10736 Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 441 

[CMS–2337–P] 

RIN 0938–AQ35 

Medicaid Program; Community First 

Choice Option 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule 

implements Section 2401 of the 

Affordable Care Act (ACA) which 

establishes a new State option to 

provide home and community-based 

attendant services and supports. These 

services and supports may be offered 

through the Community First Choice 

State plan option. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on April 26, 2011. 

ADDRESSES: In commenting, please refer 

to file code CMS–2337–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address only: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–2337–P, P.O. Box 8016, Baltimore, 

MD 21244–8016. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address only: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–2337–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments before the close 

of the comment period to either of the 

following addresses: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue, SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786– 

7195 in advance to schedule your 

arrival with one of our staff members. 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by following 

the instructions at the end of the 

‘‘Collection of Information 

Requirements’’ section in this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Carrie Smith, (410) 786–4485. 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

policies. You can assist us by 

referencing the file code CMS–2337–P 

and the specific ‘‘issue identifier’’ that 

precedes the section on which you 

choose to comment. 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http:// 

www.regulations.gov. Follow the search 

instructions on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 

8:30 a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

A. Section 2401 of the Affordable Care 

Act 

The Patient Protection and Affordable 

Care Act of 2010 (Pub. L. 111–148, 

enacted on March 23, 2010), as 

amended by the Health Care and 

Education Reconciliation Act of 2010 

(Pub. L. 111–152, enacted March 30, 

2010) (collectively referred to as the 

Affordable Care Act) established a new 

State plan option to provide home and 

community-based attendant services 

and supports. Section 2401 of the 

Affordable Care Act, entitled 

‘‘Community First Choice Option,’’ adds 

a new section 1915(k) of the Social 

Security Act (the Act) that allows States, 

at their option, to provide home and 

community-based attendant services 

and supports under their State plan. 

This option, available October 1, 2011, 

allows States to receive a 6 percentage 

point increase in Federal matching 

payments for expenditures related to 

this option. 

Under section 1915(k)(1) of the Act, 

States can provide home and 

community-based attendant services 

and supports for individuals who are 

eligible for medical assistance under the 

State plan whose income does not 

exceed 150 percent of the Federal 

Poverty Level or, if greater, the income 

level applicable for an individual who 

has been determined to require an 

institutional level of care to be eligible 

for nursing facility services under the 

State plan and with respect to whom 

there has been a determination that, but 

for the provision of such services, the 

individuals would require the level of 

care provided in a hospital, a nursing 

facility, an intermediate care facility for 

the mentally retarded, or an institution 

for mental diseases, the cost of which 

could be reimbursed under the State 

plan. The individual must choose to 

receive such home and communitybased attendant services and supports, 

and the State must meet certain 

requirements set forth in section 

1915(k)(1) of the Act. Section 

1915(k)(1)(A) of the Act requires States 

electing this option to make available 

home and community-based attendant 

services and supports to eligible 

individuals, under a person-centered 


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service plan agreed to in writing by the 

individual, or his or her representative, 

that is based on a functional need 

assessment. This assessment will 

determine if the individual requires 

assistance with activities of daily living 

(ADLs), instrumental activities of daily 

living (IADLs), or health-related tasks. 

The services and supports must be 

provided by a qualified provider in a 

home or community setting under an 

agency-provider model, or through other 

methods for the provision of consumer 

controlled services and supports as 

referenced in section 1915(k)(6)(C) of 

the Act. Section 1915(k)(1)(B) of the Act 

requires that States make available 

additional services and supports 

including the acquisition, maintenance, 

and enhancement of skills necessary for 

the individual to accomplish ADLs, 

IADLs, and health-related tasks, back-up 

systems or mechanisms to ensure 

continuity of services and supports and 

voluntary training on how to select, 

manage, and dismiss attendants. 

Section 1915(k)(1)(C) of the Act 

prohibits States from providing services 

and supports excluded from section 

1915(k) of the Act, including room and 

board costs for the individual, special 

education and related services provided 

under the Individuals with Disabilities 

Education Act (Pub. L. 101–476, enacted 

on October 30, 1990) (IDEA) and 

vocational rehabilitation services 

provided under the Rehabilitation Act 

of 1973 (Pub. L. 93–112, enacted on 

September 26, 1973), assistive 

technology devices and services other 

than back-up systems or mechanisms to 

ensure continuity of services and 

supports, medical supplies and 

equipment, or home modifications. 

However, some, although not all, of 

these services can be covered by 

Medicaid under other authorities. 

Section 1915(k)(1)(D) of the Act sets 

forth services and supports permissible 

under section 1915(k) of the Act that 

States can provide, including 

expenditures for transition costs such as 

rent and utility deposits, first month’s 

rent and utilities, bedding, basic kitchen 

supplies, and other necessities required 

for an individual to make the transition 

from a nursing facility, institution for 

mental diseases, or intermediate care 

facility for the mentally retarded to a 

community-based home setting where 

the individual resides. States can also 

provide for expenditures relating to a 

need identified in an individual’s 

person-centered plan of services that 

increase independence or substitute for 

human assistance, to the extent that 

expenditures would otherwise be made 

for the human assistance. 

Section 1915(k)(2) of the Act provides 

that States offering this option to 

eligible individuals during a fiscal year 

quarter occurring on or after October 1, 

2011 will be eligible for a 6 percentage 

point increase in the Federal medical 

assistance percentage (FMAP) 

applicable to the State for amounts 

expended to provide services under 

section 1915(k) of the Act (hereinafter 

referred to as ‘‘section 1915(k) services’’). 

Section 1915(k)(3)of the Act sets forth 

the requirements for a State plan 

amendment. States must develop and 

have in place a process to implement an 

amendment in collaboration with a 

Development and Implementation 

Council established by the State that 

includes a majority of members with 

disabilities, elderly individuals, and 

their representatives. States must also 

provide consumer controlled home and 

community-based attendant services 

and supports to individuals on a 

statewide basis, in a manner that 

provides such services and supports in 

the most integrated setting appropriate 

to the individual’s needs, without 

regard to the individual’s age, type or 

nature of disability, severity of 

disability, or the form of home and 

community-based attendant services 

and supports the individual requires in 

order to lead an independent life. 

In addition, for expenditures during 

the first full fiscal year of 

implementation, States must maintain 

or exceed the level of State expenditures 

attributable to the preceding fiscal year 

for medical assistance provided under 

sections 1905(a), 1915, or 1115 of the 

Act, or otherwise provided to 

individuals with disabilities or elderly 

individuals. States must also establish 

and maintain a quality assurance system 

with respect to community-based 

attendant services and supports that 

includes standards for agency-based and 

other delivery models for training, 

appeals for denials and reconsideration 

procedures of an individual plan, and 

other factors as determined by the 

Secretary. The quality assurance system 

must incorporate feedback from 

individuals and their representatives, 

disability organizations, providers, 

families of disabled or elderly 

individuals, and members of the 

community, and maximize consumer 

independence and control. The quality 

assurance system must also monitor the 

health and well-being of each individual 

who receives section 1915(k) services 

and supports, including a process for 

the mandatory reporting, investigation, 

and resolution of allegations of neglect, 

abuse, or exploitation in connection 

with the provision of such services and 

supports. The State must also provide 

information about the provisions of the 

quality assurance required to each 

individual receiving such services. 

States must collect and report 

information for the purposes of 

approving the State plan amendment, 

providing Federal oversight, and 

conducting an evaluation, including 

data regarding how the State provides 

home and community-based attendant 

services and supports and other home 

and community-based services, the cost 

of such services and supports, and how 

the State provides individuals with 

disabilities who otherwise qualify for 

institutional care under the State plan or 

under a waiver the choice to receive 

home and community-based services in 

lieu of institutional care. 

Section 1915(k)(4) of the Act requires 

that States ensure, regardless of the 

models used to provide attendant 

services and supports, such services and 

supports are to be provided in 

accordance with the requirements of the 

Fair Labor Standards Act of 1938 and 

applicable Federal and State laws 

regarding the withholding and payment 

of Federal and State income and payroll 

taxes; the provision of unemployment 

and workers compensation insurance; 

maintenance of general liability 

insurance; and occupational health and 

safety. 

Section 1915(k)(5) of the Act sets forth 

the requirements that States provide 

data to the Secretary for an evaluation 

and Report to Congress on the provision 

of home and community-based 

attendant services and supports. States 

must provide information for each fiscal 

year for which attendant services and 

supports are provided, on the number of 

individuals estimated to receive section 

1915(k) services and supports during 

the fiscal year; the number of 

individuals that received such services 

and supports during the preceding fiscal 

year; the specific number of individuals 

served by type of disability, age, gender, 

education level, and employment status; 

and whether the specific individuals 

have been previously served under any 

other home and community-based 

services program under the State plan or 

under a waiver. 

B. Background of Home and 

Community-Based Attendant Services 

and Supports 

The Community First Choice Option 

continues to move Medicaid toward 

expanding options to States and 

individuals for the provision of 

community-based long-term care 

services. Consistent with the decision of 

the United States Supreme Court in 

Olmstead v. L.C., 527 U.S. 581 (1999), 

this option will support States in their 


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mission to develop or enhance a 

comprehensive system of long-term care 

services and supports in the community 

that provide beneficiary choice and 

direction in the most integrated setting. 

Since the mid-1970s, States have had 

the option to offer personal care services 

under their Medicaid State plans. The 

option was originally provided at the 

Secretary’s discretion, had a medical 

orientation and could only be provided 

in an individual’s place of residence. 

Personal care services were mainly 

offered to assist individuals in activities 

of daily living, and, if incidental to the 

delivery of such services, could include 

other forms of assistance (for example, 

housekeeping or chores). In the 1980s, 

some States sought to broaden the scope 

of personal care services to include 

community settings for the provision of 

services to enable individuals to 

participate in normal life activities. 

Through the Omnibus Budget 

Reconciliation Act of 1993 (Pub. L. 103– 

66, enacted on August 10, 1993) (OBRA 

93), the Congress formally included 

personal care as a separate and specific 

optional service under the Federal 

Medicaid statute and gave States 

explicit authorization, under a new 

section 1905(a)(24) of the Act, to 

provide such services outside the 

individual’s residence. This was 

implemented by final rule published in 

the September 11, 1997 Federal Register 

(62 FR 47896) that added a new section 

at § 440.167 describing the option for 

States to provide a wide range of 

personal assistance both in an 

individual’s residence and in the 

community. In 1999, we released 

additional guidance to clarify that 

personal care services may include 

ADLs and IADLs that all qualified 

relatives, with the exception of ‘‘legally 

responsible relatives’’, could be paid to 

provide personal care services and that 

States were permitted to offer the option 

of consumer-directed personal care 

services. 

Additionally, the Omnibus 

Reconciliation Act of 1989 (Pub. L. 101– 

239, enacted on December 19, 1989) 

(OBRA 89), revised the Early Periodic 

Screening and Diagnosis and Treatment 

Benefit to include the requirement that 

all section 1905(a) services are 

mandatory for individuals under the age 

of 21 if determined to be medically 

necessary in accordance with section 

1905(r) of the Act. 

Furthermore, before 1981, the 

Medicaid program provided limited 

coverage for long-term care services in 

non-institutional, community-based 

settings. Medicaid’s eligibility criteria 

and other factors made institutional care 

much more accessible than care in the 

community. 

Medicaid home and community-based 

services (HCBS) were established in 

1981 as an alternative to care provided 

in Medicaid institutions, by permitting 

States to waive certain Medicaid 

requirements upon approval by the 

Secretary. Section 1915(c) of the Act 

was added to title XIX by the Omnibus 

Budget Reconciliation Act of 1981 (Pub. 

L. 97–35, enacted on August 13, 1981) 

(OBRA 81). Programs of HCBS under 

section 1915(c) of the Act are known as 

‘‘waiver programs’’, or simply ‘‘waivers’’ 

due to the authority to waive certain 

Medicaid requirements. 

Since 1981, the section 1915(c) HCBS 

waiver program has afforded States 

considerable latitude in designing 

services to meet the needs of people 

who would otherwise require 

institutional care. In 2010, 

approximately 315 approved HCBS 

waivers under section 1915(c) of the Act 

serve nearly 1 million elderly and 

disabled individuals in their homes or 

alternative residential community 

settings. States have used HCBS waiver 

programs to provide numerous services 

designed to foster independence; assist 

eligible individuals in integrating into 

their communities; and promote selfdirection, personal choice, and control 

over services and providers. The 

addition of section 1915(i) of the Act in 

2005 affords some of the same flexibility 

and service coverage through the State 

plan without a waiver. 

The section 1915(k) benefit does not 

diminish the State’s ability to provide 

any of the existing Medicaid home and 

community-based services. States opting 

to offer the Community First Choice 

Option under section 1915(k) of the Act 

can continue to provide the full array of 

home and community-based services 

under section 1915(c) waivers, section 

1115 demonstration programs, 

mandatory State plan home health 

benefits, and the State plan personal 

care services benefit. Community First 

Choice provides States the option to 

offer a broad service package that 

includes assistance with ADLs, IADLs, 

and health-related tasks, while also 

incorporating transition costs and 

supports that increase independence or 

substitute for human assistance. 

Another important aspect to this 

background is the passage of the 

Americans with Disabilities Act of 1990 

(Pub. L. 101–336, enacted July 26, 1990) 

(ADA), and the Olmstead v. L.C., U.S. 

Supreme Court decision. In particular, 

Title II of the ADA prohibits 

discrimination on the basis of disability 

by State and local governments and 

requires these entities to administer 

their services and programs, in the most 

integrated setting appropriate to the 

needs of qualified individuals with 

disabilities. In applying the most 

integrated setting mandate, the U.S. 

Supreme Court ruled in Olmstead that 

unnecessary institutionalization of 

individuals with disabilities constitute 

discrimination under the ADA. Under 

Olmstead, States may not deny a 

qualified individual with a disability a 

community placement when: (1) 

Community placement is appropriate; 

(2) the community placement is not 

opposed by the individual with a 

disability; and (3) the community 

placement can be reasonably 

accommodated. 

As self-direction is a key component 

to Community First Choice, this service 

delivery model is another important 

aspect to the background of this 

provision. Two national pilot projects 

demonstrated the success of selfdirected care. During the 1990’s, the 

Robert Wood Johnson Foundation 

funded these projects which evolved 

into Medicaid funded programs under 

section 1915(c) of the Act and the ‘‘Cash 

and Counseling’’ national section 1115 

demonstration programs. Evaluations 

were conducted in both of these 

national projects. Results in both 

projects were similar—persons directing 

their personal care experienced fewer 

unnecessary institutional placements, 

experienced higher levels of 

satisfaction, had fewer unmet needs, 

experienced higher continuity of care 

because of less worker turnover, and 

maximized the efficient use of 

community services and supports. The 

Deficit Reduction Act of 2005 (Pub. L. 

109–171, enacted on February 8, 2006) 

(DRA), established section 1915(j) of the 

Act which provided a State plan option 

for States to utilize this self-direction 

service delivery model without needing 

the authority of a Section 1115 

demonstration. 

II. Provisions of the Proposed 

Regulations 

In the following discussion, we refer 

to particular home and communitybased attendant services and supports 

offered under section 1915(k) of the Act 

as Community First Choice services and 

supports. We refer to the ‘‘Community 

First Choice Option’’ when describing 

the collective requirements of section 

1915(k) of the Act for the State plan 

option. 

A. Eligibility (§ 441.510) 

Section 1915(k)(1) of the Act requires 

that in order to receive services under 

the Community First Choice Option, 

individuals must be eligible for 


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Medicaid under an eligibility group 

covered by the State plan. This section 

does not create a new eligibility group. 

Individuals who are not eligible for 

Medicaid under a group covered under 

the State Medicaid plan are not eligible 

for the State plan Community First 

Choice Option, even if they otherwise 

meet the requirements for the option. 

Individuals eligible under the State 

Medicaid plan whose income does not 

exceed 150 percent of the Federal 

Poverty Level (FPL) are eligible for the 

Community First Choice Option without 

requiring a determination of 

institutional level of care. In 

determining whether the 150 percent of 

the FPL requirement is met, the regular 

rules for determining income eligibility 

for the individual’s eligibility group 

under the State plan apply, including 

any income disregards used by the State 

for that group under section 1902(r)(2) 

of the Act. 

Individuals eligible under the State 

Medicaid plan whose income is greater 

than 150 percent of the FPL are eligible 

for the Community First Choice Option 

if it has been determined such 

individuals need the level of care 

required under the State Medicaid plan 

for coverage of nursing facility services. 

The State must determine that but for 

the provision of the home and 

community-based attendant services 

and supports, the individual would 

require the level of care provided in a 

hospital, a nursing facility, intermediate 

care facility for the mentally retarded or 

an institution for mental diseases, the 

cost of which would be reimbursed 

under the State plan. For example, 

section 1902(a)(10)(A)(ii)(XIII) of the Act 

defines an optional eligibility group 

known as working disabled. The income 

standard for this group is 250 percent of 

the FPL. An individual in this eligibility 

group with income that does not exceed 

150 percent of the FPL would be eligible 

for CFC services without a level of care 

determination. An individual in the 

same eligibility group with income that 

exceeds 150 percent of the FPL would 

need to have a level of care 

determination to be eligible for CFC 

services. Additionally, individuals who 

are eligible for Medicaid under the 

special home and community-based 

waiver eligibility group defined at 

section 1902(a)(10)(A)(ii)(VI) of the Act, 

for example, the special income level 

group for institutionalized individuals, 

could be eligible to receive CFC 

services. These individuals would have 

to receive at least 1 section 1915(c) 

home and community-based waiver 

service per month. We propose to 

implement this eligibility requirement 

at § 441.510. 

As the need for a level of care 

determination is directly related to an 

individual’s income level in section 

1915(k)(1) of the Act, we propose to 

require an annual verification of income 

for all individuals receiving services 

under the section 1915(k) State plan 

option. We propose to implement this 

requirement at § 441.510. 

B. Statewideness (§ 441.515) 

Section 1915(k)(3)(B) of the Act 

requires that a State that chooses to 

provide the Community First Choice 

Option do so for individuals on a 

statewide basis, in a manner that 

provides such services and supports in 

the most integrated setting appropriate 

to the individual’s needs, and without 

regard to the individual’s age, type or 

nature of disability, severity of 

disability, or the form of home and 

community-based attendant services 

and supports that the individual 

requires in order to lead an independent 

life. We propose at § 441.515 to adopt 

this statutory language as our definition. 

C. Required Services (§ 441.520) 

Section 1915(k)(1)(B) of the Act 

provides detailed requirements for the 

services and supports included in the 

Community First Choice Option. 

Therefore at § 441.520, we propose the 

following services must be available 

under the Community First Choice 

option: 

• Assistance with ADLs, IADLs, and 

health related tasks through hands-on 

assistance, supervision or cueing. 

• The acquisition, maintenance and 

enhancement of skills necessary for the 

individual to accomplish ADLs, IADLs, 

and health-related tasks. 

• Back-up systems or mechanisms to 

ensure continuity of services and 

supports. 

• Voluntary training on how to select, 

manage, and dismiss attendants. 

With regard to back up systems or 

mechanisms to ensure continuity of 

services and supports, we propose at 

§ 441.505 that such devices may include 

personal emergency response systems, 

pagers, or any other appropriate mobile 

electronic device that may be used to 

ensure continuity of services and 

supports. 

The Community First Choice Option 

requires the utilization of a personcentered planning process. A key 

component of the Community First 

Choice option is to allow individuals to 

self direct the provision of services and 

supports. Individuals must have the 

authority to hire, fire, and train 

attendants to provide services tailored 

to the individuals’ needs. Therefore, we 

propose at § 441.520(a)(6) to require 

States to develop and provide a training 

program for individuals (or 

representative) on how to select, manage 

and dismiss attendants. Consistent with 

the philosophy of self-direction, this 

training must be voluntary, and may not 

be a mandatory requirement for the 

individual to receive services under this 

option. 

Section 1915(k)(1)(D) of the Act 

provides that States may allow an 

individual to purchase permissible 

services and supports. We propose to 

implement this option at § 441.520(b). 

At a minimum, permissible services and 

supports include expenditures for 

transition costs such as rent and utility 

deposits, first month’s rent and utilities, 

bedding, basic kitchen supplies, and 

other necessities required for an 

individual to transition from a nursing 

facility, institution for mental disease, 

or intermediate care facility for the 

mentally retarded to a community-based 

home setting where the individual 

resides. We believe that the primary 

focus of Community First Choice is to 

remove barriers that prevent individuals 

from returning to the community or 

remaining in the community, thus 

avoiding unnecessary or premature 

institutionalization. Section 

1915(k)(1)(D)(ii) of the Act permits 

States to make expenditures available 

for individuals to acquire items that 

increase independence or substitute for 

human assistance, to the extent that the 

expenditures would otherwise be made 

for the human assistance and are related 

to a need identified in an individual’s 

person-centered plan. Based on our 

experience with the Cash and 

Counseling Demonstrations, and 

authorities under sections 1915(j) and 

1915(c) of the Act, we know that many 

individuals do avail themselves of and 

benefit from this option and use this 

flexibility to purchase items that allow 

them greater independence, such as 

non-medical transportation services, or 

that substitute for human assistance, 

such as a microwave oven. We propose 

at § 441.520(b)(2), when individuals 

utilize this option that items purchased 

must relate to a need identified in the 

service plan. 

Based on our experience with Cash 

and Counseling, we found that some 

States limited participants’ purchases to 

a list of allowable items for which no 

prior approval was necessary. Still, 

other States required prior approval for 

all items, while others provided a list of 

allowable items and required prior 

approval for other items not on the list. 

Each permissible purchase was 

determined based on an identified goal 


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in an individual’s service plan. Each 

State developed procedures that 

governed how participants could save 

an amount of their monthly budget and 

how and at what intervals the State 

would recoup funds that were not spent 

according to the purchase plan. The 

Community First Choice Option differs 

from Cash and Counseling and the 

section 1915(j) State plan Option in that 

an individual is not required to save an 

amount in a budget to purchase items 

that increase independence or substitute 

for human assistance. Therefore, in 

Community First Choice Option these 

purchases are permissible for inclusion 

in the service plan and service budget 

if applicable. CMS believes that 

permissible purchases will be a 

particularly useful tool for States to 

promote community integration. 

D. Excluded Services (§ 441.525) 

In § 441.525, consistent with the 

provisions of section 1915(k) of the Act, 

we propose the following services are 

excluded from the Community First 

Choice Option: 

• Room and board costs (except with 

respect to the transition costs identified 

above). 

• Special education and related 

services provided under the IDEA. 

• Vocational rehabilitation services 

provided under the Rehabilitations Act 

of 1973. 

• Assistive technology devices and 

assistive technology services other than 

those defined in § 441.520(a)(5). 

• Medical supplies and equipment. 

• Home modifications. 

The exclusion of room and board 

costs is consistent with section 1905(a) 

of the Act, which limits Medicaid 

coverage of room and board to an 

inpatient setting only. The goal of the 

Community First Choice option is to 

provide attendant and support services 

in the community, as such, services 

provided in an inpatient setting are 

excluded from coverage. While 

attendant services and supports may be 

provided in a residential setting in the 

community, only the costs of the 

services and supports, not the room and 

board costs of the residential setting, 

will be covered. 

The IDEA ensures every child with a 

disability has available a free 

appropriate public education that 

includes special education and related 

services. When services are identified in 

an Individualized Education Program 

(IEP) or an Individualized Family 

Service Plan (IFSP), Medicaid will only 

pay for services determined to be 

medically necessary. Therefore, at 

§ 441.525, we propose that services 

related to education only are excluded 

from this section. 

The Rehabilitation Act of 1973 

provides for direct services to people 

with disabilities which help them to 

become qualified for employment. 

Vocational services are those that teach 

specific skills required by an individual 

to perform tasks associated with 

performing a job. Therefore, at 

§ 441.525, we propose the general 

prohibition established by section 

1915(k) of the Act excluding vocational 

rehabilitation services provided under 

the Rehabilitation Act of 1973. 

We also propose at § 441.525 that 

Community First Choice would not 

include services furnished through 

another benefit or section under the Act. 

Per section 1915(k)(1)(C) of that Act, we 

propose at § 441.525 the exclusion of 

the following services: Assistive 

technology (other than what is 

described in § 441.520(a)(5); Medical 

supplies and equipment; and home 

modifications. 

The statute specifically excludes 

assistive technology devices and 

assistive technology services (other than 

back-up systems or mechanisms), 

medical equipment and home 

modifications. However, the statute 

does not define such items and 

furthermore, the statute provides that 

the excluded services and supports are 

‘‘subject to subparagraph (D)’’ which 

defines permissible services and 

supports to include expenditures 

relating to a need identified in an 

individual’s person-centered plan of 

services that increase independence or 

substitute for human assistance. In 

general, the terms ‘‘assistive technology 

devices’’ and ‘‘assistive technology 

services’’ may be broadly interpreted to 

include items and services necessary for 

an individual to make the transition 

from an institution to a communitybased setting, or that increase 

independence or substitute for human 

assistance. In addition, some medical 

equipment and environmental 

adaptations may make the provision of 

human assistance feasible when it 

would not otherwise be provided. These 

types of items could be covered under 

sections 1915(k)(1)(D)(i) and (ii) of the 

Act. For example, eating and cooking 

utensils can be fitted with oversized 

handles for easier gripping. These 

‘‘assistive devices’’ can enable an 

individual with limited hand function 

to continue to prepare meals for himself 

or herself. Further examples would 

include items such as bedside controls 

for lights and other appliances to 

increase the ability of mobility impaired 

individuals to control the lighting, 

temperature or other conditions of their 

home without getting out of bed. 

Wheelchair lifts and stair-climbs can 

provide an individual with full access 

and mobility throughout a multi-level 

home. Other self-direction programs 

have permitted the inclusion of certain 

items that could be broadly defined as 

assistive technology, medical 

equipment, and home modifications. To 

ensure that items or services that could 

be covered under sections 

1915(k)(1)(D)(i) or (ii) of the Act are not 

excluded, we interpret the provision to 

prohibit service plans from identifying 

assistive technology or services, medical 

equipment or home modifications as the 

only needed service in an individual’s 

plan of services or supports. Therefore, 

we are proposing that in Community 

First Choice some items or services that 

could be classified as assistive 

technology devices or services, medical 

equipment or home modifications may 

be covered, but only when based on a 

specific need in the person-centered 

service plan, when used in conjunction 

with other home and community-based 

attendant services. We invite comment 

on this proposal. We further propose to 

allow States to determine at what point 

the amount of funds to purchase such 

devices and adaptations places them in 

the statutorily excluded categories. We 

also invite comments on this proposal. 

E. Setting (§ 441.530) 

Section 1915(k)(1)(A)(ii) of the Act 

provides that a home and communitybased setting does not include a nursing 

facility, institution for mental diseases, 

or an intermediate care facility for the 

mentally retarded. We propose at 

§ 441.530 to adopt this statutory 

language in our regulations. 

In the June 22, 2009 Federal Register 

(74 FR 29453), we published the Home 

and Community-Based Services (HCBS) 

Waivers Advance Notice of Proposed 

Rulemaking (ANPRM) to seek public 

input on strategies to define home and 

community with regard to waivers 

under section 1915(c) of the Act. We 

recognize the important role that 

Medicaid plays in States’ efforts to 

ensure compliance with the ADA and 

the Olmstead v. L.C., 527 U.S. 581 

(1999) U.S. Supreme Court decision. In 

the Olmstead decision, the Court 

affirmed a State’s obligation to serve 

individuals in the most integrated 

setting appropriate to their needs. The 

Court held that the unjustified 

institutional isolation of people with 

disabilities is a form of unlawful 

discrimination under the ADA. We seek 

to assist States’ objective to meet these 

ADA and Olmstead obligations. 

However, a State’s Olmstead obligations 

under the ADA and section 504 of the 


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Rehabilitation Act are not defined by, or 

limited to, the scope or requirements of 

the Medicaid program and nothing in 

this regulation should be construed as 

limiting a State’s obligation to comply 

with the integration requirements under 

the ADA or section 504 of the 

Rehabilitation Act. 

Notwithstanding our continuing 

efforts to gain stakeholder input on the 

nature of HCBS settings, we are 

proposing to clarify that certain settings 

are clearly outside of what would be 

considered home and community-based 

because they are not integrated into the 

community. Section 1915(k)(1)(A)(ii) of 

the Act provides that services must be 

provided in a home or community 

setting, which excludes nursing 

facilities, institutions for mental 

diseases, and intermediate care facilities 

for the mentally retarded. However, 

there may be instances in which 

individuals reside in alternative or 

subsidiary residential settings on the 

grounds of or located adjacent to such 

institutional facilities, which are not 

licensed as institutions for the purpose 

of Medicaid reimbursement or under 

State licensing rules. We are proposing 

to clarify that home and community 

settings may not include a building that 

is also a publicly or privately operated 

facility which provide inpatient 

institutional treatment or custodial care; 

or in a building on the grounds of, or 

immediately adjacent to, a public 

institution or disability-specific housing 

complex, designed expressly around an 

individual’s diagnosis that is 

geographically segregated from the 

larger community, as determined by the 

Secretary. To maintain consistency 

across the Medicaid program, we 

anticipate adopting this same 

clarification for services provided under 

section 1915(c) of the Act and other 

authorities permitting coverage of home 

and community-based services under 

Medicaid. 

F. Assessment of Need (§ 441.535) 

Section 1915(k)(1)(A)(i) of the Act 

requires that States conduct an 

assessment of individuals’ functional 

need on which to base the personcentered service plan. We propose to 

implement this requirement at 

§ 441.535. An assessment of an 

individual’s needs, strengths, and 

preferences is crucial because it forms 

the basis for the identification of the 

needed services and supports that will 

be authorized in the individual’s 

subsequent person-centered service 

plan. The assessment should include a 

determination of whether there are any 

persons available to support the 

individual, including family members. 

These persons may be able to provide 

unpaid personal assistance, or fulfill the 

more formal roles such as acting in the 

capacity of a paid provider of attendant 

services or as an individual’s 

representative. We propose to require in 

§ 441.535 that the assessment include a 

face-to-face meeting with the individual 

(‘‘individual’’ meaning in this context, if 

applicable, the individual and the 

individual’s authorized representative 

when appropriate). 

For consistency among Medicaid 

program benefits and in keeping with 

our decisions for implementation of the 

Self-directed Personal Assistance 

Services State plan Option under 

section 1915(j) of the Act, we do not 

prescribe the assessment tool to be used 

by States, but we expect that the 

assessment will include a standardized 

set of data elements, key system 

functionality, and workflow that will be 

sufficiently comprehensive to support 

the determination that an individual 

would require attendant care services 

and supports under the Community 

First Choice State Option and the 

development of the individual’s 

subsequent service plan and budget. We 

propose at § 441.535(a), as in section 

1915(j) of the Act, that the assessment 

include information about an 

individual’s health condition, personal 

goals and preferences for the provision 

of services, identified functional 

limitations, age, school participation 

status, employment, household, and 

other factors that are relevant to the 

authorization and provision of services, 

and support the finding for need of 

home and community-based attendant 

services and supports and development 

of the service plan and budget. We are 

currently working to determine 

universal core elements to include in a 

standard assessment for consistency 

across programs. As these elements are 

identified, it is expected States will 

incorporate these elements in the 

assessment of need to be used for 

Community First Choice. We invite 

comments on the elements that should 

be included in this list. 

Finally, in § 441.535(c), we propose to 

require that the assessment of need is 

conducted at least every 12 months and 

as needed when the individual’s needs 

and circumstances change significantly, 

or as requested by an individual or their 

representative, in order to revise the 

service plan. 

G. Service Plan (§ 441.540) 

Section 1915(k)(1)(A)(i) of the Act 

require a person-centered approach to 

establishing a service plan, based on an 

assessment of need, developed in 

collaboration with an individual 

(‘‘individual’’ meaning in this context, if 

applicable, the individual and the 

individual’s authorized representative) 

choosing to receive home and 

community-based attendant services 

and supports under the Community 

First Choice State Option. In § 441.540, 

we propose to require that based on the 

assessment of need specified in 

§ 441.535, the State must develop (or 

approve, if the Plan is developed by 

others) a written service plan, in 

collaboration with the individual 

(including, for purposes of this 

paragraph, the individual and the 

individual’s authorized representative if 

applicable). The service plan must be 

created using a person-centered and 

directed planning process. 

For clarification and consistency 

among programs, our expectation 

regarding person-centered services and 

supports is that the plan reflects what is 

important to the individual and 

important for his or her health and 

welfare. The person-centered approach 

is a process, directed by the individual 

with long-term support needs, or by 

another person important in the life of 

the individual who the individual has 

freely chosen to direct this process, 

intended to identify the strengths, 

capacities, preferences, needs, and 

desired outcomes of the individual. The 

person-centered process includes the 

opportunity for the individual to choose 

others to serve as important contributors 

to the planning process. 

These participants in the personcentered planning process enable and 

assist the individual to identify and 

access a personalized mix of paid and 

non-paid services. This process and the 

resulting service plan will assist the 

individual in achieving personally 

defined outcomes in the most integrated 

community setting in a manner that 

reflects what is both important for the 

individual to meet identified support 

needs and what is important to the 

individual to ensure delivery of services 

in a manner that reflects personal 

preferences and choices and assures 

health and welfare. The individual 

identifies planning goals to achieve 

these personal outcomes in 

collaboration with those that the 

individual has identified. The identified 

personally-defined outcomes, preferred 

methods for achieving them and the 

training supports, therapies, treatments, 

and other services the individual needs 

to achieve those outcomes become part 

of the written services and support plan, 

also known as plan of care. 

Based on our experience with States’ 

self-direction waivers and 

demonstrations, we are aware that 

States have historically implemented 


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the person-centered planning process 

differently. Based on the above 

clarification of person-centered 

planning and to promote consistency 

among programs, we propose to require, 

at § 441.540(a), a person-centered 

planning process. We propose that the 

person-centered planning process 

would: 

• Include people chosen by the 

individual; 

• Provide necessary support to ensure 

that the individual has a meaningful 

role in directing the process; 

• Occur at times and locations of 

convenience to the individual; 

• Reflect cultural considerations of 

the individual; 

• Include strategies for solving 

conflict or disagreement within the 

process, including clear guidelines for 

the management of conflict of interest 

concerns among planning participants; 

• Include opportunities for periodic 

and ongoing plan updates as needed or 

requested by the individual; and 

• Offer choices to the individual 

regarding the services and supports they 

receive and from whom. 

We propose at § 441.540(b) that the 

plan resulting from this process must 

reflect the services that are important for 

the individual to meet individual 

services and support needs as assessed 

through a person-centered functional 

assessment, as well as what is important 

to the person with regard to preferences 

for the delivery of such supports. 

Commensurate with the level of need of 

the individual, the plan must reflect the 

individual’s strengths and preferences, 

as well as clinical and support needs 

(for example, as identified through a 

person-centered functional assessment). 

The plan should include individually 

identified goals, which may include 

goals and preferences related to 

relationships, community participation, 

employment, income and savings, 

health care and wellness, education, 

and others. 

The plan should reflect the services 

and supports (paid and unpaid) that 

will assist the individual to achieve 

identified goals and who provides them. 

The plan should reflect risk factors and 

measures in place to minimize them 

including back-up strategies when 

needed. The plan should be signed by 

all individuals and providers 

responsible for its implementation, 

should be understandable to the 

individual receiving services and the 

individuals important in supporting 

him or her, and should include a 

timeline for review. The plan should 

identify the individual or entity 

responsible for monitoring the plan and 

should be distributed to everyone 

involved (including the participant) in 

the plan. The plan should also be 

directly integrated into self-direction 

where individual budgets are used and 

should prevent the provision of 

unnecessary or inappropriate care. We 

invite comment on the person-centered 

process and planning elements of this 

proposed rule. 

We would also propose at § 441.540(c) 

a minimum list of policies and 

procedures associated with service plan 

development that must be completed 

and included by the State. We believe 

these are necessary to ensure the proper 

administration and development of the 

service plan. Policies and procedures 

should ensure that the responsibilities 

for assessment of need and service plan 

development are identified, the 

planning process is timely, the 

participant’s needs are assessed and 

services meet the needs. When 

determining the timeframe in which the 

planning process should occur, we 

expect States to establish guidelines that 

support a timeframe that responds to the 

needs of the individual, thus allowing 

access to needed services as quickly as 

possible. Additionally, the State must 

ensure the conflict of interest standards 

for assessment of need and service plan 

development apply to all individuals 

and entities, public or private. These 

standards at a minimum must ensure 

that the individuals and entities 

conducting the assessment of need and 

developing the service plan are not 

related by blood or marriage to the 

individual or to any paid caregiver of 

the individual, financially responsible 

for the individual, empowered to make 

financial or health-related decisions on 

behalf of the individual, and would not 

benefit financially from the provision of 

assessed needs and services. 

Section 1915(k)(1)(A)(i) of the Act 

requires that the service plan be agreed 

to in writing by the individual or, as 

appropriate, the individual’s 

representative. We propose at 

§ 441.540(d) to require that the service 

plan must be finalized and agreed to in 

writing by the individual or, as 

appropriate, the individual’s 

representative and that a copy of the 

plan must be provided to the individual. 

Finally, in § 441.540(e), we propose to 

require that the service plan be 

reviewed and revised upon 

reassessment of need at least every 12 

months, when the individual’s 

circumstances or needs change 

significantly and at the individual’s 

request. 

H. Service Models (§ 441.545) 

Section 1915(k)(1)(A)(iii) of the Act 

requires that the Community First 

Choice Option be provided under an 

agency-provider model or other model. 

Section 1915(k)(6)(C)(ii) of the Act 

defines other models to mean methods, 

other than the agency-provider model, 

for the provision of consumer controlled 

services and supports. The statute 

provides that such models may include 

vouchers, direct cash payments, or use 

of a fiscal agent to assist in obtaining 

services. 

We propose at § 441.545 that a State 

may choose one or more of the service 

delivery models defined in the statute. 

In § 441.545(a) and (b), we have 

categorized these models into two main 

groups, the Agency Model and the Selfdirected Model with Service Budget. We 

have elected the use of the term selfdirected rather than consumer 

controlled to be consistent with 

terminology in other regulatory 

provisions that offer this type of service 

delivery model including sections 

1915(i) and 1915(j) of the Act. In 

§ 441.545(a), we propose to reflect the 

statutory definition of the agency model 

as a service delivery method in which 

services and supports are provided by 

entities through a contract. 

Based on our experience with selfdirected programs, we are aware that 

States may choose to allow individuals 

to self-direct services under a traditional 

agency model or an ‘‘agency with 

choice’’ model, which utilizes a coemployment relationship between the 

individual and an agency. Under the 

traditional agency model, the individual 

retains hiring and firing authority of 

personal care attendants. The ‘‘agency 

with choice’’ utilizes a co-employment 

relationship between the individual and 

the agency. We interpret the definition 

of ‘‘agency-provider model’’ in section 

1915(k)(6)(C)(i) of the Act to include 

such delivery options as allowable 

under Community First Choice as the 

agency model. 

In § 441.545(b)(1), (b)(2) and (b)(3), we 

propose to further define the categories 

within the Self-directed Model with 

Service Budget to include the models 

specified in the statute including 

financial management entity, direct 

cash, and vouchers. We have elected to 

use the term financial management 

entity rather than fiscal agent to be 

consistent with other regulatory 

provisions that offer this type of service 

delivery model. 

In § 441.545(b)(1), we propose to 

require that the financial management 

entity perform specific functions that 

include, but are not limited to, the 

following: Collect and process 

timesheets of the individual’s workers; 

process payroll, withholding, filing and 

payment of applicable Federal, State 


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and local employment related taxes and 

insurance; maintain a separate account 

for each individual’s budget; track and 

report disbursements and balances of 

individual’s funds; process and pay 

invoices for services in the service plan; 

and provide to the individual periodic 

reports of expenditures and the status of 

the approved service budget. We 

propose to adopt these functions to be 

consistent with section 1915(j) of the 

Act in which a self-directed service 

delivery model is also defined. We 

propose in § 441.545(b)(1)(vii) that 

States may perform the functions of a 

financial management entity internally 

or use a vendor organization that has the 

capabilities to perform the required task 

in accordance with the applicable IRS 

requirements. Again, we propose this 

provision to be consistent with 

flexibility offered in section 1915(j) of 

the Act. 

We propose in § 441.545(b)(2) that the 

State have the option of disbursing cash 

prospectively to individuals selfdirecting their Community First Choice 

Option. This Direct Cash option is 

specified in section 1915(k)(6)(C)(ii) of 

the Act. To be consistent with the 

option under section 1915(j) of the Act, 

which also allows for the direct 

payment of cash, we further propose 

that if a State elects this option, it must 

meet the following requirements: Ensure 

compliance with all applicable 

requirements of the Internal Revenue 

Service, including but not limited to, 

retaining required forms and payment of 

FICA, FUTA and State unemployment 

taxes; permit individuals, or their 

representatives as applicable, using the 

cash option to choose to use the 

financial management entity for some or 

all of the functions; make available a 

financial management entity to an 

individual who has demonstrated, after 

additional counseling, information, 

training, or assistance that the 

individual cannot effectively manage 

the cash option described in this 

section. If the cash option is the only 

model offered by the State for 

Community First Choice, then the State 

may require an individual to utilize the 

financial management entity services 

under the cash option, but must provide 

the conditions under which this would 

be enforced after additional counseling, 

information, training or assistance are 

unsuccessful. 

In § 441.545(b)(3), we propose that the 

State also have the option of issuing 

vouchers as a self-directed service 

delivery model. We propose that if the 

State elects this option that it must 

ensure compliance with all applicable 

requirements of the Internal Revenue 

Service. 

I. Additional Service Plan Requirements 

for Self-Directed Model With Service 

Budget (§ 441.550) 

Section 1915(k)(1)(A)(i) of the Act 

requires that the Community First 

Choice Option be provided through a 

person-centered plan of services and 

supports that is based on an assessment 

of functional need. While the general 

requirements of the service plan are 

proposed in § 441.550, to clarify our 

expectations for a service plan when the 

State elects the option of a Self-Directed 

Service Model with Service Budget and 

to be consistent with the self-directed 

service delivery model under section 

1915(j) of the Act, we propose that the 

service plan convey authority to the 

individual to perform, at a minimum, 

specific tasks. In § 441.550, we propose 

these tasks include the ability to recruit, 

hire (including specifying worker 

qualifications), fire, supervise, and 

manage workers in the provision of 

Community First Choice Option 

services and supports. We propose that 

the expectations for managing workers 

include determining worker duties, 

scheduling workers, training workers in 

assigned tasks, and evaluating workers’ 

performance. In addition, we propose 

that the service plan describe the ability 

of the individual to determine the 

amount paid for a service, support, or 

item, as well as the ability to review and 

approve provider invoices. It is the 

approval of the service plan that 

authorizes the individual to undertake 

these activities as part of the selfdirected service delivery model. The 

service plan must encompass both the 

general decision-making authority that 

an individual has and outline the 

individualized services and supports to 

address the individual’s needs, abilities, 

preferences and choices. In our 

experience with self-directed programs 

these components of the service plan 

have been critical elements in the 

implementation of successful programs. 

Therefore, we propose to adopt the same 

elements in this provision of selfdirected services. 

J. Support System (§ 441.555) 

Based on our experience with selfdirection programs, we are aware that 

the support system provided by the 

State is a critical element of the service 

delivery model. Therefore, to maintain 

consistency and to reflect our policy 

relating to self-direction, in § 441.555 

we propose the requirement that the 

State have in place a support system. 

While we do not prescribe the way 

States are to design their support 

system, in order to allow flexibility, 

based on our experience, we include in 

the proposed regulation a minimum list 

of activities for which individuals may 

need information, counseling, training, 

or assistance, but States may offer 

additional activities. Generally, the 

activities requiring support include 

participant rights information and how 

the self-directed model of service 

delivery operates. 

K. Service Budget Requirements 

(§ 441.560) 

While section 1915(k) of the Act does 

not specifically address the requirement 

for an individual to have authority over 

a budget, in § 441.560 we have proposed 

specific service budget requirements 

based on experience with the section 

1915(j) self-directed service delivery 

model which utilizes the options of 

financial management entities and 

direct cash payments. The requirements 

of section 1915(j) of the Act were 

supported by the experience of section 

1115 demonstrations and proven to be 

successful models for implementation of 

a self-directed service model with a 

service budget. The service budget 

amount is the cap on the amount of 

funds available to an individual with 

which to purchase self-directed 

Community First Choice Option 

services and supports. Therefore, in 

§ 441.560(a), we require that a service 

budget be developed and approved by 

the State and include specific items 

such as the specific dollar amount, how 

the individual is informed of the 

amount, and the procedures for how the 

individual may adjust the budget. 

In § 441.560(b), we propose that the 

budget methodology set forth by the 

State meet certain criteria such as being 

objective and evidence based, be 

applied consistently to individuals in 

the program, and be included in the 

State plan. In addition, we propose the 

budget methodology include 

calculations of the expected costs of 

Community First Choice Option 

services and supports if those services 

and supports were not self-directed. We 

recognize in § 441.560(b)(5) that States 

may place monetary or budgetary limits 

on self-directed Community First 

Choice Option services. Therefore, if a 

State does so, we would require that the 

State have a process in place that 

describes the limits and the basis for the 

limits, and any adjustments that will be 

allowed and the basis for the 

adjustments, such as an individual’s 

health and welfare. 

Additionally, we propose to require 

certain beneficiary safeguards in light of 

these possible limitations. First, we 

propose that States have procedures to 

adjust a budget when a reassessment 

indicates a change in a participant’s 


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medical condition, functional status, or 

living situation to ensure that the budget 

amount is appropriate to the 

individual’s current needs. Second, we 

propose that States have a method of 

notifying participants of the amount of 

any limit that applies to an individual’s 

Community First Choice Option 

services and supports. Finally, we 

propose that the budget not restrict 

access to other medically necessary care 

and services furnished under the State 

plan and approved by the State but not 

included in the budget. Based on our 

experience in other self-directed 

programs like those specified in section 

1915(j) of the Act, these components of 

the budget and the budget methodology 

are critical elements of a successful 

program. We invite comments on this 

approach. 

L. Provider Qualifications (§ 441.565) 

Section 1915(k)(1)(A)(iv)(III) of the 

Act requires that Community First 

Choice State Option services and 

supports be provided by individuals, 

including family members, who are 

qualified to provide such services. We 

reflect these requirements in the 

proposed regulation at § 441.565. We 

propose in § 441.565(a) to require that 

States provide assurance that necessary 

safeguards have been taken to protect 

the health and welfare of the enrollees 

in the Community First Choice State 

Option by provision of adequate 

standards for all types of providers of 

attendant services and supports under 

the option. States must define 

qualifications for providers of attendant 

services and supports under the agency 

model. 

Self-direction is an integral 

component of the Community First 

Choice State Option. This is reflected in 

§ 441.565(b) through (d). To ensure that 

individuals maintain the ability to 

participate in and control the provision 

of Community First Choice Option 

attendant services and supports, we 

propose in § 441.565(b) that individuals 

can choose any qualified provider, 

including family members, to provide 

such services. In § 441.565(c), we 

propose that individuals retain the right 

to train their workers in the specific 

areas of attendant services and supports 

needed by the individual and to perform 

the needed assistance in a manner that 

comports with participants’ personal 

preferences, as well as their needs, 

which we believe is an important 

component of self-direction based on 

our experience with the self-direction 

waiver and demonstration programs. In 

this way, workers benefit from clear 

instructions about how to effectively 

and appropriately deliver the attendant 

services, and any potential 

dissatisfaction with the way services are 

being delivered can be averted. We 

further propose, at § 441.565(d), that 

individuals retain the right to establish 

additional staff qualifications based on 

their needs and preferences. Again, we 

believe that the individual is in the best 

position to set forth the particular staff 

qualifications needed to meet the 

particular preferences of the individual. 

For example, if the individual 

communicates best using American Sign 

Language (ASL), the individual may 

require the worker to be able to 

communicate using ASL. 

M. State Assurances (§ 441.570) 

Section 1915(k)(3)(C) of the Act 

requires that, for the first full fiscal year 

in which the State plan amendment is 

implemented, the State must maintain 

or exceed the level of expenditures for 

services provided under sections 

1905(a), section 1915, or section 1115 of 

the Act, or otherwise, to individuals 

with disabilities or elderly individuals 

attributable to the preceding fiscal year. 

We interpret this requirement to mean 

that, for the first 12 months the State 

chooses to offer this option in the State 

plan, the State’s share of Medicaid 

expenditures for individuals with 

disabilities or elderly individuals must 

remain at the same level or be greater 

than expenditures from the previous 

year. We also interpret this requirement 

to be limited to personal care attendant 

services. We propose to implement this 

requirement at § 441.570. States will 

need to identify the existing programs 

for individuals with disabilities and 

elderly individuals and the related 

expenditures to be monitored for this 

requirement and calculation. We will 

provide future guidance on the format of 

this reporting requirement. 

Section 1915(k)(4) of the Act requires 

States that elect this option to comply 

with certain laws in the provision of the 

Community First Choice Option 

regardless of which service delivery 

model the State elects. Specifically, the 

statute requires that services and 

supports are provided in accordance 

with the Fair Labor Standards Act of 

1938 and applicable Federal and State 

laws regarding withholding and 

payment of Federal and State income 

and payroll taxes; provision of 

unemployment and workers 

compensations insurance; maintenance 

of general liability insurance; and 

occupational health and safety. We 

propose to include these assurances as 

specified in the statute at § 441.570(b). 

N. Development and Implementation 

Council (§ 441.575) 

Under this State plan option, the 

statute requires a State to consult and 

collaborate with a Development and 

Implementation Council during the 

development and implementation of a 

State plan amendment under this 

subsection. Section 1915(k)(3)(A) of the 

Act requires that the council include a 

majority of members with disabilities, 

elderly individuals, and their 

representatives. We recognize that 

stakeholder input is an important piece 

of the Medicaid program and agree that 

this council will provide additional 

opportunities for stakeholder 

collaboration. We propose to set forth 

this requirement as defined by the 

statute at § 441.575. We invite comment 

on how States can achieve robust 

stakeholder input including 

transparency in the selection process 

and the activities of the council. 

O. Data Collection (§ 441.580) 

Section 1915(k)(5)(B) of the Act 

requires that States provide CMS with 

information regarding the provision of 

home and community-based attendant 

services and supports under the 

Community First Choice Option for 

each fiscal year for which such services 

and supports are provided. The statute 

requires States to provide data including 

the number of individuals who are 

estimated to receive Community First 

Choice Option services and supports 

during the fiscal year, the number of 

individuals that have received such 

services and supports during the 

preceding fiscal year, the specific 

number of individuals served by type of 

disability, age, gender, education level 

and employment status, and whether 

the specific individuals have been 

previously served under any other home 

and community-based services program 

under the State plan or under a waiver. 

We propose to adopt these requirements 

as detailed in the statute at § 441.580. 

We will provide future guidance on the 

format of this reporting requirement. 

Section 1915(k)(3)(E) of the Act requires 

States to collect and report information 

for the purposes of approving the State 

plan amendment, providing Federal 

oversight and conducting an evaluation 

of the provision of the Community First 

Choice State Option. The data collected 

through this requirement and the 

quality assurance system will help 

determine how States are currently 

providing home and community-based 

services, the cost of those services, and 

whether States are currently offering 

individuals with disabilities who 

otherwise qualify for institutional care 


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under Medicaid the choice to instead 

receive home and community-based 

services, as required by the U.S. 

Supreme Court in Olmstead v. L.C. 

(1999). We will provide future guidance 

on the format of this reporting 

requirement. 

P. Quality Assurance System (§ 441.585) 

We propose in § 441.585 the 

requirements for the comprehensive 

continuous quality assurance system 

that the State must establish and 

maintain as set forth in section 

1915(k)(3)(D) of the Act. The system 

must employ measures for program 

performance and quality of care, 

standards for delivery models, 

mechanisms for discovery and 

remediation, and quality improvements 

proportionate to the benefit and number 

of individuals served. The system must 

also include a quality improvement 

strategy that reflects the nature and 

scope of the benefit the State will 

provide. The statute also requires 

stakeholder input and feedback to be 

incorporated in the quality assurance 

system and for information regarding 

quality assurance to be provided to each 

individual receiving Community First 

Choice State Option services. We 

propose to adopt these requirements in 

§ 441.585(a)(4) and § 441.585(b). We 

will review the State’s description of the 

quality assurance system and 

improvement plan when we review the 

State’s Medicaid plan amendment 

electing the Community First Choice 

State Option. 

In § 441.585(a)(1), we propose to 

require States to have program 

performance measures, appropriate to 

the scope of the benefit, designed to 

assess the State’s overall system for 

providing home and community-based 

attendant services and supports. 

In § 441.585(a)(2), we propose to 

require States to have quality of care 

measures that may be used to measure 

individual outcomes associated with the 

receipt of community-based attendant 

services and supports, such as function 

indicators and measures of individual 

satisfaction. These measures must be 

made available to CMS upon request 

and must include a process for the 

mandatory reporting, investigation, and 

resolution of allegations of neglect, 

abuse, or exploitation in connections 

with provision of Community First 

Choice services as well as quality 

indicators approved or prescribed by the 

Secretary. 

In § 441.585(a)(3), we propose to 

require States to have standards for 

agency-based and other delivery models 

for training, appeals for denials and 

reconsideration procedures on an 

individual service plan. 

Q. Increased Federal Financial 

Participation (§ 441.590) 

Unlike similar programs such as those 

specified under sections 1915(c) and 

1915(j) of the Act, section 1915(k) of the 

Act does not allow States to choose only 

specific categories or types of home and 

community-based attendant services 

and supports to be included in the 

overall service benefit. Recognizing the 

section 1915(k) option is a more robust 

service package, section 1915(k)(2) of 

the Act requires States to receive an 

increased FMAP of 6 percent for the 

provision of services under the 

Community First Choice Option 

effective October 1, 2011, or later under 

an approved State plan amendment. We 

propose to implement this requirement 

at § 441.590. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment on 

each of these issues for the following 

sections of this document that contain 

information collection requirements 

(ICRs): 

A. ICRs Regarding Assessment of Need 

(§ 441.535) 

Proposed § 441.535 would require 

States to conduct face-to-face 

assessments of the individual’s needs, 

strengths and preferences. Specifically, 

the face-to-face assessments may use 

one or more processes and techniques to 

obtain information about an individual, 

including but not limited to the 

information listed in proposed 

§ 441.535(a)(1) through (8). In addition 

to the initial face-to-face assessment, 

proposed § 441.535 would require States 

to conduct face-to-face assessments at 

least every 12 months as needed. The 

burden associated with this requirement 

would be the time required for a State 

to conduct a face-to-face assessment. We 

estimate that all States that elect this 

option will comply with this 

requirement. We further estimate that it 

will take each State 1 hour to perform 

a face-to-face assessment; however, we 

know that the number of assessments 

will vary according to the number of 

participants in each State under this 

State plan option. Because we cannot 

accurately quantify the number of 

assessments per State, we are soliciting 

public comment pertaining to the per 

State volume and will reevaluate this 

issue and the associated burden 

estimate in the final rule stage of 

rulemaking. 

B. ICRs Regarding Service Plan 

(§ 441.540) 

As stated in proposed § 441.540(a), 

the State must develop a personcentered planning process resulting in a 

service plan, based on the assessment of 

need, in collaboration with the 

individual and the individual’s 

authorized representative, if applicable. 

Proposed § 441.540(b) lists the 

minimum components of a personcentered service plan, while proposed 

§ 441.540(c) lists the requirements of a 

service plan. Proposed § 441.540(d) 

would require that a service plan must 

be agreed to in writing by the individual 

or the individual’s representative, if 

applicable. In addition, States must 

provide a copy of the plan to the 

individual. 

The burden associated with the 

aforementioned requirements is the time 

and effort necessary for a State to both 

develop and finalize a written service 

plan for each individual. We estimate 

that it will take each State an average of 

2 hours to develop and finalize a service 

plan. Because we cannot accurately 

quantify the number of service plans per 

State, we are soliciting public comment 

pertaining to the per State volume and 

will reevaluate this issue and the 

associated burden estimate in the final 

rule stage of rulemaking. 

In addition to the burden associated 

with developing and finalizing service 

plans, proposed § 441.540 also imposes 

a disclosure requirement. As part of the 

finalization process, States are required 

to give each individual a copy of the 

service plan. We estimate that it will 

take each State 30 minutes to produce 

and disseminate a copy of a finalized 

report to an individual. The total 

estimated burden associated with this 

disclosure requirement will vary 


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according to the number of participants 

in each State under this State plan 

option. Because we cannot accurately 

quantify the number of plan copies each 

State will need to distribute to the 

individuals in the State plan option, we 

are soliciting public comment 

pertaining to the number of plan copies 

distributed per State and will reevaluate 

this issue and the associated burden 

estimate in the final rule stage of 

rulemaking. 

Proposed § 441.540(e) would require 

States to review each service plan at 

least every 12 months. We estimate that 

it will take each State 1 hour to annually 

review and revise (upon reassessment of 

need or at the individual’s request) a 

single written service plan. The total 

estimated burden associated with this 

requirement will vary according to the 

number of participants in each State 

under this State plan option. Because 

we cannot accurately quantify the 

number of plans each State will need to 

review annually, we are soliciting 

public comment pertaining to the 

number of plans each State must review 

annually and will reevaluate this issue 

and the associated burden estimate in 

the final rule stage of rulemaking. 

C. ICRs Regarding Service Models 

(§ 441.545) 

Proposed § 441.545 would require 

State to choose one or more service 

delivery models by which to provide 

self-directed home and communitybased attendant services and supports. 

Specifically, a State may choose one or 

more of the models discussed in 

proposed § 441.545(a) through (b). 

While we acknowledge that the service 

models discussed in proposed 

§ 441.545(a) through (b) contain 

information collection requirements, it 

is difficult for us to accurately quantify 

both the number of States that will avail 

themselves of these models and the time 

associated with the information 

collection requirements contained 

therein. As a result, because we are 

unable to estimate both the total number 

of participating States and the burden 

associated with these requirements, we 

are soliciting public comment 

pertaining to this burden and will 

reevaluate this issue in the final rule 

stage of rulemaking. 

D. ICRs Regarding Support System 

(§ 441.555) 

As stated in proposed § 441.555, for 

the self-directed model with a service 

budget, States must provide or arrange 

for the provision of a support system. 

Proposed § 441.555(a) would require a 

support system to appropriately assess 

and counsel an individual or the 

individual’s representative, if 

applicable, before enrollment. Proposed 

§ 441.555(b) would require that the 

support system to provide appropriate 

information, counseling, training and 

assistance to ensure that an individual 

is able to manage the services and 

budgets. In addition, proposed 

§ 441.555(b) would require that the 

information be communicated to the 

individual in a manner and language 

understandable by the individual. 

The burden associated with proposed 

§ 441.555 would be the time and effort 

necessary for the State or the provider 

of the support system to meet the 

aforementioned disclosure 

requirements. We estimate that it will 

take each State 2 hours to provide or 

arrange for the provision of a support 

system that meets the necessary 

requirements. However, we cannot 

estimate the frequency with which a 

State will provide or arrange for the 

provision of support systems, as it will 

vary by State depending on the number 

of participants that are assessed to need 

this service. Because we cannot 

accurately quantify the frequency with 

which a State will provide or arrange for 

the provision of support systems, we are 

soliciting public comments on this issue 

and will reevaluate the associated 

burden estimate in the final rule stage 

of rulemaking. 

E. ICRs Regarding Service Budget 

Requirements (§ 441.560) 

Proposed § 441.560(a) would require, 

for the self-directed model with a 

service budget, that a service budget be 

developed and approved by the State 

based on the assessment of need and 

service plan. The budget must include 

all of the information listed in 

§ 441.560(a) through (b). The burden 

associated with this requirement is the 

time and effort put forth by the State to 

develop a service budget. We estimate 

that it will take each State 3 hours to 

develop a service budget; however, the 

total number of budgets each State must 

prepare will depend on the number of 

individual’s utilizing the self-directed 

model in each State. Because we are 

unable to estimate the total number of 

service budgets each State would be 

required to develop, we are soliciting 

public comments pertaining to this 

issue and will reevaluate the burden 

estimate in the final rule stage of 

rulemaking. 

Proposed § 441.560(c) would require 

States to have procedures in place that 

will provide safeguards to individuals 

when the budgeted services amount is 

insufficient to meet the individual’s 

needs. The burden associated with this 

requirement is the time and effort it 

would take for a State to develop and 

maintain its procedures. We estimate 

that will take each State 16 hours to 

develop these procedures. Similarly, we 

estimate that all States that elect this 

State plan option will comply with this 

requirement. We believe this 

requirement imposes a one-time burden; 

therefore, we have not assigned any 

future burden to this requirement. We 

cannot estimate the total annual burden 

associated with this requirement 

because it will vary by State. Because 

we cannot quantify the aforementioned 

burden, we are soliciting public 

comments pertaining to this issue and 

will reevaluate the burden estimate in 

the final rule stage of rulemaking. 

Proposed § 441.560(d) would require 

a State to have a method of notifying 

individuals of the amount of any limit 

that applies to an individual’s 

Community First Choice Option 

services and supports. The burden 

associated with this requirement is the 

time and effort it would take for each 

State to develop and distribute a notice 

to each individual. We estimate that all 

States that elect this option must 

comply with this notification 

requirement. We further estimate it 

would take each State 15 minutes to 

develop and distribute a single notice. 

The total number of notices each State 

must distribute will vary depending on 

the number of individual’s utilizing the 

self-directed model in each State. 

Therefore, we are unable to estimate the 

burden associated with this 

requirement. We are soliciting public 

comments pertaining to this issue and 

will reevaluate the burden estimate in 

the final rule stage of rulemaking. 

F. ICRs Regarding Provider 

Qualifications (§ 441.565) 

Proposed § 441.565 would require 

States to provide assurances that 

necessary safeguards have been taken to 

protect the health and welfare of 

enrollees in the Community First Choice 

State Option. In addition, the States 

must define in writing the adequate 

qualifications for providers in the 

agency model of Community First 

Choice services and supports. The 

burden associated with the 

aforementioned requirements is the time 

and effort necessary to develop system 

safeguards that include written 

adequacy qualifications for providers. 

We estimate that it will take each State 

16 hours to comply with this 

requirement; however, the total 

estimated annual burden associated 

with these requirements will vary by 

State. We are unable to estimate the 

total number of written assurances that 

will be required; therefore, we are 


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Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Proposed Rules 10747 

seeking public comment pertaining to 

this issue and will reevaluate the 

burden estimate in the final rule stage 

of rulemaking. 

G. ICRs Regarding Data Collection 

(§ 441.580) 

Proposed § 441.580 would require a 

State to provide information regarding 

the provision of home and communitybased attendant services and supports 

under the Community First Choice 

Option for each fiscal year for which 

such services are provided. Specifically, 

States must submit the information 

contained in proposed § 441.580(a) 

through (f). We estimate that it will take 

each State 24 hours to submit the 

required information. We also estimate 

that all States that elect this State plan 

option must comply with this 

requirement. The total estimated annual 

burden associated with this requirement 

is 24 hours at a cost of $576 per State 

for the initial year. 

H. ICRs Regarding Quality Assurance 

System (§ 441.585) 

Proposed § 441.585 would require 

each State to establish and maintain a 

comprehensive, continuous quality 

assurance system, detailed in the State 

plan amendment, that includes a quality 

improvement strategy and employs 

measures for program performance and 

quality of care, standards for delivery 

models, mechanisms for discovery and 

remediation, and quality improvements 

proportionate to the benefit and number 

of individuals served. Specifically, the 

quality assurance system must include 

but not be limited to the components 

listed in proposed § 441.585(a) through 

(c). The burden associated with this 

requirement is the time and effort 

necessary for a State to develop and 

maintain a quality assurance system. We 

estimate that it will take 100 hours for 

each State to comply with the initial 

requirement to develop a quality 

assurance system. The total estimated 

annual burden associated with 

developing a quality assurance system is 

100 hours per State, at a cost of $2,400. 

Similarly, we estimate that each State 

will incur an annual burden of 16 hours 

to review and maintain its quality 

assurance system. The total estimated 

annual burden associated with 

reviewing a quality assurance system is 

16 hours at a cost of $384 for each 

participating State. 

If you comment on these information 

collection and recordkeeping 

requirements, please do either of the 

following: 

1. Submit your comments 

electronically as specified in the 

ADDRESSES section of this proposed rule; 

or 

2. Submit your comments to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, 

Attention: CMS Desk Officer, [CMS– 

2337–P]. 

Fax: (202) 395–6974; or 

E-mail: OIRA_submission

@omb.eop.gov. 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact Analysis 

A. Statement of Need 

This proposed rule implements 

section 2401 of the Affordable Care Act 

of 2010, as amended by the Health Care 

and Education Reconciliation Act of 

2010. The Secretary is to establish a new 

State plan option to provide home and 

community-based attendant services 

and supports at a 6 percentage point 

increase in Federal matching payments 

for expenditures related to the provision 

of services under this option. Section 

2401 of the Affordable Care Act, entitled 

‘‘Community First Choice Option,’’ adds 

a new section 1915(k) of the Act that 

allows States, at their option, to provide 

home and community-based attendant 

services and supports under their State 

plan beginning October 1, 2011. 

B. Overall Impact 

We have examined the impacts of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (February 2, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(Pub. L. 104–4), Executive Order 13132 

on Federalism (August 4, 1999), and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). A regulatory impact 

analysis (RIA) must be prepared for 

major rules with economically 

significant effects ($100 million or more 

in any 1 year). The proposed rule is 

estimated to have an economic impact 

of approximately $1,585,000,000 in the 

fiscal year beginning on October 1, 

2011. Therefore, we estimate that this 

rulemaking is economically significant 

as measured by the $100 million 

threshold, and hence also a major rule 

under the Congressional Review Act. 

Accordingly, we have prepared an RIA 

below that to the best of our ability 

presents the costs and benefits of the 

rulemaking. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities if a rule has a significant impact 

on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other health care 

providers and suppliers are small 

entities, either by being nonprofit 

organizations or by meeting the SBA 

definition of a small business and 

having revenues of less than $7 million 

to $34.5 million in any 1 year. (For 

details, see the Small Business 

Administration’s Table of Size 

Standards at http://ecfr.gpoaccess.gov/

cgi/t/text/text-idx?c=ecfr&sid=2465b064

ba6965cc1fbd2eae60854b11

&rgn=div8&view=text&node=13:1.0.1.1.

16.1.266.9&idno=13.) Individuals and 

States are not included in the definition 

of a small entity. We are not preparing 

an analysis for the RFA because we have 

determined, and the Secretary certifies, 

that this proposed rule would not have 

a significant impact on a substantial 

number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a metropolitan statistical area and has 

fewer than 100 beds. We are not 

preparing an analysis for section 1102(b) 

of the Act because the Secretary has 

determined that this proposed rule will 

not have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 


emcdonald on DSK2BSOYB1PROD with PROPOSALS2
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anticipated costs and benefits before 

issuing any rule whose mandates 

require spending in any 1 year of $100 

million in 1995 dollars, updated 

annually for inflation. In 2011, that 

threshold is approximately $136 

million. Because this rule does not 

mandate State participation in section 

1915(k) of the Act, there is no obligation 

for the State to make any change to their 

Medicaid program. As a result, there is 

no mandate for the State. Therefore, we 

estimate this rule will not mandate 

expenditures in the threshold amount of 

$136 million in any 1 year. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

As stated above, this proposed rule 

would not have a substantial effect on 

State and local governments. 

C. Anticipated Effects 

1. Overview 

This proposed rule provides States 

with additional flexibility to finance 

home and community based services by 

establishing a new Community First 

Choice Option at an increased Federal 

financial participation for attendant 

services and supports. Because of this 

enhanced flexibility, and the fact that a 

majority of States may already provide 

attendant services and supports through 

optional medical assistance services in 

its Medicaid State plan, HCBS waiver 

programs or both, we anticipate that 

each State will likely compare and 

decide which vehicle provides greater 

benefits and stability to their overall 

Medicaid program. As such, at this time 

it is very difficult to accurately predict 

how many States will choose to adopt 

the Community First Choice (CFC) 

Option, and how a State’s election to 

exercise this option will influence other 

parts of its Medicaid program. However, 

for purposes of this RIA, we assume a 

gradual growth in the number of States 

adopting this option, so that, by FY 

2015, 25 percent of eligible persons who 

would want this coverage would reside 

in States that offer it. 

2. Effects on Medicaid Recipients 

We anticipate that a large number of 

Medicaid recipients will be affected. We 

believe the optional expansion of 

settings where attendant care services 

and supports may be furnished at the 

increased Federal Medical Assistance 

Percentage (FMAP) will likely have 

significant positive effects on Medicaid 

recipients, particularly on their demand 

for these services. We anticipate that the 

provisions of the proposed rule will 

likely increase State and local 

accessibility to services that augment 

the quality of life for individuals 

through a person-centered plan of 

service and various quality assurances, 

all at a potentially lower per capita cost 

relative to alternative care-settings. 

3. Effects on Other Providers 

We anticipate that this proposed rule 

will increase the demand for attendant 

care services and supports. We believe 

this effect will be beneficial to 

providers, particularly providers of 

attendant care services and supports. 

Additionally, if the increase in demand 

for such services is sufficient, the 

number of providers of such services 

may increase. 

4. Effects on the Medicaid Program 

Expenditures 

Table 1 provides estimates of the 

anticipated Medicaid program 

expenditures associated with furnishing 

attendant care services and supports. 

The estimates were made using various 

assumptions about increases in service 

utilization and costs, as well as 

assumptions about the induced 

utilization that may result from the CFC 

option. We have taken into account the 

varying costs for those who have a need 

for an institutional level of care as 

opposed to those who do not. We have 

allowed for possible State incentives 

due to the increased FMAP rate, as well 

as for the possibility of savings due to 

beneficiaries being diverted from 

nursing facility use. Given these 

assumptions and based on prior 

program experience, our estimate is 

shown in Table 1. We estimate the 

following costs to the Medicaid 

program: 

TABLE 1—ATTENDANT CARE SERVICES AND SUPPORTS MEDICAID COST ESTIMATES

[In millions] 1

Services FY 2011 FY 2012 FY 2013 FY 2014 FY2015 

Federal Share ...................................................................... N/A $1,075 $1,475 $2,425 $3,420 

State Share .......................................................................... N/A 510 615 1,085 1,540 

Total .............................................................................. N/A 1,585 2,090 3,510 4,960 

1Figures are rounded to the nearest $1 million and assume increased State participation per fiscal year. 

5. Effects on States 

Varying State definitions of personal 

care services and rules concerning who 

may furnish them make it difficult to 

estimate accurately the potential 

increases in expenditures for States that 

choose to adopt the CFC option under 

section 1915(k) of the Act. Therefore, in 

light of the provisions of this proposed 

rule, we welcome comments about the 

number of States that are likely to 

participate in the CFC program. 

D. Alternatives Considered 

Section 2401 of the Affordable Care 

Act is the legislation that we are 

required to implement. Therefore we 

considered no other alternatives. 

E. Accounting Statement 

As required by OMB Circular A–4 

(available at: http:// 

www.whitehouse.gov/sites/default/files/ 

omb/assets/omb/circulars/a004/a4.pdf), we have prepared an accounting 

statement showing the classification of 

expenditures associated with the 

provisions of this rule and discussed 

earlier in the RIA. This statement, to the 

best of our ability, captures the 

anticipated distributional effects of 

section 1915(k) services offered by 

qualified providers in the Medicaid 

program. 


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Federal Register / Vol. 76, No. 38 / Friday, February 25, 2011 / Proposed Rules 10749 

TABLE 2—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURE FROM FY 2011 TO FY 2015 

[In millions] 

CATEGORY 

BENEFITS Qualitative: Provision of the CFC option will increase State and local accessibility to services 

that increase the quality of life for individuals through a person-centered plan of service and 

various quality assurances, and reduce the financial strain on States and Medicaid participants. 

COSTS Administrative costs included in the Paperwork Reduction Act section of the preamble. 

TRANSFERS PRIMARY ESTIMATE 

Federal Annualized Monetized 3 percent Discount Rate 7 percent Discount Rate 

($millions/year) $1,630.6 $1,568.6 

From Whom to Whom? Federal Government to Qualified Providers. 

State Annualized Monetized 

($millions/year) $728.4 $700.8 

From Whom to Whom? State Governments to Qualified Providers. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects in 42 CFR Part 441 

Aged, Family planning, Grant 

programs—health, Infants and children, 

Medicaid, Penalties, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR Chapter IV as set forth below: 

PART 441—SERVICES: 

REQUIREMENTS AND LIMITS 

APPLICABLE TO SPECIFIC SERVICES 

1. The authority citation for part 441 

continues to read as follows: 

Authority: Sec 1102 of the Social Security 

Act (42 U.S.C 1302). 

2. Part 441 is amended by adding 

subpart K to read as follows: 

Subpart K—Home and Community-based 

Attendant Services and Supports State Plan 

Option (Community First Choice) 

Sec. 

441.500 Basis and scope. 

441.505 Definitions. 

441.510 Eligibility. 

441.515 Statewideness. 

441.520 Required services. 

441.525 Excluded services. 

441.530 Setting. 

441.535 Assessment of need. 

441.540 Person-centered service plan. 

441.545 Service models. 

441.550 Service plan requirements for selfdirected model with service budget. 

441.555 Support system. 

441.560 Service budget requirements. 

441.565 Provider qualifications. 

441.570 State assurances. 

441.575 Development and Implementation 

Council. 

441.580 Data collection. 

441.585 Quality assurance system. 

441.590 Increased Federal financial 

participation. 

Subpart K—Home and Communitybased Attendant Services and 

Supports State Plan Option 

(Community First Choice) 

§ 441.500 Basis and Scope. 

(a) Basis. This subpart implements 

section 1915(k) of the Act concerning 

the Community First Choice Option to 

provide home and community-based 

attendant services and supports through 

a State plan. 

(b) Scope. The Community First 

Choice Option is designed to make 

available home and community-based 

attendant services and supports to 

eligible individuals, as needed, to assist 

in accomplishing activities of daily 

living (ADLs), instrumental activities of 

daily living (IADLs), and health-related 

tasks through hands-on assistance, 

supervision, or cueing. 

§ 441.505 Definitions. 

As used in this subpart: 

Activities of daily living (ADLs) means 

basic personal everyday activities 

including, but not limited to, tasks such 

as eating, toileting, grooming, dressing, 

bathing, and transferring. 

Agency-provider model means, with 

respect to the provision of home and 

community-based attendant services 

and supports, a method of providing 

self-directed services and supports 

under which entities contract for the 

provision of these services and 

supports. 

Backup systems and supports means 

electronic devices used to ensure 

continuity of services and supports. 

These items may include pagers, 

personal emergency response systems, 

and other mobile communication 

devices. Persons identified by an 

individual can also be included as 

backup supports. 

Health-related tasks means specific 

tasks related to the needs of an 

individual, which can be delegated or 

assigned by licensed health-care 

professionals under State law to be 

performed by an attendant. 

Individual’s representative means a 

parent, family member, guardian, 

advocate, or other authorized 

representative of the individual. 

Instrumental activities of daily living 

(IADLs) means activities related to 

living independently in the community, 

including but is not limited to, meal 

planning and preparation, managing 

finances, shopping for food, clothing, 

and other essential items, performing 

essential household chores, 

communicating by phone or other 

media, and traveling around and 

participating in the community. 

Other models means methods, other 

than an agency-provider model, for the 

provision of self-directed services and 

supports. These models may include the 

provision of vouchers, direct cash 

payments, or use of a fiscal agent to 

assist in obtaining services. 

Self-directed means a consumer 

controlled method of selecting and 

providing services and supports that 

allow the individual, or where 

appropriate, the individual’s 

representative, maximum control of the 

home and community-based attendant 


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services and supports, regardless of who 

acts as the employer of record. 

§ 441.510 Eligibility. 

To receive Community First Choice 

services under this section, an 

individual must meet the following 

requirements: 

(a) Be eligible for medical assistance 

under the State plan. 

(b) Have an income that meets one of 

the following thresholds as determined 

annually: 

(1) Is equal to or less than 150 percent 

of the Federal poverty level (FPL). 

(2) Is greater than 150 percent of the 

FPL, and is eligible for nursing facility 

services under the State plan and for 

whom it has been determined that in the 

absence of home and community-bases 

attendant services and supports, the 

individual would otherwise require a 

Medicaid covered level of care 

furnished in a hospital, a nursing 

facility, an intermediate care facility for 

the mentally retarded or an institution 

for mental diseases. 

(3) Qualifies for Medicaid assistance 

under the special home and communitybased waiver eligibility group defined at 

section 1902(a)(10)(A)(ii)(VI) of the Act, 

and is receiving at least one home and 

community-based waiver service per 

month. 

(c) In determining whether the 150 

percent of the FPL requirement is met, 

States must apply the same income 

disregards in accordance with section 

1902(r)(2) of the Act as they do under 

their Medicaid State plan. 

§ 441.515 Statewideness. 

States must provide the Community 

First Choice Option to individuals: 

(a) On a Statewide basis. 

(b) In a manner that provides such 

services and supports in the most 

integrated setting appropriate to the 

individual’s needs, and without regard 

to the individual’s age, type or nature of 

disability, severity of disability, or the 

form of home and community-based 

attendant services. 

(c) In a manner that provides the 

supports that the individual requires in 

order to lead an independent life. 

§ 441.520 Required services. 

(a) If a State elects to provide the 

Community First Choice Option, the 

State must provide all of the following 

services: 

(1) Assistance with ADLs, IADLs, and 

health-related tasks through hands-on 

assistance, supervision, or cueing. 

(2) Acquisition, maintenance, and 

enhancement of skills necessary for the 

individual to accomplish ADLs, IADLs, 

and health related tasks. 

(3) Back-up systems or mechanisms to 

ensure continuity of services and 

supports, as defined in § 441.505 of this 

subpart. 

(4) Voluntary training on how to 

select, manage, and dismiss attendants. 

(b) The State may provide permissible 

services and supports which include the 

following: 

(1) Expenditures for transition costs 

such as rent and utility deposits, first 

month’s rent and utilities, bedding, 

basic kitchen supplies, and other 

necessities required for an individual to 

transition from a nursing facility, 

institution for mental diseases, or 

intermediate care facility for the 

mentally retarded to a community-based 

home setting where the individual 

resides. 

(2) Expenditures relating to a need 

identified in an individual’s personcentered plan of services that increase a 

participant’s independence or substitute 

for human assistance, to the extent that 

expenditures would otherwise be made 

for the human assistance. 

(3) The services and supports that are 

purchased must be linked to an assessed 

need or goal established in the 

individual’s person-centered service 

plan. 

§ 441.525 Excluded services. 

The Community First Choice Option 

may not include the following: 

(a) Room and board costs for the 

individual, except for allowable 

transition services described in 

§ 441.520(b)(1) of this subpart. 

(b) Special education and related 

services provided under the Individuals 

with Disabilities Education Act that are 

related to education only, and 

vocational rehabilitation services 

provided under the Rehabilitation Act 

of 1973. 

(c) Assistive devices and assistive 

technology services other than those 

defined in § 441.520(a)(5) of this subpart 

or those that are based on a specific 

need identified in the service plan when 

used in conjunction with other home 

and community-based attendant 

services. 

(d) Medical supplies and equipment. 

(e) Home modifications. 

§ 441.530 Setting. 

States must make available attendant 

services and supports in a home or 

community setting, which do not 

include the following: 

(a) A nursing facility. 

(b) An institution for mental diseases. 

(c) An intermediate care facility for 

the mentally retarded. 

(d) Any settings located in a building 

that is also a publicly or privately 

operated facility that provides inpatient 

institutional treatment or custodial care. 

(e) A building on the grounds of or 

immediately adjacent to, a public 

institution or disability-specific housing 

complex, designed expressly around an 

individual’s diagnosis that is 

geographically segregated from the 

larger community, as determined by the 

Secretary. 

§ 441.535 Assessment of need. 

States must conduct a face-to-face 

assessment of the individual’s needs, 

strengths, and preferences in accordance 

with the following: 

(a) States may use one or more 

processes and techniques to obtain 

information about an individual 

including the following: 

(1) Health condition. 

(2) Personal goals and preferences for 

the provision of services. 

(3) Functional limitations. 

(4) Age. 

(5) School. 

(6) Employment. 

(7) Household. 

(8) Other factors that are relevant to 

the need for and authorization and 

provision of services. 

(b) Assessment information supports 

the determination that an individual 

requires the Community First Choice 

Option and also supports the 

development of the person-centered 

service plan and, if applicable, service 

budget. 

(c) The assessment of need must be 

conducted at least every 12 months, as 

needed when the individual’s support 

needs or circumstances change 

significantly necessitating revisions to 

the service plan, or at the request of the 

individual, or the individual’s 

representative, as applicable. 

§ 441.540 Person-centered service plan. 

(a) Person-centered planning process. 

The person-centered planning process 

must include the following criteria: 

(1) Includes people chosen by the 

individual. 

(2) Provides necessary support to 

ensure that the individual has a 

meaningful role in directing the process. 

(3) Occurs at times and locations of 

convenience to the individual. 

(4) Reflects cultural considerations of 

the individual. 

(5) Includes strategies for solving 

conflict or disagreement within the 

process, including clear conflict-ofinterest guidelines for all planning 

participants. 

(6) Offers choices to the individual 

regarding the services and supports they 

receive and from whom. 


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(7) Includes a method for the 

individual to request updates to the 

plan. 

(b) The person-centered plan. The 

person-centered plan must reflect the 

services that are important for the 

individual to meet individual services 

and support needs as assessed through 

a person-centered functional 

assessment, as well as what is important 

to the person with regard to preferences 

for the delivery of such supports. 

Commensurate with the level of need of 

the individual, the plan must include 

the following criteria: 

(1) Reflect the individual’s strengths 

and preferences. 

(2) Reflect clinical and support needs 

as identified through a person-centered 

functional assessment. 

(3) Include individually identified 

goals, which may include, as desired by 

the individual, items related to 

relationships, community participation, 

employment, income and savings, 

health care and wellness, education, 

and others. 

(4) Reflect the services and supports 

(paid and unpaid) that will assist the 

individual to achieve identified goals 

and the providers of those services and 

supports. 

(5) Reflect risk factors and measures 

in place to minimize them, including 

back-up strategies when needed. 

(6) Be signed by all individuals and 

providers responsible for its 

implementation. 

(7) Be understandable to the 

individual receiving services and the 

individuals important in supporting 

him or her. 

(8) Include a timeline for review. 

(9) Identify the individual and/or 

entity responsible for monitoring the 

plan. 

(10) Be distributed to everyone 

involved (including the participant) in 

the plan. 

(11) Be directly integrated into selfdirection where individual budgets are 

used. 

(12) Prevent the provision of 

unnecessary or inappropriate care. 

(c) Requirements of the plan. All of 

the State’s applicable policies and 

procedures associated with the personcentered service plan development must 

be carried out and must include, but are 

not limited to, the following policies 

and procedures: 

(1) Ensure the responsibilities for 

assessment of need and service plan 

development are identified. 

(2) Ensure the planning process is 

timely. 

(3) Ensure the individual’s needs are 

assessed and the services and supports 

meet the individual’s needs. 

(4) Establish conflict of interest 

standards for assessment of need and 

the service plan development process 

that apply to all individuals and 

entities, public or private. At a 

minimum, these standards must ensure 

that the individuals or entities involved 

in the person-centered assessment of 

need and service plan development 

process are not: 

(i) Related by blood or marriage to the 

individual, or to any paid caregiver of 

the individual. 

(ii) Financially responsible for the 

individual. 

(iii) Empowered to make financial or 

health-related decisions on behalf of the 

individual. 

(iv) Individuals who would benefit 

financially from the provision of 

assessed needs and services. 

(d) Finalizing the person-centered 

service plan. The service plan must be 

finalized and agreed to in writing by the 

individual or, as appropriate, the 

individual’s representative and a copy 

of the plan must be provided to the 

individual. 

(e) Reviewing the person-centered 

service plan. The service plan must be 

reviewed, and revised upon 

reassessment of need, at least every 12 

months, when the individual’s 

circumstances or needs change 

significantly, and at the request of the 

individual or the individual’s 

representative, as applicable. 

§ 441.545 Service models. 

A State may choose one or more of the 

following as the service delivery model 

to provide self-directed home and 

community-based attendant services 

and supports: 

(a) Agency model. (1) The agency 

model is a delivery method in which the 

services and supports are provided by 

entities under a contract. 

(2) Under the agency model for the 

Community First Choice option, 

individuals maintain the ability to hire 

and fire the providers of their choice for 

the services identified in their personcentered service plan. 

(b) Self-directed model with service 

budget. A self-directed model with a 

service budget is one in which the 

individual has both a service plan and 

service budget based on the personcentered assessment of need. 

(1) Financial management entity. 

States must make available financial 

management services to all individuals 

with a service budget. The financial 

management entity performs functions 

including, but not limited to, the 

following services: 

(i) Collect and process timesheets of 

the individual’s workers. 

(ii) Process payroll, withholding, 

filing, and payment of applicable 

Federal, State and local employment 

related taxes and insurance. 

(iii) Maintain a separate account for 

each individual’s budget. 

(iv) Track and report disbursements 

and balances of each individual’s funds. 

(v) Process and pay invoices for 

services in the service plan. 

(vi) Provide individual periodic 

reports of expenditures and the status of 

the approved service budget. 

(vii) States may perform the functions 

of a financial management entity 

internally or use a vendor organization 

that has the capabilities to perform the 

required tasks in accordance with 

applicable IRS requirements. 

(2) Direct cash. States may disburse 

cash prospectively to individuals selfdirecting their Community First Choice 

Option services and supports and must 

meet the following requirements: 

(i) Ensure compliance with all 

applicable requirements of the Internal 

Revenue Service, including but not 

limited to, retaining required forms and 

payment of FICA, FUTA and State 

unemployment taxes. 

(ii) Permit individuals, or their 

representatives as applicable, using the 

cash option to choose to use the 

financial management entity for some or 

all of the functions described in 

paragraph (b)(1)(ii) of this section. 

(iii) Make available a financial 

management entity to an individual 

who has demonstrated, after additional 

counseling, information, training, or 

assistance that the individual cannot 

effectively manage the cash option 

described in this section. 

(iv) If the cash option is the only 

model offered by the State for 

Community First Choice, the State may 

require an individual to use the 

financial management entity services 

under the cash option, but must provide 

the individual with the conditions 

under which this option would be 

enforced. 

(3) Vouchers. (i) States have the 

option to issue vouchers to individuals 

who self-direct their Community First 

Choice Option services and supports. 

(ii) States that choose to offer the 

vouchers must ensure compliance with 

all applicable requirements of the 

Internal Revenue Service. 

§ 441.550 Service plan requirements for 

self-directed model with service budget. 

An approved self-directed service 

plan conveys authority to the individual 

to perform, at a minimum, the following 

tasks: 

(a) Recruit and hire workers to 

provide self-directed services, including 

specifying worker qualifications. 


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(b) Fire workers. 

(c) Supervise workers in the provision 

of Community First Choice Option 

services and supports. 

(d) Manage workers in the provision 

of Community First Choice Option 

services and supports, which includes 

the following functions: 

(1) Determining worker duties. 

(2) Scheduling workers. 

(3) Training workers in assigned tasks. 

(4) Evaluating workers performance. 

(e) Determining the amount paid for a 

service, support, or item. 

(f) Reviewing and approving provider 

invoices. 

§ 441.555 Support system. 

For the self-directed model with a 

service budget, States must provide, or 

arrange for the provision of, a support 

system that meets all of the following 

conditions: 

(a) Appropriately assesses and 

counsels an individual, or the 

individual’s representative, if 

applicable, before enrollment. 

(b) Provides appropriate information, 

counseling, training, and assistance to 

ensure that an individual is able to 

manage the services and budgets. 

(1) This information must be 

communicated to the individual in a 

manner and language understandable by 

the individual. 

(2) The support activities must 

include at least the following: 

(i) Person-centered planning and how 

it is applied. 

(ii) Range and scope of individual 

choices and options. 

(iii) Process for changing the personcentered service plan and service 

budget. 

(iv) Grievance process. 

(v) Risks and responsibilities of selfdirection. 

(vi) The ability to freely choose from 

available home and community-based 

attendant providers. 

(vii) Individual rights. 

(viii) Reassessment and review 

schedules. 

(ix) Defining goals, needs, and 

preferences. 

(x) Identifying and accessing services, 

supports, and resources. 

(xi) Development of risk management 

agreements. 

(xii) Development of a personalized 

backup plan. 

(xiii) Recognizing and reporting 

critical events. 

(xiv) Information about an advocate or 

advocacy systems available in the State 

and how an individual, or individual’s 

representative, if applicable, can access 

the advocate or advocacy systems. 

§ 441.560 Service budget requirements. 

(a) For the self-directed model with a 

service budget, a service budget must be 

developed and approved by the State 

based on the assessment of need and 

service plan and must include all of the 

following requirements: 

(1) The specific dollar amount an 

individual may use for Community First 

Choice Option services and supports. 

(2) The procedures for informing an 

individual of the amount of the service 

budget before the service plan is 

finalized. 

(3) The procedures for how an 

individual may adjust the budget 

including the following: 

(i) The procedure for an individual to 

freely change the budget. 

(ii) The circumstances, if any, that 

may require prior approval by the State 

before a budget adjustment is made. 

(4) The circumstances, if any, that 

may require a change in the service 

plan. 

(5) The procedures that govern the 

determination of transition costs and 

expenditures, relating to a need in the 

service plan, that increase 

independence or substitute for human 

assistance to the extent that 

expenditures would otherwise be made 

for human assistance. 

(6) The procedures for an individual 

to request a fair hearing under § 441.300 

of this part if an individual’s request for 

a budget adjustment is denied or the 

amount of the budget is reduced. 

(b) The budget methodology set forth 

by the State to determine an 

individual’s service budget amount 

must meet all of the following criteria: 

(1) The State’s method of determining 

the budget allocation is objective and 

evidence based utilizing valid, reliable 

cost data. 

(2) Be applied consistently to 

individuals. 

(3) Be included in the State plan. 

(4) Includes a calculation of the 

expected cost of Community First 

Choice Option services and supports, if 

those services and supports are not selfdirected. 

(5) The State has a process in place 

that describes the following: 

(i) Any limits it places on Community 

First Choice Option services and 

supports, and the basis for the limits. 

(ii) Any adjustments that are allowed 

and the basis for the adjustments. 

(c) The State must have procedures in 

place that will provide safeguards to 

individuals when the budgeted service 

amount is insufficient to meet the 

individual’s needs. 

(d) The State must have a method of 

notifying individuals of the amount of 

any limit that applies to an individual’s 

Community First Choice Option 

services and supports. 

(e) The budget may not restrict access 

to other medically necessary care and 

services furnished under the State plan 

and approved by the State but which are 

not included in the budget. 

(f) The State must have a procedure to 

adjust a budget when a reassessment 

indicates a change in an individual’s 

medical condition, functional status, or 

living situation. 

§ 441.565 Provider qualifications. 

(a) The State must provide assurances 

that necessary safeguards have been 

taken to protect the health and welfare 

of enrollees in the Community First 

Choice State Option, and must define in 

writing adequate qualifications for 

providers in the agency model of 

Community First Choice services and 

supports. 

(b) An individual has the option to 

permit family members, or any other 

individuals, to provide Community First 

Choice attendant services and supports 

identified in the service plan provided 

they meet the qualifications to provide 

the services and supports. 

(c) An individual retains the right to 

train workers in the specific areas of 

attendant care needed by the individual 

and to perform the needed assistance in 

a manner that comports with the 

individual’s personal, cultural, or 

religious preferences. 

(d) An individual retains the right to 

establish additional staff qualifications 

based on the individual’s needs and 

preferences. 

§ 441.570 State assurances. 

A State must assure the following 

requirements are met: 

(a) For the first full fiscal year in 

which the State Plan amendment is 

implemented, a State must maintain, or 

exceed, the level of expenditures for 

services provided under sections 1115, 

1905(a), and 1915, of the Act, or 

otherwise to individuals with 

disabilities or elderly individuals 

attributable to the preceding fiscal year. 

(b) All applicable provisions of the 

Fair Labor Standards Act of 1938. 

(c) All applicable provisions of 

Federal and State laws regarding the 

following: 

(1) Withholding and payment of 

Federal and State income and payroll 

taxes. 

(2) The provision of unemployment 

and workers compensation insurance. 

(3) Maintenance of general liability 

insurance. 

(4) Occupational health and safety. 


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§ 441.575 Development and 

Implementation Council. 

(a) States must establish a 

Development and Implementation 

Council primarily comprised primarily 

of individuals with disabilities, elderly 

individuals, and their representatives. 

(b) States must consult and 

collaborate with the Council when 

developing and implementing a State 

plan amendment to provide home and 

community-based attendant services 

and supports. 

§ 441.580 Data collection. 

A State must provide the following 

information regarding the provision of 

home and community-based attendant 

services and supports under the 

Community First Choice Option for 

each fiscal year for which the services 

and supports are provided: 

(a) The number of individuals who 

are estimated to receive the Community 

First Choice under this State plan 

option during the fiscal year. 

(b) The number of individuals that 

received the services and supports 

during the preceding fiscal year. 

(c) The number of individuals served 

broken down by type of disability, age, 

gender, education level, and 

employment status. 

(d) The specific number of 

individuals who have been previously 

served under sections 1115, 1915(c) and 

(i) of the Act, or the personal care State 

plan option. 

(e) Data regarding how the State 

provides the Community First Choice 

State option and other home and 

community-based services. 

(f) The cost of providing Community 

First Choice State option and other 

home and community-based services 

and supports. 

(g) Data regarding how the State 

provides individuals with disabilities 

who otherwise qualify for institutional 

care under the State plan or under a 

waiver the choice to receive home and 

community-based services in lieu of 

institutional care. 

§ 441.585 Quality assurance system. 

States must establish and maintain a 

comprehensive, continuous quality 

assurance system, detailed in the State 

plan amendment, that includes a quality 

improvement strategy and employs 

measures for program performance and 

quality of care, standards for delivery 

models, mechanisms for discovery and 

remediation, and quality improvements 

proportionate to the benefit and number 

of individuals served. 

(a) Details of the quality assurance 

system. Details of the quality assurance 

system must include the following: 

(1) Program performance measures. 

The States’ quality assurance system 

must be designed to measure and 

provide evidence of program 

performance related to the following: 

(i) Health and welfare. 

(ii) Provider qualifications. 

(iii) Choice of institution or 

community. 

(iv) Choice of services, supports and 

providers. 

(v) Cost of services and supports. 

(2) Quality of care measures. The 

State’s quality assurance system must be 

designed to measure individual 

outcomes associated with the receipt of 

community-based attendant services 

and supports, particularly with respect 

to the health and welfare of recipients 

of this service. These measures must be 

made available to CMS upon request 

and must include a process for the 

mandatory reporting, investigation, and 

resolution of allegations of neglect, 

abuse, or exploitation in connection 

with the provision of community based 

attendant services and supports, as well 

as quality indicators approved or 

prescribed by the Secretary. 

(3) Standards for delivery models. The 

States’ quality assurance system must 

include standards for agency-based and 

other delivery models for training, 

appeals for denials and reconsideration 

procedures on an individual service 

plan. 

(4) Choice and control. The quality 

assurance system will employ methods 

that maximize consumer independence 

and control and will provide 

information about the provisions of 

quality improvement and assurance to 

each individual receiving such services 

and supports. 

(b) Stakeholder feedback. The State 

must elicit and incorporate feedback 

from key stakeholders to improve the 

quality of the community-based 

attendant services and supports benefit. 

(c) Collection and evaluation. The 

State must collect and report on 

monitoring, remediation, and quality 

improvements related to information 

defined in the State’s quality 

improvement strategy. 

§ 441.590 Increased Federal financial 

participation. 

Beginning October 1, 2011, the FMAP 

applicable to the State will be increased 

by 6 percentage points, for the provision 

of the Community First Choice Option 

home and community-based attendant 

services, under an approved State plan 

amendment. 

Authority: (Catalog of Federal Domestic 

Assistance Program No. 93.778, Medical 

Assistance Program) 

Dated: December 1, 2010. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: January 31, 2011. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2011–3946 Filed 2–22–11; 8:45 am] 

BILLING CODE 4120–01–P 


emcdonald on DSK2BSOYB1PROD with PROPOSALS2