DEPARTMENT OF HEALTH & HUMAN SERVICES      
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
 
              SMD # 16-011 
 
RE: Community First Choice State Plan 
Option 
December 30, 2016 
   
Dear State Medicaid Director: 
 
This letter provides guidance on the implementation of the Community First Choice State Plan Option, a 
home and community-based benefit package available to states to promote community integration.  
Section 2401 of the Affordable Care Act amended section 1915 of the Social Security Act (the Act) to 
add 1915(k) as a new subsection, the benefit known as Community First Choice (CFC).  Under section 
1915(k) of the Act, states have the option to amend their state plan to provide home and community-based 
attendant services and related supports. CFC final regulations1 were published May 7, 2012, and the final 
regulations for home and community-based setting requirements for CFC2 were published January 16, 
2014.  CMS is committed to helping support states interested in adding the CFC option to their Medicaid 
state plan, and to aid in that effort we are providing a state plan amendment (SPA) pre-print and CFC 
technical guide.  
 
Background  
 
The purpose of the CFC option is to provide individuals meeting an institutional level of care the 
opportunity to receive necessary personal attendant services (PAS) and supports in a home and 
community-based setting.  The CFC option expands Medicaid opportunities for the provision of home 
and community-based long-term services and supports (LTSS) and is an additional tool that states can use 
to facilitate community integration while receiving enhanced Federal match of six (6) additional 
percentage points for CFC services and supports.  There is a growing trend towards home and 
community-based services instead of institutional care.  In 2013, 51.3 percent of the dollars spent 
nationally on Medicaid LTSS was for community-based supports, signifying the first time Medicaid 
expenditures for these services exceeded institutional care.  In 2014, the percentage grew to 53.1 percent.3   
It is clear that CMS and states are committed to making additional progress, and the CFC benefit can be 
used to expand the availability and scope of LTSS.  This can include reinvesting the additional Federal 
Medical Assistance Percentage (FMAP) to provide new PAS, increase the comprehensiveness of existing 
PAS, and enhance the states overall LTSS program.     
 
                                                 
1 http://www.medicaid.gov/medicaid-chip-program-information/by-topics/long-term-services-and-supports/home-
and-community-based-services/downloads/cfc-final-regulation.pdf 
 
2 https://www.federalregister.gov/articles/2014/01/16/2014-00487/medicaid-program-state-plan-home-and-
community-based-services-5-year-period-for-waivers-provider 
 
3 Wenzlow, Audra, Steve Eiken, and Kate Sredl. 2016. Improving the balance: The Evolution of Medicaid 
Expenditures for Long-Term Services and Supports (LTSS), FY 1981-2014.  Prepared for CMS by Truven Health. 
Retrieved from 
https://www.medicaid.gov/medicaid/ltss/downloads/evolution-ltss-expenditures.pdf 
  Page 2  State Medicaid Director 
 
As states continue to engage stakeholders in the development of home and community-based services, 
CMS encourages consideration of CFC as a meaningful option to rebalance long-term care expenditures 
and increase the availability of home and community-based options.  
 
CFC can help reduce the administrative complexity that results from having multiple authorities to 
provide similar types of services across different populations.  While different benefit authorities, such as 
1915(c) Home and community-based waivers and 1915(i) Home and community-based state plan 
services,  may provide states the flexibility to target services and populations, this may result in 
inconsistency in the levels and types of services available across populations.  It may also make it difficult 
to manage and coordinate services across programs with different eligibility criteria and different 
assessment tools in use.  The CFC option allows services to be available across populations for people 
who meet the institutional level of care, in accordance with need and regardless of the type, nature or 
severity of disability, thus making it possible to standardize eligibility and needs assessments while better 
coordinating services. 
 
PAS are utilized by individuals across all conditions and disabilities, and there is not one population with 
an institutional level of care need that would benefit from PAS more than another.  Making services 
available to individuals across all institutional levels allows states to streamline access to PAS, by 
focusing on an individuals functional needs, rather than type of disability.  CFC offers states the 
opportunity to provide personal assistance and related services in a coordinated manner that highlights 
self -direction, person-centered planning, and flexible service delivery.   
Individuals receiving CFC services are not precluded from receiving other home and community-based 
long-term care services and supports through other Medicaid state plan, waiver, grant, or demonstration 
authorities.  The CFC benefit should be used in conjunction with other services (Medicaid funded and 
non-Medicaid funded) to support an individuals opportunity for full community integration. 
Enhanced Federal Medicaid Assistance Percentage (FMAP) 
States will receive a six percentage point increase to the FMAP calculated under 1905(b), not to exceed 
100 percent, for the provision of CFC services and supports.  For example, a state that regularly receives 
50 percent FMAP would receive a six percentage point increase resulting in 56 percent FMAP for 
services authorized through the CFC state plan option.  The enhanced FMAP is only applicable for the 
provision of CFC supports and services provided directly to individuals who meet the eligibility 
requirements described in 42 CFR 441.510 (such as attendant care services, person-centered planning, 
and financial management services).  States must adhere to the free choice of provider requirements at 42 
CFR 431.51, unless provided through a managed care arrangement or authorized under selective 
contracting authority.     
There are various activities that are performed for the proper and efficient administration of the Medicaid 
state plan, including for activities related to CFC services, such as level of care determinations, quality 
management, data collection, implementation of the Development and Implementation Council required 
under CFC and administrative costs related to implementation of a fiscal agent structure. The state 
expenditures for these activities will be matched at the 50 percent administrative claiming rate, rather than 
the CFC enhanced match.    
To the extent a state seeks administrative match for the above mentioned activities, and the activities have 
not been documented within either a states Public Assistance Cost Allocation Plan (PACAP) or a 
Medicaid Administrative Claiming (MAC) Plan, the state will have to amend its PACAP or MAC Plan to 
document these activities and receive administrative match.  CMS is available to provide technical 
assistance on any needed amendments.   Page 3  State Medicaid Director 
 
Program Eligibility   
Section 1915(k) of the Act did not create a new eligibility category for the CFC state plan option.   
Therefore, coverage for 1915(k), like other state plan services, is dependent on an individual meeting all 
of the requirements for a Medicaid eligibility category covered under the state plan to which the 1915(k) 
benefit is made available.  
Individuals who are eligible for medical assistance under the HCBS waiver-related category described in 
435.217 (Individuals receiving home and community-based services) must meet all the 1915(c) waiver 
requirements, including the receipt of the minimum number of waiver services identified in the waiver, to 
maintain eligibility for medical assistance and access the CFC state plan option. Receipt of state plan 
1915(k) services is not a basis for maintaining Medicaid eligibility for this category.  
 
The CFC benefit includes specific program eligibility criteria that states must adhere to when determining 
who can receive the CFC benefit.  These requirements are summarized as follows:  
 
Level of Care Requirement (42 CFR 441.510) 
Individuals receiving CFC benefits must meet one of the following institutional levels of care:  
(long-term) hospital, a nursing facility, an intermediate care facility for individuals with 
intellectual disabilities, an institution providing psychiatric services for individuals under age 21, 
or an institution for mental diseases for individuals age 65 or over. States must include all levels 
of care required by the CFC statute and implementing regulations that are covered in their state.  
States may not develop a CFC benefit that is targeted to a specific population.  For example, a 
CFC benefit could not only be available to individuals who meet a nursing facility level of care.  
States must have a process to determine CFC eligibility for individuals based on the level of care 
for the setting in which the individuals would have received institutional services.  
 
Financial Eligibility 
In addition to being eligible for Medicaid under the state plan authority, individuals must meet 
one of two eligibility requirements specific to the CFC benefit.  If an individual is in an eligibility 
category covered under the Medicaid state plan to which coverage for nursing facility services is 
available, no separate income test is applied to determine the individuals eligibility for coverage 
of CFC (441.510(b)(1)).  However, if an individual is not in such an eligibility category, the 
individual not only must meet any income test applicable to the Medicaid eligibility group, but 
must have income that is at or below 150 percent of the federal poverty level (FPL) in order to be 
eligible to receive coverage of CFC (441.510(b)(2)).  The determination of whether an 
individuals income is at or below 150% of the FPL must be based on the same methodologies as 
would apply to the category under the Medicaid state plan in which the individual is enrolled, 
including application of any disregards approved under the state plan in accordance with section 
1902(r)(2) of the Act.  
Additionally, section 2404 of the Affordable Care Act mandates that, for the five-year period 
beginning January 1, 2014, the definition of an institutionalized spouse in section 1924(h)(1) of 
the Social Security Act (the spousal impoverishment statute) includes married individuals who 
are eligible for, among other things, medical assistance for home and community-based 
attendant services and supports under section 1915(k). . . . The Centers for Medicare & 
Medicaid Services (CMS) issued 2015 guidance to states on how this provision should be applied 
(Affordable Care Acts Amendments to the Spousal Impoverishment Statute).  CMS reminds 
states that are interested in adopting, or have adopted, the 1915(k) benefit that Medicaid  Page 4  State Medicaid Director 
 
eligibility for married individuals should be determined in a manner consistent with our May 
2015 guidance, which can be found at: http://www.medicaid.gov/federal-policy-
guidance/downloads/SMD050715.pdf 
CFC Services (42 CFR 441.520)  
There are required services that must be included in all CFC programs, as well as additional services that 
may be included at the states option.  There is no requirement that every service that is included in the 
CFC benefit will be provided to every individual receiving the benefit.   States are required to complete 
an assessment of each individual, and to identify and provide those CFC services and supports that are 
determined to be necessary and appropriate.  All services and items must be linked to an assessed need 
and identified in the person-centered plan (described in more detail below).   
 
States electing CFC are required to cover the following services, subject to the conditions described 
above: (1) activities of daily living (ADLs),instrumental activities of daily living (IADLs) and health-
related tasks, through hands-on assistance, supervision, and/or cueing; (2) acquisition, maintenance, and 
enhancement of skills necessary for the individual to accomplish ADLs and IADLs and health-related 
tasks; (3) back-up systems or mechanism to ensure continuity of services and supports; and (4) voluntary 
training on how to select, manage, and dismiss attendants.   
 
The optional services states may cover in their CFC benefit include: (1) expenditures for transition costs 
(such as first months rent and utilities or bedding, basic kitchen supplies, etc.) necessary for an individual 
transitioning from an institutional setting to a home and community-based setting and (2) expenditures 
relating to a need that increases an individuals independence or substitutes for human assistance, to the 
extent that Medicaid expenditures would otherwise be made for human assistance.  For example, an 
attendant assisting an individual with transferring from sitting to standing would be considered an ADL, 
and therefore, considered a covered CFC activity.  In lieu of having an attendant on stand-by to assist 
with this activity, the individual may indicate through the person-centered service plan that he would like 
an electric seat lift so that he can get out of his chair independently.  Under this activity, the state could 
cover the cost of the seat lift, so an individual can get up and sit down independently, instead of needing 
to have an attendant to provide that type of assistance.          
 
States have a degree of flexibility to determine the scope of what to include in transitional costs and items 
that increase independence or substitute for human assistance.  It is not necessary for the state to list every 
service or support that would be covered for this purpose; however, in accordance with general Medicaid 
requirements found at 42 CFR 440.230(a), a state must describe any limitations on the amount, duration 
or scope of any of the required and optional services.  The attached CFC technical guide provides 
additional information regarding the scope of the benefit and the examples of the optional services that 
may be included. 
Service Models (42 CFR 441.540)  
There are three service delivery models available to states to include in their CFC benefit.  While each 
model will have varying levels of responsibilities afforded to the individual, all models must offer a 
consumer controlled method of selecting and obtaining services that allows the individual the maximum 
control possible.     
Services may be provided through (1) an agency-provider model, (2) a self- directed model with a service 
budget (utilizing a financial management entity and/or direct cash payments or vouchers), or (3) a state 
defined model that is approved by the Secretary.  The state determines service delivery model(s) to 
include in its CFC benefit.    Page 5  State Medicaid Director 
 
Person-Centered Planning Process and Service Plan (42 CFR 441.540)  
The person-centered planning process identifies a persons strengths, goals, preferences, service needs 
and desired outcomes.  It is a process that is driven by the individual4 receiving services and must allow 
for the participation of people freely chosen by the individual.  These people can be family members, 
friends, caregivers, and others the individual or his/her representative wishes to include.  The process 
must involve the individual receiving services and supports to the maximum extent possible, even if the 
individual has a legal representative.  
The person-centered service plan reflects the services and supports (paid and unpaid) that are important 
for the individual.  These services are to assist the individual to address the needs identified through an 
individual assessment of functional need and the goals identified by the individual.  The services must 
also reflect the individuals preferences for the delivery of CFC services and supports.  Like the person-
centered planning process, the development of the person-centered service plan must be driven by the 
individual receiving CFC services.  In order to accomplish this, a support system must be available as part 
of the CFC benefit and provided in accordance with the requirements described in 441.555.  In 
summary, the support system must provide individuals with counseling, information, training, skills and 
supports they need to make informed choices and decisions.  Counseling would include providing 
information on the range of service options and choices available, grievance and appeal rights, and 
information on freedom of choice of providers and service models.  Training would include training 
individuals on the rights and responsibilities of directing the provision of services, such as how to 
communicate effectively with attendants and how to supervise attendants.  The role of individuals 
providing support activities (e.g., options counselors, support brokers, social workers and others) in the 
person-centered planning process is to enable and assist individuals to identify and access a unique mix of 
paid and unpaid services to meet their needs, and provide support during the planning process.  
In addition to the services and supports available through the CFC benefit, natural supports provided by 
unpaid caregivers play a critical role in assisting individuals with remaining in the community.  As noted 
in the response to the comment in the preamble of the CFC final regulation (CMS-2337-F), the 
identification of natural supports in the assessment is an important aspect in determining an individuals 
needs.  42 CFR 441.540(b)(6) states that Natural supports cannot supplant needed paid services unless 
the natural supports are unpaid supports that are provided voluntarily to the individual in lieu of the 
attendant.   CMS is clarifying that this language is to set forth the requirement that informal caregivers, 
family members and friends cannot be required to provide unpaid supports as a condition of an individual 
receiving CFC services, nor can the beneficiary be required to accept such services.  Informal caregivers, 
family members and friends should only provide unpaid supports if they and the individual determine it is 
their preferred option based on the assessment, the person-centered planning process, the approved levels 
of paid support in the plan and in accordance with the service delivery model(s) selected by the state.  
This requirement does not require that caregivers that were previously unpaid should become paid 
caregivers under the CFC benefit, nor does this require that caregivers need to be paid beyond the paid 
hours authorized in the plan.   
Lastly, to prevent conflicts that may arise when an individuals representative could also provide paid 
services, CFC regulations prohibit an individuals representative, as defined in 42 CFR 441.505, from 
also being paid to provide CFC services to the individual.  In circumstances where it has been determined 
that the representative is the most appropriate person to provide services, an alternative person must be 
identified to act as the individuals representative for the purposes of participating in the person-centered 
planning process and provision of CFC services and supports.     
                                                 
4 In accordance with 441.505 individual means the eligible individual and, if applicable, the individuals representative.    Page 6  State Medicaid Director 
 
Home and Community-Based Settings (42 CFR 441.530) 
Section 1915(k)(1)(A)(ii) of the Act states that CFC services and supports must be provided in a home or  
community setting, which does not include a nursing facility, institution for mental diseases, or an 
intermediate care facility for individuals with intellectual disabilities.  Implementing regulations found at 
42 CFR 441.530 define and set forth requirements for CFC settings.   
The home and community-based settings requirements are designed to establish a more experiential 
definition of home and community-based settings, rather than one based solely on a settings location, 
geography, or physical characteristics.  The requirements apply to residential settings where individuals 
reside (irrespective of receiving CFC services in that setting) and non-residential home and community-
based settings where CFC services are provided. 
 
Prior to submitting a CFC state plan amendment, under 42 CFR 441.575 (b), states are required to consult 
and collaborate with a Development and Implementation Council, throughout the development and 
implementation of the CFC benefit.  The requirements related to the Development and Implementation 
Council are described in a separate section of this letter, below.  The state should also review its 
assessment of compliance with home and community-based settings requirements with the Council prior 
to SPA submission.  This includes the Councils prior review of any intended settings the state intends to 
submit to CMS for heightened scrutiny review. Additional information on the heightened scrutiny review 
process is available on www.medicaid.gov/hcbs.  CMS also strongly encourages states to seek public 
input on their processes for assessment of settings.  These additional efforts will be of great assistance 
during the SPA review process in which CMS determines if the settings meet the regulatory requirements.   
 
The first step in CMSs review of a CFC SPA will be the determination that all CFC settings comply with 
the regulation.  Medicaid requirements found at 42 CFR 430.20 specify that a SPA may be approved with 
an effective date that is retroactive to the first day of the quarter in which an approvable plan is submitted 
to CMS.  However, because a SPA cannot be approved if it would result in the provision of services in 
non-compliant settings, it may be necessary to amend an effective date of a CFC SPA to coincide with the 
date settings were determined compliant.  Under such circumstances, CMS will work with states to 
determine the adjusted effective date.   
As part of the CFC SPA review process, states must submit adequate information to CMS showing that 
the settings where individuals receiving CFC services reside or receive CFC services, meet the 
requirements found at 42 CFR 441.530.  To assist states with providing adequate information, states 
should answer the Standard Review Questions related to Home and Community-Based Settings Criteria 
for 1915(k) Community First Choice (CFC) SPA submissions.  Additionally, CMS has issued guidance to 
assist states in assessing settings and determining compliance with the regulation5.  The questions and 
additional information about the home and community-based settings requirements are included in the 
attached CFC Technical Guide.  
   
Since the home and community-based settings regulation contains new requirements for settings, CMS 
expects that states will need to revisit and possibly revise their state regulations or issue sub-regulatory 
guidance to ensure compliance.  Training provided by the states on these new requirements is vital for 
beneficiaries, their families, case managers, providers, and other stakeholders.  States should ensure they 
have developed strong oversight and quality mechanisms to ensure continued compliance, as well as 
grievance and appeal systems to address any concerns or potential violations. 
 
 
                                                 
5 www.medicaid.gov/hcbs  Page 7  State Medicaid Director 
 
The Quality Assurance System (42 CFR 441.585) 
The CFC SPA must include a description of a quality assurance system.  The system must include a 
quality improvement strategy that addresses both individual and systemic issues.  Among other 
requirements, the system must also continuously monitor the health and welfare of each CFC recipient, 
include a process for mandatory reporting, investigation, and resolution of allegations of neglect, abuse or 
exploitation in connection with CFC services and supports, and a method of  measuring individual 
outcomes associated with an individuals receipt of CFC services.  The quality assurance system must 
include standards for all service delivery models, including how and when an individual can appeal 
service denials (e.g. type of services requested or the number of assessed service hours), as well as 
reconsideration procedures for an individuals person-centered service plan.  Reconsideration procedures 
are less formal than the appeals process.  They provide the opportunity for the individual receiving CFC 
services, the individuals representative (if applicable),  the person responsible for facilitating the person-
centered process and other individuals chosen by the individual to explore an informal resolution to the 
individuals concerns.  With regards to appeals, the fair hearing requirements set forth in part 431, 
Subpart E, apply to CFC in the same manner as they apply to other Medicaid State plan services.  A 
reconsideration process does not replace the fair hearing process, nor should it delay an individuals right 
to a fair hearing.   
As discussed in our January 16, 2014 regulation, the quality improvement system must also include 
performance and outcome measures for the home and community setting requirements,  In its SPA, the 
state should include a description of the states process and content for ongoing monitoring of the 
compliance for home and community-based settings requirements described in 42 CFR 441.530. 
The states quality assurance system must also include a way to elicit and incorporate feedback from 
individuals and their representatives, disability organizations, providers, families of people with 
disabilities or elderly individuals, members of the community and others to improve the quality of the 
community-based attendant services and supports benefit.  
 
States may consider utilizing existing components of current quality assurance systems used to evaluate 
other programs to meet this requirement, as long as all of the specific requirements of 42 CFR 441.585 
are addressed.     
Maintenance of Existing Expenditures (42 CFR 441.570(b)) and Data Collection (42 CFR 441.580) 
For the first full twelve month period in which the state plan amendment is implemented, the state must 
maintain or exceed the level of state expenditures for home and community-based attendant services and 
supports provided under sections 1115, 1905(a), 1915, or otherwise under the Act, to individuals with 
disabilities or elderly individuals attributable to the preceding twelve month period.   
Additionally, 42 CFR 441.580 specifies the annual data collection requirements for CFC benefits.  
Guidance on how to meet the maintenance of existing expenditures and the data collection requirements 
are provided in the attached CFC technical guide. 
Concurrent Use of Other Medicaid Authorities with the Section 1915(k) Benefit 
1)  Managed Care Authorities 
Several states have been approved to include CFC as part of a service package available in a managed 
care arrangement.  For a state to receive enhanced FMAP for CFC services, a state plan amendment is 
still required even when services are provided through a managed care arrangement.  States providing 
CFC services in a managed care arrangement are required to comply with all of 42 CFR 438.  
Specifically, when a state is including a CFC payment in a health plan capitation rate must include a  Page 8  State Medicaid Director 
 
separate CFC section in their capitated rate Actuarial Certification that is submitted to the Regional 
Office.  The state must use only CFC services in calculating that  portion of the entire capitation payment 
attributable to CFC in the separate section of the actuarial certification in order to be able to claim 
expenditures for that portion at the enhanced FMAP under this provision.  The required information is 
outlined in the CFC technical guide.  CMS will provide technical assistance to any state interested in 
adding CFC services to a managed care arrangement.   
2)  Section 1915(b)(4) Authority 
A state may use the section 1915(b)(4) authority to request a waiver of section 1902(a)(23) of the Act, the 
free choice of providers requirement, to selectively contract with entities that furnish CFC services 
eligible for the enhanced FMAP.   
In order to operate sections 1915(b)/1915(k) concurrently, a state must complete and submit a separate 
section 1915(b) waiver application and section 1915(k) state plan amendment. Both applications are 
subject to a 90-day review period (clock).  CMS internally coordinates the review of both applications.  
Because a 1915(b) waiver must be approved on a prospective basis, we encourage a state to submit a 
request to operate sections 1915(b)/1915(k) concurrently at least six months in advance of the proposed 
CFC effective date to facilitate a smooth implementation. 
3) Section 1115 Medicaid Demonstration Authority 
States may make CFC services available to individuals enrolled in an 1115 Medicaid demonstration.  As 
required by section 1915(k)(1) of the Act, to receive the enhanced FMAP associated with the provision of 
CFC services, the state must have an approved CFC state plan amendment and the individuals must meet 
all of the CFC program requirements described in 42 CFR 441.510, including meeting eligibility 
requirements under the state plan.  CMS has provided states authority through Section 1115 
demonstrations to extend Medicaid eligibility to individuals not otherwise eligible under the state plan.  In 
these cases, states provide a CFC like benefit package to those individuals; however, states may only 
claim the normal FMAP rate for the provision of those services.   
State flexibility in developing approaches to benefits and service delivery 
States have flexibility to design a CFC program.  For example, states could design a program that is 
limited to only mandatory services and one service delivery model (i.e., self-directed model with service 
budget) as an approach to establishing the program in the state.  Over time, the state could add multiple 
optional services and service delivery models to expand the choices available to beneficiaries.  
Alternatively, the state could design a program that provides maximum choice at the outset.   
Comprehensiveness of Reimbursement Methodologies and Submission of 4.19 B pages 
Regulations at 42 CFR 430.10 require the state plan to contain a comprehensive description of the states 
Medicaid program, including the methods for reimbursing covered services.  Therefore, states must 
submit corresponding 4.19 B pages to describe reimbursement methodologies for CFC services when 
submitting a state plan amendment to implement the CFC state plan option.   
Incorporating the CFC benefit into a states current long-term services and supports system   
As states contemplate adding CFC services to their LTSS system, it is important to consider the impact on 
existing components of their state LTSS design. While there is not a requirement that states modify 
existing authorities to implement CFC, states are required to design their systems in a manner that 
prevents duplicate payment for the same services and clearly articulates the services and delivery of the 
program.  Page 9  State Medicaid Director 
 
CMS is committed to providing technical assistance in this and other aspects of CFC, and strongly urges 
states to discuss their plans with CMS as early as possible.  This will allow the state to obtain technical 
assistance in determining the types of services that can be delivered within CFC, assessing time frames 
for desired design decisions and implementation, evaluating options for achieving the outcomes desired 
by the state in expanding their LTSS design, and ensuring a smooth and seamless transition for recipients 
of services.   
Because some states have chosen to move or modify services from existing 1915(c) HCBS waivers as 
they add the CFC benefit to their Medicaid state plan, it is critical that states work early and closely with 
the combined CMS state plan and waiver teams to ensure that the state understands its options and 
designs a system that is compliant with both state plan and waiver requirements. 
 
Consultation Requirements 
 
Prior to submitting a SPA pre-print to CMS, states must consult and collaborate with a state established 
Development and Implementation Council when developing and implementing a SPA to provide CFC 
services and supports.  The regulations at 42 CFR 441.575 specifically require the majority of the 
Development and Implementation Council members be individuals with disabilities, elderly individuals, 
and their representatives.  States may use existing Medicaid advisory committees to serve the purpose of 
the Development and Implementation Council, as long as the membership and purpose of the committee 
meet the CFC regulatory requirements.  
 
States with federally recognized Indian Tribes and Indian health care providers must consult with Tribes 
and solicit advice from Indian health care providers, consistent with their Tribal Consultation SPAs, the 
transparency regulations at 42 CFR section 431.400 if the state is choosing to implement the program 
through an 1115 Medicaid demonstration, and Section 8 of the CMS Tribal Consultation Policy.6  We 
encourage states to work collaboratively with Tribes and Indian health providers in their state to assure 
inclusion of providers that have the expertise to address the unique cultural needs of American Indians/ 
Alaska Natives (AI/ANs) and provide culturally competent care in LTSS settings. 
SPA Submission Requirements 
States must use the attached SPA pre-print to describe the CFC benefit.  States must also submit a 
reimbursement page (attachment 4.19-B) identifying the payment rates for the CFC activities eligible for 
claiming at the Federal Medical Assistance Percentage (FMAP).  In submitting the plan amendments, 
States must comply with the public notice requirements of 42 CFR 447.205.   Additionally, the CFC 
benefit may be part of a service package available in a managed care arrangement.  For a state to receive 
enhanced FMAP for CFC services, a state plan amendment is still required even when services are 
provided through a managed care arrangement.    
SPAs may be approved with effective dates retroactive to the first day of the quarter in which they are 
submitted as long as all regulatory requirements are met.  SPAs are subject to the traditional State plan 
review process. Please submit your SPA electronically to your regional office in order to implement these 
provisions.   
We look forward to working with states to implement this Medicaid state plan option.  CMS is available 
to provide technical assistance to states as they consider making CFC a part of a states strategy for 
                                                 
6 https://www.cms.gov/Outreach-and-Education/American-Indian-Alaska-Native/AIAN/Downloads/CMSTribalConsultationPolicy2015.pdf  Page 10  State Medicaid Director 
 
advancing access to home and community-based services, and hopes that the attached tools are helpful to 
that end. 
If you have any questions, please contact Kirsten Jensen, Director, Division of Benefits and Coverage, 
Disabled and Elderly Health Programs Group, at 410-786-8146. 
Sincerely, 
 
      /s/ 
 
Vikki Wachino 
Director 
 
 
cc:  
National Association of Medicaid Directors    
National Academy for State Health Policy  
National Governors Association  
American Public Human Services Association  
Association of State Territorial Health Officials  
Council of State Governments  
National Conference of State Legislatures  
Academy Health