Federal Register / Vol. 76, No. 73 / Friday, April 15, 2011 / Proposed Rules 21311 

§ 355.16 How do I determine the quantity 

of extremely hazardous substances present 

for certain forms of solids? 

* * * * * 

(b) Solids in solution. Multiply the 

weight percent of non-reactive solids in 

solution in a particular container by the 

total weight of solution in the container. 

Then multiply by 0.2. 

* * * * * 

3. Section 355.61 is amended by 

adding in alphabetical order the 

definition of ‘‘Solution’’ to read as 

follows: 

§ 355.61 How are key words in this part 

defined? 

* * * * * 

Solution means any aqueous or 

organic solutions, slurries, viscous 

solutions, suspensions, emulsions, or 

pastes. 

* * * * * 

[FR Doc. 2011–9096 Filed 4–14–11; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 441 

[CMS–2296–P] 

RIN 0938–AP61 

Medicaid Program; Home and 

Community-Based Services (HCBS) 

Waivers 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

revise the regulations implementing 

Medicaid home and community-based 

services (HCBS) waivers under section 

1915(c) of the Social Security Act by 

providing States the option to combine 

the existing three waiver targeting 

groups as identified in § 441.301. In 

addition, we are proposing other 

changes to the HCBS waiver provisions 

to convey expectations regarding 

person-centered plans of care, to 

provide characteristics of settings that 

are not home and community-based, to 

clarify the timing of amendments and 

public input requirements when States 

propose modifications to HCBS waiver 

programs and service rates, and to 

describe the additional strategies 

available to CMS to ensure State 

compliance with the statutory 

provisions of section 1915(c) of the Act. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on June 14, 2011. 

ADDRESSES: In commenting, please refer 

to file code CMS–22296–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 instructions under the ‘‘More Search 

Options’’ tab. 

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–2296–P, P.O. Box 8016, Baltimore, 

MD 21244–1850. 

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–2296–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. 

FOR FURTHER INFORMATION CONTACT: 

Kathryn Poisal, (410) 786–5940. 

SUPPLEMENTARY INFORMATION: 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 

Section 1915(c) of the Social Security 

Act (the Act) authorizes the Secretary of 

Health and Human Services to waive 

certain Medicaid statutory requirements 

so that a State may offer Home and 

Community-Based Services (HCBS) to 

State-specified group(s) of Medicaid 

beneficiaries who otherwise would 

require services at an institutional level 

of care. This provision was added to the 

Act by the Omnibus Budget and 

Reconciliation Act of 1981 (Pub. L. 97– 

35, enacted August 13, 1981) (OBRA’81) 

(with a number of subsequent 

amendments). Regulations were 

published to effectuate this statutory 

provision, with final regulations issued 

on July 25, 1994 (59 FR 37719). In the 

June 22, 2009 Federal Register (74 FR 

29453), we published the Medicaid 

Program; Home and Community-Based 

Services (HCBS) advance notice of 

proposed rulemaking (ANPRM) that 

proposed to initiate rulemaking on a 

number of areas within the section 

1915(c) program. We received 313 

comments (which can be accessed at 

http://www.regulations.gov/) and held 

teleconferences with stakeholders. The 

correspondence included comments 

from States, health care and community 

support providers and associations, 

consumer groups, and social workers, 

and others. In the following sections, we 

discuss comments relating to questions 


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1Although this terminology is still used in the 

statute and regulations, it is not consistent with the 

preferred language to describe target groups. In the 

spirit of Rosa’s Law [Pub. L. 111–256], CMS will 

use the term, ‘‘individuals with intellectual 

disabilities’’ instead of ‘‘mentally retarded or 

developmentally disabled’’ where possible. 

posed by the ANPRM and addressed in 

this proposed rule. 

Along with our overarching interest in 

making improvements to the Medicaid 

HCBS program, we seek to ensure that 

Medicaid is providing needed strategies 

for States in their efforts to meet their 

obligations under the Americans with 

Disabilities Act (ADA) and Supreme 

Court’s decision in Olmstead v. L.C., 

527 U.S. 581 (1999). In the Olmstead 

decision, the Court affirmed a State’s 

obligations to serve individuals in the 

most integrated setting appropriate to 

their needs. A State’s obligations under 

the ADA and section 504 of the 

Rehabilitation Act are not defined by, or 

limited to, the scope or requirements of 

the Medicaid program; however, the 

Medicaid program provides an 

opportunity to obtain partial Federal 

funding to assist in compliance with 

these laws through the provision of 

Medicaid services to Medicaid-eligible 

individuals. 

We believe that these proposed 

changes will have numerous benefits for 

individuals and States alike. In addition 

to providing clarity around individual 

and stakeholder input, these proposed 

changes will move the system forward 

by enabling services to be planned and 

delivered in a manner driven by 

individual needs rather than diagnosis. 

These changes will enable States to 

realize administrative and program 

design simplification, as well as 

improve efficiency of operation. The 

changes related to clarification of HCBS 

settings will support the use of waiver 

authority to maximize the opportunities 

for waiver participants to have access to 

the benefits of community living and 

the opportunity to receive services in 

the most integrated setting appropriate. 

A. Responses to Comments Received on 

ANPRM 

1. Target Groups 

Under section 1915(c) of the Act, the 

Secretary is authorized to waive section 

1902(a)(10)(B) of the Act, allowing 

States not to apply comparability 

requirements and target an HCBS waiver 

program to a specified Medicaid-eligible 

group or sub-group of individuals who 

would otherwise require institutional 

care. A single section 1915(c) waiver 

may, under current regulation, serve one 

of the three target groups identified in 

§ 441.301(b)(6). As provided in the rule, 

these three target groups are: ‘‘Aged or 

disabled, or both; Mentally retarded or 

developmentally disabled, or both; and 

Mentally ill.1’’ States must currently 

develop separate section 1915(c) 

waivers in order to serve more than one 

of the specified target groups. A Federal 

regulatory change that permits 

combining targeted groups within one 

waiver would remove a barrier for States 

that wish to design a waiver that meets 

the needs of more than one target 

population. This regulatory change 

would enable States to design programs 

to meet the needs of Medicaid-eligible 

individuals. For example, a growing 

number of Medicaid-eligible individuals 

with intellectual disabilities reside with 

aging caregivers who are also eligible for 

Medicaid. The proposed change would 

enable the State to design a coordinated 

section 1915(c) waiver structure that 

meets the needs of the entire family 

that, in this example, includes both an 

aging parent and a person with 

intellectual disabilities. In this 

illustration, the family would occupy 

two waiver slots, but with the proposed 

change, both could now be served under 

the same waiver program. We also 

believe the capacity to combine 

multiple target groups in one waiver 

may offer some administrative 

efficiencies for States. 

Through the ANPRM, we proposed to 

initiate rulemaking to allow States the 

flexibility to combine any or all of the 

three target groups in one HCBS waiver 

(74 FR 29453). We sought public 

comments on how we may establish 

criteria related to the removal of an 

existing regulatory barrier that currently 

prevents States from designing crossdisability section 1915(c) HCBS waiver 

programs. The comments provided on 

this provision were largely positive, 

advising CMS to consider carefully 

quality elements and protections needed 

to ensure that all target groups are 

protected sufficiently in such a 

structure. Through this proposed rule, 

we include expectations that each 

individual within the waiver, regardless 

of target group, has equal access to the 

services necessary to meet their unique 

needs. 

2. HCBS Settings 

Through the ANPRM, we also sought 

public input on strategies to define 

home and community-based settings 

where waiver participants may receive 

services. Additionally, the request for 

input was in response to isolated 

situations that have emerged where 

States or other stakeholders are 

expressing interest in using HCBS 

waivers to serve individuals in 

segregated settings or settings with a 

strong institutional nature. For example, 

some proposed settings are on campuses 

of institutional facilities, segregated 

from the larger community, and do not 

allow individuals to choose whether or 

with whom they share a room, limit 

individuals’ freedom of choice on daily 

living experiences such as meals, 

visitors, activities, and limit 

individuals’ opportunities to pursue 

community activities. 

We received several comments to the 

ANPRM strongly urging CMS to clarify 

in regulations that HCBS funding is not 

intended to be used for people in 

segregated facilities. One comment 

referenced large, campus-based 

programs and stated ‘‘[s]uch settings 

clearly do not meet the basic 

understanding of home and communitybased settings.’’ Another comment, 

expressing concern about segregated, 

residential campuses, added, ‘‘that 

HCBS funding is not intended to be 

used for these segregated facilities.’’ 

More recently, we received a 

significant amount of correspondence 

from stakeholders across the country in 

response to a specific State proposal 

contemplating a campus-based, 

segregated setting for HCBS. One 

correspondent wrote ‘‘* * * congregate 

settings are being planned on the 

grounds of existing Intermediate Care 

Facilities for Individuals with Mental 

Retardation (ICF/MRs) or in other 

segregated settings in several States, 

with the intent of using Home and 

Community-Based (Services) Waiver 

(HCBW) funding. This type of effort is 

incompatible with the goals * * * as 

defined by CMS. Both ADA and 

Olmstead require that services are 

provided in the most integrated settings 

appropriate to an individual’s needs.’’ 

Another writer expressed the following 

concern: ‘‘[My son] is very well known 

in the community and we know he is 

much safer in the community than in an 

institution. There are simply more eyes 

and ears in the community who would 

certainly telephone us if they even 

suspected abuse of any kind. The 

success of my son, and my desired 

success for those 5000 people * * * 

with developmental disabilities who are 

desperately waiting for services, is my 

motivation to oppose the use of the 

HCBW for a cluster of large group 

homes on a campus. They simply will 

not have the opportunities for growth as 

human beings * * *.’’ 

As a result of the significant 

comments we received and the 

subsequent feedback through 

correspondence and other stakeholder 

input opportunities, we propose that 

HCBS settings: must be integrated in the 


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community; must not be located in a 

building that is also a publicly or 

privately operated facility that provides 

institutional treatment or custodial care; 

must not be located in a building on the 

grounds of, or immediately adjacent to, 

a public institution; or, must not be a 

housing complex designed expressly 

around an individual’s diagnosis or 

disability, as determined by the 

Secretary. In addition, we propose that 

the settings must not have qualities of 

an institution, as determined by the 

Secretary. Such qualities may include 

regimented meal and sleep times, 

limitations on visitors, lack of privacy 

and other attributes that limit 

individual’s ability to engage freely in 

the community. We invite comments on 

this portion of the regulations. 

Through the ANPRM, we received 

comments suggesting that we carefully 

consider any adverse impact that a rule 

change may have on American Indians 

and Alaska Natives who reside on Tribal 

lands where living settings may differ 

according to cultural norms. To that 

end, we were advised to be careful that 

the language of a regulation does not 

unintentionally prohibit normative 

cultural living practices. We note that 

this proposed rule change does not 

exclude from home and communitybased settings culturally appropriate 

settings on Tribal lands when the 

individual is an Indian or resides on 

Tribal lands where culturally acceptable 

group living arrangements are an 

integral aspect of the Tribal community. 

Specifically, Indian means any 

individual defined at 25 U.S.C. 1601(c), 

1603(f), or 1679(b), or who has been 

determined eligible as an Indian, under 

42 CFR 136.12. This means the 

individual: 

(1) Is a member of a Federallyrecognized Indian Tribe; 

(2) Resides in an urban center and 

meets one or more of the four criteria: 

(a) Is a member of a Tribe, band, or 

other organized group of Indians, 

including those Tribes, bands, or groups 

terminated since 1940 and those 

recognized now or in the future by the 

State in which they reside, or who is a 

descendant, in the first or second 

degree, of any such member; 

(b) Is an Eskimo or Aleut or other 

Alaska Native; 

(c) Is considered by the Secretary of 

the Interior to be an Indian for any 

purpose; or 

(d) Is determined to be an Indian 

under regulations promulgated by the 

Secretary. 

(3) Is considered by the Secretary of 

the Interior to be an Indian for any 

purpose; or 

(4) Is considered by the Secretary of 

Health and Human Services to be an 

Indian for purposes of eligibility for 

Indian health care services, including as 

a California Indian, Eskimo, Aleut, or 

other Alaska Native. 

The comments noted that persons 

who are older with and without 

disabilities may choose to live together 

in assisted living facilities and urged 

CMS to allow them to exercise this 

preference and receive waiver services. 

Similarly, some persons who are older 

may desire to live in retirement 

communities, such as continuing care 

retirement communities. As a result, in 

accordance with a person-centered plan, 

we will allow such settings to be 

permissible under the section 1915(c) 

HCBS program for older persons under 

certain circumstances, which are noted 

below. 

However, as previously noted, the 

Medicaid program’s rules do not define 

or limit other obligations States may 

have under the ADA and section 504 of 

the Rehabilitation Act for individuals 

who seek more integrated settings than 

assisted living settings (ALS) or other 

settings not covered by this regulation. 

For the purposes of this regulation, 

we note that ALS for persons who are 

older, without regard to disability, 

would not be excluded from home and 

community-based settings when the 

following conditions are met: 

• Individual has a lease. 

• Setting is an apartment with 

individual living, sleeping, bathing and 

cooking areas, and individuals can 

choose whether to share a living 

arrangement and with whom. 

• Individuals have lockable access to 

and egress from their own apartments. 

• Individuals are free to receive 

visitors and leave the setting at times 

and for durations of their own choosing. 

• Aging in place, or allowing 

individuals to remain where they live as 

they age and/or support needs change, 

must be a common practice of the ALS. 

• Leases may not reserve the right to 

assign apartments or change apartment 

assignments. 

• Access to the greater community is 

easily facilitated based on the 

individual’s needs and preferences. 

• An individual’s compliance with 

their person-centered plan (in the event 

that the individual has shared his/her 

plan or the landlord is also the provider 

of services) is not in and of itself a 

condition of the lease. 

We are particularly interested in 

gaining comments on these aspects of 

the proposed rule. In addition, we note 

that this proposal in no way preempts 

broad Medicaid requirements, such as 

an individual’s right to obtain services 

from any willing and qualified provider 

of a service. 

Recognizing the imperative to provide 

clear guidance to States and in 

consideration of recent proposals that 

have clearly exceeded reasonable 

standards for HCBS, we are proposing to 

clarify now that certain settings are not 

home and community-based because 

they are not integrated in the 

community. A setting that is integrated 

in the community is a setting that 

enables individuals with disabilities to 

interact with individuals without 

disabilities to the fullest extent possible. 

Further, we believe that such settings do 

not preclude individuals’ ability to 

access community activities at times, 

frequencies and with persons of their 

choosing. Such settings are not 

segregated based on disability, either 

physically or because of setting 

characteristics, from the larger 

community. In addition, such settings 

will afford individuals choice in their 

daily life activities, such as eating, 

bathing, sleeping, visiting and other 

typical daily activities. We will 

continue our dialogue with a wide 

variety of stakeholders on other issues 

related to the characteristics of HCBS 

settings. 

3. Person-Centered Planning 

Underpinning all aspects of 

successful HCBS is the importance of a 

complete and inclusive person-centered 

planning process that addresses health 

and long-term services and support 

needs in a manner that reflects 

individual preferences. To fully meet 

individual needs and ensure meaningful 

access to their surrounding community, 

systems that deliver HCBS must be 

based upon a strong foundation of 

person-centered planning and 

approaches to service delivery. Through 

the ANPRM process, we received 

favorable comments regarding our 

interest in ensuring a person-centered 

approach to services and support plan 

development, with recommendations 

that we articulate expectations for such 

an approach. 

The person-centered approach is a 

process, directed by the individual with 

long-term support needs, and may also 

include a representative whom the 

individual has freely chosen. The 

person-centered plan shall identify the 

strengths, preferences, needs (clinical 

and support), and desired outcomes of 

the individual. The person-centered 

process enables the individual to choose 

others to serve as important contributors 

and members of the team in the 

planning process. 

These participants in the personcentered planning process enable and 


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assist the individual to identify and 

access a personalized mix of paid and 

non-paid services. This process and the 

resulting service and support plan, also 

called a plan of care, will assist the 

individual in achieving personally 

defined outcomes in the most integrated 

community setting. The process is 

conducted in a manner that reflects 

what is important for the individual to 

meet identified clinical and support 

needs determined through a personcentered functional needs assessment 

process and what is important to the 

individual to ensure delivery of services 

in a manner that reflects personal 

preferences and choices and contributes 

to the assurance of health and welfare. 

The person-centered plan may also 

reflect whether and what services an 

individual may choose to self-direct. 

The plan should act as the basis for the 

building of an individual’s budget, and 

the individual’s ability to make 

decisions regarding the resources 

available to him or her. In collaboration 

with those that the individual has 

identified, he or she chooses planning 

goals to achieve these personal 

outcomes and to meet personal clinical 

and support needs. 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. 

In addition to being driven by the 

individual receiving services, 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 strategies to address 

any conflict of interest concerns among 

planning participants; 

• Include opportunities for periodic 

and ongoing plan updates as needed 

and/or requested by the individual; and, 

• Offer choices to the individual 

regarding the services and supports they 

receive and from whom. 

The plan resulting from this process 

should reflect the individual strengths 

and preferences, as well as clinical and 

support needs (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. 

The plan must be signed by all 

individuals and providers responsible 

for its implementation, and should 

reflect the approach in place to ensure 

that it is implemented as intended. A 

copy of the plan must be provided to the 

individual and their representative(s). 

We invite comment on the personcentered process and planning elements 

of this proposed rule. 

4. Summary 

It is in this context and with the 

valuable input from the ANPRM that we 

propose modifications and additions to 

the regulations governing section 

1915(c) HCBS waiver programs. We 

further seek to use this opportunity to 

clarify expectations regarding timing of 

amendments and public input 

requirements when States propose 

modifications to HCBS waiver programs 

and service rates, and strategies 

available to CMS to ensure State 

compliance with the statutory 

assurances of section 1915(c) of the Act. 

B. Strategies To Ensure Compliance 

With Statutory Assurances 

Our primary concern in the oversight 

of the section 1915(c) waivers is the 

health and welfare of the individuals 

served within the programs. Section 

1915(f) of the Act requires the Secretary 

to monitor implementation of waivers to 

assure compliance with all requirements 

and provides for termination of waivers 

where the Secretary has found 

noncompliance. This authority and the 

process for termination of waivers is 

currently addressed in the regulations at 

§ 441.304(d), § 441.307, and § 441.308. 

We seek to add provisions describing 

other strategies CMS may employ only 

after all other efforts have not yielded 

necessary results, to ensure compliance, 

short of termination or nonrenewal. At 

present, when we identify serious 

quality issues, such as potential harm to 

individual health and welfare or 

significant financial concerns, and 

States fail to take appropriate remedial 

action, the only enforcement options 

addressed in the regulations are for CMS 

to refuse to renew the waiver or 

terminate the waiver, as described at 

current § 441.304(d). Such action could 

have a significant detrimental impact on 

the individuals served (for example, loss 

of waiver services or Medicaid 

eligibility). We are interested in 

specifying a broader array of approaches 

CMS may take to achieve and maintain 

full State compliance with the 

requirements specified in or under 

section 1915(c) of the Act in addition to 

waiver termination. We invite comment 

on the discussion of compliance 

strategies in this proposed rule. 

CMS issues these proposed rules to 

address issues that are pressing in the 

design, operation, and oversight of the 

section 1915(c) waiver program. 

However, we are committed to 

continuing a dialogue with all interested 

stakeholders on issues related to 

designing services and supports that 

meet individual needs, and that offer 

meaningful community participation 

opportunities. 

II. Provisions of the Proposed 

Regulations 

The provisions of this proposed rule 

would apply to all States offering 

Medicaid HCBS waivers under section 

1915(c) of the Act. 

As noted above, our ANPRM 

encompassed three main areas: Removal 

of regulatory barriers to serve more than 

one target group in a single waiver; 

definition of home and community 

characteristics; and, underpinning each 

of those areas, requirements for personcentered planning. Comments were 

supportive of our interest in setting 

forth our expectations regarding personcentered service and support plans that 

reflect what is important for the 

individual and to the individual. The 

proposed revisions to § 441.301(b)(1)(i) 

would require that a written services 

and support plan be based on the 

person-centered approach. This 

provision includes minimum 

requirements for this approach. 

In new paragraph, § 441.301(b)(1)(iv), 

we would include clarifying language 

regarding settings that would not be 

considered home and community-based 

under section 1915(c) of the Act. We 

clarify that HCBS settings are integrated 

in the community and may not include: 

facilities located in a building that is 

also a publicly or privately-operated 

facility that provides inpatient 

institutional treatment or custodial care; 

or in a building on the grounds of, or 

immediately adjacent to, a public or 

private institution; or a disabilityspecific housing complex designed 

expressly around an individual’s 

diagnosis, that is segregated from the 

larger community, as determined by the 

Secretary. 

We note that this proposed rule 

change does not exclude living settings 

on Tribal lands that reflect cultural 

norms, or ALS for persons who are older 


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regardless of disability, when the 

conditions noted above in the 

background section are met. 

The proposed revisions to 

§ 441.301(b)(6) would allow States to 

combine target groups. We recognize 

that some States and stakeholders want 

additional flexibility to combine target 

groups in order to provide services 

based upon needs rather than diagnosis 

or condition, and for administrative 

relief from operating and managing 

multiple section 1915(c) waiver 

programs. Under this proposal, States 

must still determine that without the 

waiver, participants would require 

institutional level of care, in accordance 

with section 1915(c) of the Act. The 

proposal will not affect the cost 

neutrality requirement for section 

1915(c) waivers, which requires the 

State to assure that the average per 

capita expenditure under the waiver for 

each waiver year not exceed 100 percent 

of the average per capita expenditures 

that would have been made during the 

same year for the level of care provided 

in a hospital, nursing facility, or ICF/MR 

under the State plan had the waiver not 

been granted. We will provide States 

with guidance on how to demonstrate 

cost neutrality for a waiver serving 

multiple target groups. 

In an effort to ensure that safeguards 

are in place to protect the health and 

welfare of each waiver participant, we 

are proposing in a new paragraph 

§ 441.302(a)(4) that to choose the option 

of more than one target group under a 

single waiver, States must assure CMS 

that they are able to meet the unique 

service needs that each individual may 

have regardless of target group, and that 

each individual in the waiver has equal 

access to all needed services. In 

addition, to ensure that services are 

provided in settings that are home and 

community-based, we are proposing in 

a new paragraph § 441.302(a)(5) that 

States provide assurance that the 

settings where services are provided are 

home and community based, and 

comport with new paragraph 

§ 441.301(b)(1)(iv). While we are not 

changing the existing quality assurances 

through this rule, we are proposing to 

clarify that States must continue to 

assure health and welfare of all 

participants when target groups are 

combined under one waiver, and assure 

that they have the mechanisms in place 

to demonstrate compliance with that 

assurance. 

At § 441.304, we would make minor 

revisions to the heading to indicate the 

rules addressed under this section. 

We are proposing to revise 

§ 441.304(d) and redesignate current 

§ 441.304(d) as new § 441.304(g). The 

new § 441.304(d) would codify and 

clarify our guidance (Application for a 

section 1915(c) Home and CommunityBased Waiver, V. 3.5, Instructions, 

Technical Guide and Review Criteria, 

January 2008) regarding the effective 

dates of waiver amendments with 

substantive changes, as determined by 

CMS. Substantive changes may include, 

but are not limited to changes in eligible 

populations, constriction of service 

amount, duration, or scope, or other 

modifications as determined by the 

Secretary. We would add regulatory 

language reflective of our guidance that 

waiver amendments with changes that 

we determine to be substantive may 

only take effect on or after the date 

when the amendment is approved by 

CMS, and must be accompanied by 

information on how the State has 

assured smooth transitions and minimal 

adverse impact on individuals impacted 

by the change. 

Additionally, given the important 

requirement at § 447.205, which 

describes States’ responsibilities to 

provide public notice when States 

propose significant changes to their 

methods and standards for setting 

payment rates for services, we propose 

to add a new paragraph § 441.304(e) to 

remind States of their obligations under 

§ 447.205. We would further include a 

requirement at a new proposed 

paragraph § 441.304(f) that States 

establish public input processes 

specifically for HCBS changes. These 

processes, commensurate with the 

proposed change, could include 

formalized information dissemination 

approaches, conducting focus groups 

with affected parties, and establishing a 

standing advisory group to assist in 

waiver policy development. These 

processes must be identified expressly 

within the waiver document and 

utilized for waiver policy development. 

The input process must be accessible to 

the public (including individuals with 

disabilities) and States must make 

significant efforts to ensure that those 

who want to participate in the process 

are able to do so. These processes must 

include consultation with Federallyrecognized Indian Tribes in accordance 

with Federal requirements and the State 

must seek advice from Indian health 

programs or Urban Indian Organizations 

prior to submission of a waiver request, 

renewal, amendment or action that 

would have a direct effect on Indians or 

Indian health providers or Urban Indian 

Organizations in accordance with 

section 5006(e) of the American 

Recovery and Reinvestment Act of 2009 

(Pub. L. 111–5, enacted on February 17, 

2009). We would be interested in 

comments on this proposed addition to 

strengthen the public input process on 

changes proposed to services and other 

changes to the structure and operation 

of the section 1915(c) waivers. 

In new paragraph, § 441.304(g), we 

propose to add language describing 

additional strategies CMS may employ 

to ensure State compliance with the 

requirements of a waiver, short of 

termination or non-renewal. Our 

proposed regulation at the new 

§ 441.304(g) reflects an approach to 

encourage State compliance. We are 

interested in working with States to 

achieve full compliance without having 

to resort to termination of a waiver. 

Therefore, we are proposing strategies to 

ensure compliance in serious situations 

short of termination. These strategies 

include use of a moratorium on waiver 

enrollments or withholding of a portion 

of Federal payment for waiver services 

or for administration of waiver services 

in accordance with the seriousness and 

nature of the State’s noncompliance 

(that is, health and welfare concerns and 

significant financial issues). These 

strategies could continue, if necessary, 

as the Secretary determines whether 

termination is warranted. Our primary 

objective is to use such strategies rarely, 

only after other efforts to resolve issues 

have not succeeded as necessary to 

ensure the health and welfare of 

individuals served. 

Once CMS employs a strategy to 

ensure compliance, the State must 

submit an acceptable corrective action 

plan in order to resolve all areas of 

noncompliance. The corrective action 

plan must include detail on the actions 

and timeframe the State will take to 

correct each area of noncompliance, 

including necessary changes to the 

quality improvement strategy and a 

detailed timeline for the completion and 

implementation of corrective actions. 

CMS will determine if the corrective 

action plan is acceptable. 

Selecting Strategies To Ensure 

Compliance 

In consideration of whether and 

which strategies will be used to ensure 

compliance, and in accordance with the 

seriousness and nature of the State’s 

noncompliance (that is, health and 

welfare concerns and significant 

financial issues), we will consider such 

areas as the following: 

• The areas of noncompliance and 

whether they pose immediate concerns 

or otherwise compromise the State’s 

ability to assure participant’s health and 

welfare. 

• The nature and duration of the 

identified area of serious 

noncompliance. 


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21316 Federal Register / Vol. 76, No. 73 / Friday, April 15, 2011 / Proposed Rules 

• The State’s history of 

noncompliance in general, and 

specifically with reference to the cited 

area of serious noncompliance. 

• The significance of the deficiencies 

and whether they indicate a systemwide failure to provide quality services. 

III. Collection of Information 

Requirements 

This proposed rule does not contain 

any new information collection 

requirements; however, it does make 

reference to information collection 

requirements currently approved by 

OMB. Specifically, the burden 

associated with the information 

collection requirements contained in 

this proposed rule (HCBS Waivers) is 

currently approved under OMB control 

number 0938–0499 with a July 31, 2012, 

expiration date. 

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–2296–P] Fax: (202) 395–6974; or 

E-mail: OIRA_submission@omb.eop.gov. 

IV. Regulatory Impact Statement 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), 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 (March 

22, 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). This rule does not reach 

the economic threshold and thus is not 

considered a major rule. 

The RFA requires agencies to analyze 

options for regulatory relief for 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 providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $7.0 million to $34.5 million in any 

1 year. 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 economic 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 for 

Medicare payment regulations and has 

fewer than 100 beds. We are not 

preparing an analysis for section 1102(b) 

of the Act because we have determined, 

and the Secretary certifies, that this 

proposed rule would 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 also 

requires that agencies assess 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. This rule will have no 

consequential effect on State, local, or 

Tribal governments or on the private 

sector. 

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. 

Since this regulation does not impose 

any costs on State or local governments, 

the requirements of Executive Order 

13132 are not applicable. 

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 and Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services would amend 42 CFR 

chapter IV as set forth below: 

PART 441—SERVICES: 

REQUIREMENTS AND LIMITS 

APPLICABLE TO SPECIFIC SERVICES 

1. The authority citation continues to 

read as follows: 

Authority: Sec. 1102 of the Social Security 

Act (42 U.S.C. 1302). 

Subpart G—Home and CommunityBased Services: Waiver Requirements 

2. Section 441.301 is amended by— 

A. Revising paragraphs (b)(1)(i) and 

(b)(6). 

B. Adding new paragraph (b)(1)(iv). 

The revisions and addition read as 

follows: 

§ 441.301 Contents of request for a waiver. 

* * * * * 

(b) * * * 

(1) * * * 

(i) Under a written services and 

support plan (also called plan of care) 

that is based on a person-centered 

approach and is subject to approval by 

the Medicaid agency. 

(A) Person-Centered Planning Process. 

In addition to being led by the 

individual receiving services, the 

person-centered planning process: 

(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 any conflict of 

interest concerns. 

(6) Offers choices to the individual 

regarding the services and supports they 

receive and from whom. 

(7) Includes a method for the 

individual to request updates to the 

plan as needed. 

(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: 

(1) Reflect the individual’s strengths 

and preferences. 


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(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 living, 

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. 

* * * * * 

(iv) Only in settings that are home and 

community based, integrated in the 

community, provide meaningful access 

to the community and community 

activities, and choice about providers, 

individuals with whom to interact, and 

daily life activities. A setting is not 

integrated in the community if it is: 

(A) Located in a building that is also 

a publicly or privately operated facility 

that provides inpatient institutional 

treatment or custodial care; in a 

building on the grounds of, or 

immediately adjacent to, a public 

institution; or a housing complex 

designed expressly around an 

individual’s diagnosis or disability, as 

determined by the Secretary; or 

(B) Has qualities of an institutional 

setting, as determined by the Secretary. 

* * * * * 

(6) Be limited to one or more of the 

following target groups or any subgroup 

thereof that the State may define: 

(i) Aged or disabled, or both. 

(ii) Individuals with Intellectual or 

Developmental Disabilities, or both. 

(iii) Mentally ill. 

3. Section 441.302 is amended by 

adding paragraphs (a)(4) and (a)(5) to 

read as follows: 

§ 441.302 State Assurances. 

* * * * * 

(a) * * * 

(4) Assurance that the State is able to 

meet the unique service needs that 

particular target groups may present 

when the State selects to serve more 

than one target group under a single 

waiver, as specified in § 441.301(b)(6) of 

this subpart. 

(5) Assurance that services are 

provided in home and community based 

settings, as specified in 

§ 441.301(b)(1)(iv) of this subpart. 

* * * * * 

4. Section 441.304 is amended by— 

A. Revising the section heading as set 

forth below. 

B. Redesignating paragraph (d) as new 

paragraph (g). 

C. Adding new paragraphs (d), (e), 

and (f). 

D. Revising newly designated 

paragraph (g). 

The additions and revisions read as 

follows: 

§ 441.304 Duration, extension, and 

amendment of a waiver. 

* * * * * 

(d) The agency may request that 

waiver modifications be made effective 

retroactive to the first day of a waiver 

year, or another date after the first day 

of a waiver year, in which the 

amendment is submitted, unless the 

amendment involves substantive 

changes as determined by CMS. 

(1) Substantive changes may include, 

but are not limited to, revisions to 

services available under the waiver 

including elimination or reduction in 

services, and changes in the scope, 

amount, and duration of the services. 

Substantive changes may also include a 

change in the qualifications of service 

providers, changes in rate methodology 

or a change in the eligible population. 

(2) A request for an amendment that 

involves a substantive change as 

determined by CMS, may only take 

effect on or after the date when the 

amendment is approved by CMS, and 

must be accompanied by information on 

how the State has assured smooth 

transitions and minimal adverse impact 

on individuals impacted by the change. 

(e) The agency must provide public 

notice of any significant proposed 

change in its methods and standards for 

setting payment rates for services in 

accordance with § 447.205 of this 

chapter. 

(f) The agency must establish and use 

a public input process, for any changes 

in the services or operations of the 

waiver. 

(1) This process must be described 

fully in the State’s approved waiver 

application and be sufficient in light of 

the scope of the changes proposed, to 

ensure meaningful opportunities for 

input for individuals served, or eligible 

to be served, in the waiver. 

(2) This process must include 

consultation with Federally recognized 

Tribes, and in accordance with section 

5006(e) of the American Recovery and 

Reinvestment Act of 2009 (Pub. L. 111– 

5), Indian health programs and Urban 

Indian Organizations. 

(g)(1) If CMS finds that the Medicaid 

agency is not meeting one or more of the 

requirements for a waiver contained in 

this subpart, the agency is given a notice 

of CMS’ findings and an opportunity for 

a hearing to rebut the findings. 

(2) If CMS determines that the agency 

is substantively out of compliance with 

this subpart after the notice and any 

hearing, CMS may employ strategies to 

ensure compliance as described in 

§ 441.304(g)(1) of this paragraph or 

terminate the waiver. 

(3)(i) Strategies to ensure compliance 

may include the imposition of a 

moratorium on waiver enrollments, 

other corrective strategies as appropriate 

to ensure the health and welfare of 

waiver participants, or the withholding 

of a portion of Federal payment for 

waiver services until such time that 

compliance is achieved, or, ultimately, 

termination. When a waiver is 

terminated, the State must comport with 

§ 441.307 of this subpart. 

(ii) CMS will provide States with a 

written notice of the impending 

strategies to ensure compliance for a 

waiver program. The notice of CMS’ 

intent to utilize strategies to ensure 

compliance would include the nature of 

the noncompliance, the strategy to be 

employed, the effective date of the 

compliance strategy, the criteria for 

removing the compliance strategy and 

the opportunity for a hearing. 

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 28, 2011. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2011–9116 Filed 4–14–11; 8:45 am] 

BILLING CODE 4120–01–P 


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