DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
 
CMCS Informational Bulletin  
 
DATE:   January 08, 2016  
 
FROM:   Vikki Wachino  
Acting Director  
Center for Medicaid and CHIP Services 
 
Subject: Options for Medicaid Payments in the Implementation of the Fair Labor Standards Act 
Regulation Changes  
 
The Centers for Medicare & Medicaid Services (CMS) is re-releasing this Informational 
Bulletin, originally published on July 3, 2014, to assist states in understanding how they may 
ament their current 1915(c) waivers and state plan (1905(a), 1915(i), 1915(j), and 1915(k)) 
personal care services to implement Fair Labor Standards Act (FLSA) changes in a timely way, 
and in understanding Medicaid reimbursement options that will enable them to account for the 
cost of overtime and travel time during the workday that are likely compensable as the result of 
the DOL home care final rule.   
 
Background 
 
Since the publication of the Department of Labors (DOL) Home Care Final Rule on October 1, 
2013, the Centers for Medicare & Medicaid Services (CMS), DOL, and other federal partners 
have worked collaboratively to help ensure states have the information they need to prepare for 
compliance with this final rule, which is in effect and places obligations on employers of most 
home care workers under the Fair Labor Standards Act (FLSA).  While the Informational 
Bulletin concentrates on home care programs using self-directed service options, be advised that 
FLSA implications also exist for services furnished through agency-delivered models.  
 
Amending 1915(c) waivers and 1905(a) Personal Care, 1915(i), 1915(j) and 1915(k) State 
Plan Amendments 
 
CMS continues its commitment to offer technical assistance to states seeking to make 
adjustments to current or future HCBS or other home care programs to accommodate FLSA 
related costs in Medicaid reimbursement design. All state plan amendments may be approved 
retroactive to the first day of the quarter in which the amendment is submitted.  Therefore, any 
amendment to adjust a rate methodology to accommodate the FLSA rules that is submitted on or 
before March 31, 2016 for a state plan service can be approved with an effective date of January 
1, 2016.  The 1915(c) waiver rate methodologies cannot be approved retroactively.  However, 
when the methodology must be changed due to the FLSA, CMS commits to approve within a 
month an amendment submitted that is limited to the following language:  
Waiver (fill in the service title) rates will be adjusted to comply with the FLSA regulations.  The 
specific rate methodology will be submitted to CMS in an amendment or renewal no later than 
180 days after this amendment approval date.  CMCS Informational Bulletin  Page 2 
It should be noted that if any other amendments to the waiver are requested, the review will 
require, at a minimum, the full 90 day review period.   
 
In conclusion, CMS reminds states that they should consult DOLs guidance and seek legal 
counsel in determining where and how FLSA impacts direct care programs operating under 
Medicaid.  CMS is available to offer technical assistance to states seeking to adjust Medicaid 
reimbursement and other program policies to appropriately support FLSA compliance in home 
and community based LTSS.  Additionally, DOL is continuing to provide extensive, 
individualized technical assistance.  To ensure the most efficient response, state officials seeking 
further assistance from DOL may contact Laura Tatum at Tatum.Laura@dol.gov.  All others 
may contact homecare@dol.gov.  Further information regarding DOLs final rule is available at: 
http://www.dol.gov/whd/homecare/.