnerable 
beneficiaries who might be left without critical services.  
CMS did not consistently use the few tools it has to 
ensure that States correct problems related to quality of 
care 
Short of terminating a waiver program, CMS has few tools to ensure that 
States correct problems  found during the quality reviews.30  Furthermore, 
CMS does not consistently use the tools at its disposalsuch as corrective 
action plans or onsite visitsto ensure that States make necessary changes 
and comply with the assurances.  
 
30
 Despite CMSs having placed a moratorium on enrollment in the Alaska waiver programs 
in 2009, CMS officials reported that the agency needs additional regulatory authority to use 
such tools in the future.   
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   12    
   
CMS did not require corrective action plans from three of the 
seven States that did not meet assurances  
CMS may require States to develop and implement corrective action plans if 
they have not corrected problems and cannot ensure the quality of care 
provided to beneficiaries. Several CMS officials noted that they would 
require that a State develop a corrective action plan if it did not meet one or 
more assurances during the quality review.  However, of the seven States 
that did not meet one or more assurances, CMS did not require three to 
develop corrective action plans. CMS does not have guidance about when to 
require corrective action plans, what these plans should contain, or how 
frequently States should report their progress.   
CMS did not conduct onsite visits with two of the seven States 
that did not meet assurances 
CMS guidance recommends that onsite visits be conducted at least once 
before a waiver programs renewal and that focused onsite visits (i.e., site 
reviews focusing on particular issues of concern) be conducted for programs 
that are not meeting all of the assurances.  Despite this, CMS did not conduct 
any onsite visits with two of the seven States that did not meet one or more 
assurances. Such visits may be useful in determining the extent to which  
beneficiaries could be negatively affected by problems found during CMSs 
quality reviews. Notably, CMS did conduct onsite visits with six additional 
States in our review that had met the assurances.  Also, CMS did not conduct 
focused onsite visits with any of the States in our review.  Several officials 
noted that CMS guidance is limited on when and how to conduct onsite 
visits and that better protocols for how to conduct reviews during these visits 
would be helpful.        
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   13    
   
CONCLUSION AND RECOMMENDATIONS 
States must operate their HCBS waiver programs in accordance with certain 
required assurances, including three related to quality of care.  CMS does not 
directly monitor the delivery of HCBS services to beneficiaries.  Rather, 
CMS requires States to have strong monitoring systems to ensure that (1) the 
services provided meet beneficiaries needs, (2) these services are rendered 
by qualified providers, and (3) instances of abuse and neglect are identified 
and addressed. If these assurances are not met, beneficiaries health and 
safety may be at risk.   
During its quality reviews, CMS found that 7 of the 25 States did not meet 
1  or more of the 3 required assurances.  These States did not have adequate 
systems to monitor the quality of care provided to beneficiaries.  Despite the 
fact that three of these States did not adequately correct identified problems, 
CMS renewed their waiver programs. Lastly, CMS did not consistently use 
its few tools, namely, corrective action plans and onsite visits, to ensure that 
States correct problems and comply with the assurances.   
Together, these findings suggest the need for increased oversight by CMS 
and monitoring by States to ensure that quality care is provided to 
beneficiaries in HCBS waiver programs.  We recommend that CMS: 
Provide Additional Guidance to States to Help Ensure That They  
Meet the Assurances   
CMS should provide additional guidance to States about the elements of 
strong monitoring systems.  As part of this guidance, CMS should identify 
and provide States with examples of effective practices for meeting each of  
the assurances, some of which are highlighted in this report.  States can use 
this guidance to improve their monitoring systems and better ensure that 
their waiver programs provide quality care to beneficiaries.  CMS could 
provide this assistance as a part of its continuing communication with the 
States.  
Require States That Do Not Meet One or More Assurances to 
Develop Corrective Action Plans   
When States do not meet one or more assurances during the quality reviews, 
CMS should require them to develop a corrective action plan for each waiver 
program that fails to meet those assurances.  CMS should develop standard 
protocols for these corrective action plans, including when to require them, 
what States should include in the plans, and how frequently States should 
report their progress to CMS. This would enable CMS to hold States more 
accountable. 
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   14    
   
Require At Least One Onsite Visit Before a Waiver Program is  
Renewed and Develop Detailed Protocols for Such Visits   
CMS should require that regional offices conduct an onsite visit at least once 
before a waiver programs renewal. CMS should also require regional 
offices to conduct more frequent onsite visits or focused onsite visits when 
States do not meet one or more assurances or when States demonstrate 
continued difficulty in meeting the assurances.  By conducting these visits 
more frequently, CMS would be better able to gauge the extent of any 
problems noted during its quality reviews and determine whether any 
progress has been made in correcting these problems.   
CMS should also provide detailed protocols for both regular and focused 
onsite visits that include guidelines for when these visits should be 
conducted. These protocols should also include instructions for conducting 
these visits, such as how best to assess States monitoring systems while 
onsite.   
Develop a Broader Array of Approaches to Ensure Compliance  
With Each of the Assurances  
CMS has the legislative authority to terminate a waiver program with serious 
problems but rarely does so, as termination may leave thousands of 
beneficiaries without critical services.  Short of termination, CMS has few 
tools to ensure that States correct problems.  CMS should seek a broader 
array of approaches to address the continual failure of some States to comply 
with the assurances.  These approaches could include seeking additional 
legislative authority to issue moratoria on future enrollment in poorly 
performing States.  Other approaches could include seeking legislative 
authority to withhold a portion of Federal funding when other corrective 
efforts are unsuccessful.   
Make Information About State Compliance With the Assurances  
Available to the Public    
CMS should make information available to the public about whether 
States meet each of the assurances during the quality reviews.  CMS could 
summarize this information or publish the final reports detailing the 
findings of its quality reviews. CMS could also include information on 
corrective actions taken by States that did not meet the assurances.  Public 
disclosure would further compel States to comply with the assurances and 
would provide beneficiaries and their families with needed information 
about the extent to which States have systems to ensure quality care. 
   
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   15    
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with four of our five recommendations and partially 
concurred with one. CMS agreed that because of the increase in waiver 
services and the vulnerabilities of many of the waiver recipients, strong 
oversight of waiver programs is critical.   
CMS concurred with our first recommendation and stated that, through a 
series of bimonthly Quality Forums with the States, it will ensure that  
providers receive guidance to improve their monitoring systems.  CMS 
concurred with our second recommendation and stated that it will develop a 
standard protocol for corrective action plans.  
CMS partially concurred with our third recommendation and stated that it 
plans to develop a standard protocol for conducting site visits.  However, it 
noted that it reserves the discretion to determine when site visits might not 
be required. It stated that it intends to evaluate the need for site visits on a  
case-by-case basis, taking into account the seriousness of the possible 
assurance failures and the availability of CMS resources.  
CMS concurred with our fourth recommendation and stated that it will 
address the issues of intermediate steps for corrections when a State fails to 
meet an assurance and that it will ensure that all central and regional office 
staff have knowledge of the options.  CMS also stated that it issued a Notice 
of Proposed Rule Making for the waiver in which it addressed the issue of 
corrective actions and that it will determine whether legislation is necessary 
to provide stronger and more viable options.  Finally, CMS concurred with 
our fifth recommendation and stated that it will explore the options for how 
to best make the disclosure of quality reviews available to the public.   
The full text of CMSs comments is provided in the appendix.  
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   16   APPENDIX 
Agency Comments 
DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
Administrator 
Washington, DC 20201 
APR  1 22012
DATE: 
TO: 	 Daniel R. Levinson 
IDspector General 
FROM: 	 Mari~n-TaV'eooer 
Acting Administrator 
SUBJECT: 	 Office of Inspector General (OIG) Draft Report: "Oversight of Quality of Care in 
Medicaid Home and Community-Based Services Waiver Programs" 
(OEI-02-08-00170) 
Thank you for the opportunity to review and comment on the OIG draft report: Oversight of 
Quality of Care in Medicaid Home and Community-Based Services Waiver Programs 
(OEl-02-08-00170). The purpose of this report was to:  I) assess the extent to which States had 
systems in place to ensure the quality of care provided to beneficiaries in home and community
based services (HCBS) waiver programs for the aged and disabled; 2) determine the extent to 
which the Centers for Medicare & Medicaid Services (CMS) renewed waiver programs in States 
that did not adequately correct problems related to quality of cai:e; and 3) describe how CMS 
oversees States' efforts to ensure the quality of care provided under these waiver programs. 
As noted by the report, States are increasing their coverage for HCBS over institutional services 
for Medicaid beneficiaries who have chronic needs, and a primary method of delivery for HCSS 
is through 19J5(c) waiver programs. CMS agrees that, because of this increase and the 
vulnerabilities of many of the HCBS waiver program recipients, strong oversight of waiver 
programs is critical.  . 
OIG Findings 
The OIG reviewed 33 waiver programs in 25 States that had used the version of the application 
updated in January 2008.  . 
States must operate their HCSS waiver progranls in accordance with certain required assurances, 
including three assurances related to quality of care. eMS does not directly monitor the delivery 
of HeBS services to beneficiaries. 
The OIG found that during its quality reviews, eMS found that 7 of the 25 States did not meet I 
or more of the 3 required assurances. These States did not have adequate systems in place to 
monitor the quality of care provided to beneficiaries.  In addition, CMS renewed the waiver 
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)  17   
   
 
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   18    
   
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   19    
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Jodi Nudelman, Regional 
Inspector General for Evaluation and Inspections in the New York regional office, 
and Meridith Seife, Deputy Regional Inspector General. 
Judy Kellis served as the team leader for this study.  Other principal Office of 
Evaluation and Inspections staff from the New York regional office who 
contributed to the report include Lucia Fort and Shanti Nandiwada; central office 
staff who contributed include Kevin Farber and Tasha Trusty. 
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170)   20    
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office  of Inspector General (OIG), as mandated  by Public Law 95-452, as  
amended, is  to protect  the integrity  of the  Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of  beneficiaries served by  those 
programs.  This statutory mission  is  carried out  through a nationwide network of audits,  
investigations, and inspections conducted  by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services for HHS, either by  conducting  
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of  HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended to provide independent assessments of 
HHS  programs and operations.  These assessments help  reduce waste, abuse, and  
mismanagement and promote  economy and efficiency throughout HHS. 
Office of Evaluation  and Inspections 
The Office of Evaluation and  Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and  reliable information on  significant 
issues.  These evaluations focus on preventing  fraud, waste,  or  abuse and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports  also present practical recommendations for improving program operations.  
Office of Investigations 
The  Office of Investigations (OI) conducts criminal, civil,  and administrative investigations  
of fraud and misconduct  related to HHS programs, operations, and  beneficiaries.  With 
investigators working in all 50  States and the District of  Columbia, OI utilizes its resources 
by actively  coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative  efforts of OI often  lead to criminal  
convictions, administrative sanctions, and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General  
The  Office of Counsel to the Inspector General (OCIG)  provides  general legal services  to  
OIG, rendering advice and  opinions on  HHS  programs and  operations  and providing all 
legal support for OIGs  internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary  penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity  agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides  other 
guidance to the health care industry concerning the anti-kickback statute and other OIG  
enforcement authorities.