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Medicaid Home and Community-Based 

Services Settings Regulation: Fitting 

the Pieces Together

February 21, 2023

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Objectives

 Review the various activities states have undertaken to implement 

the Medicaid home and community-based services (HCBS) final 

settings rule

 Discuss the purpose, lifespan, and next steps regarding Medicaid 

HCBS settings rule implementation tools, including Statewide 

Transition Plans (STPs), Heightened Scrutiny, and Corrective Action 

Plans (CAPs)

 Identify Medicaid 1915(c) waiver and 1915(i) and 1915(k) state plan 

provisions for ongoing monitoring
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HCBS Settings Rule Implementation Tools

HCBS 

Settings 

Rule 

Compliance

STPs

Heightened 

Scrutiny

January 1 

Submission

CAPs
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Purpose, Lifespan, and Next Steps for 

HCBS Settings Rule Implementation 

Tools
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Statewide Transition Plans

 Purpose

–Provide a roadmap of how a state will determine compliance with 

the HCBS settings regulatory criteria at both state and provider 

levels

–Includes actions, milestones, and associated timeframes

 Lifespan

–Approval dates are state-specific

–Automatically expires on March 17, 2023, the end of the 

regulation’s transition period

 What Comes Next?

–States must either be in compliance with all regulatory settings 

criteria, or have requested a Corrective Action Plan from CMS
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Heightened Scrutiny

 Purpose

– Provide an opportunity for presumptively institutional settings to continue receiving 

federal funding for HCBS, if the state and CMS affirm that the setting adheres to all 

regulatory settings criteria

 Lifespan

– CMS confirmation that the setting overcomes its institutional presumption stands. If 

the state receives information that a provider has altered its operations to no longer 

comply with regulatory criteria, or there is a need to assess a newly constructed 

presumptively institutional setting in the state, the state may contact CMS to 

determine next steps

 What Comes Next?

– Federal funding for HCBS is permitted for services received by individuals in 

presumptively institutional settings affirmed by the state and CMS to meet 

regulatory criteria. Federal funding is not available for HCBS rendered to 

individuals in a setting that does not overcome its institutional presumption. States 

should continue to monitor existing and newly constructed settings
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January 1 Submission

 Purpose

–Provide information to CMS and stakeholders on how regulatory 

settings criteria have been incorporated into state-level oversight and 

enforcement and how providers have been assessed for regulatory 

compliance, and provide a point of contact for beneficiaries to report 

concerns about provider compliance

 Lifespan

–One-time request for this information. If a state makes different or 

additional opportunities available for beneficiaries to discuss provider 

concerns, transparency to stakeholders is strongly encouraged

 What Comes Next?

–CMS will post this information online on Medicaid.gov/hcbs
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Corrective Action Plans (CAPs)

 Purpose

–Authorize additional opportunities beyond the regulation’s transition 

period for a state to reach compliance with the provisions articulated 

in each approved CAP

 Lifespan

–All CAPs will be approved effective March 17, 2023; in some cases, 

CAPs will receive approval after this date, retroactive to March 17

–State-specific or provision-specific expiration dates will be noted in 

each approved CAP

 What Comes Next?

–States must be compliant with all HCBS settings regulatory criteria, 

at both state and setting levels
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What if a State Doesn’t Have a CAP?

 States not requesting a CAP from CMS are indicating that all of the following 

statements are true, effective March 17, 2023:

– All actions necessary to ensure state-level compliance with the regulatory 

settings criteria have been completed (or, in the case of modifications to state 

law or regulation, are underway)

– All settings where HCBS are provided across the state, including 

presumptively institutional settings, have been assessed against the settings 

criteria and needed remediation has been completed

– All presumptively institutional settings have been submitted to CMS for a 

sampled review, and have received concurrence from CMS that the settings 

adhere to regulatory criteria

– If a heightened scrutiny site visit by CMS has occurred, or will be occurring in 

2023, responses to the findings of that site visit have been submitted to CMS 

 If any of the above statements are found to be inaccurate, states are at risk for 

CMS initiating compliance actions, including the withholding of federal funding 
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What Happens When a CAP Expires?

 Upon expiration of a CAP, all of the statements on the 

previous slide must be true

 If any of those statements are found to be inaccurate, states 

are at risk for CMS initiating compliance actions, including the 

withholding of federal funding
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Ongoing Monitoring for 

HCBS Settings Requirements
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Waiver and State Plan Provisions: Ongoing Monitoring

 After Statewide Transition Plans and Corrective Action Plans 

have come and gone, language in approved 1915(c) waivers, 

1915(i) and (k) state plan benefits and 1115 demonstrations will 

describe how states will conduct ongoing monitoring to ensure 

continued regulatory compliance

 CMS will be further describing how the 1915(c) waiver 

application and 1915(i) and (k) state plan amendment pre-prints 

will be used for ongoing monitoring in 2023
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More on Ongoing Monitoring (1 of 2)

 States are to have mechanisms in place for ongoing monitoring, 

detection of non-compliance, and to ensure continued compliance 

with the HCBS settings criteria, as is true for all Medicaid provisions

 States articulated their process for ongoing monitoring in Statewide 

Transition Plans, but ongoing monitoring is required for all HCBS 

waivers and state plan benefits, regardless of whether the transition 

period applied to them

 Through waiver actions and state plan amendments, states will 

describe how functions such as case management, licensure and 

certification standards, beneficiary feedback and other options for 

ongoing monitoring will be used to identify and remediate any 

provider compliance issues
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More on Ongoing Monitoring (2 of 2)

 States that have received CMS approval for public health 

emergency (PHE)-related flexibilities related to the settings rule 

(e.g., 1915(c) waiver Appendix K amendments) will need to 

ensure ongoing compliance with the settings rule once the 

flexibility ends

 States requested these flexibilities for settings that were not 

established by the effective date of the final settings regulation, 

and were therefore not covered by the transition period. These 

settings had to be in compliance with the regulatory criteria in 

order to receive federal reimbursement for HCBS

 CMS is available for technical assistance on ways to ensure a 

return to compliance for these settings
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Summary

 By the end of the transition period, March 17, 2023, all settings 

must be in compliance with the HCBS settings regulatory 

criteria not articulated in a CAP submitted to CMS

 Once the transition period is over, the HCBS authorities (e.g., 

1915(c), (i), or (k)) contain the enforcement mechanism for 

ongoing compliance

 CMS is available for technical assistance on ways to ensure a 

return to compliance for settings that received a PHE-related 

flexibility, and for any ongoing compliance issues a state must 

address
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Questions?
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Resources (1 of 3) 

CMS Baltimore Office Contact—Division of Long-Term Services and Supports:

 HCBS@cms.hhs.gov

To Request Technical Assistance:

 HCBSettingsTA@neweditions.net

The Home and Community-Based Services Training series has trainings 

focused on various aspects of STP and HCBS implementation:

 Home & Community Based Services Training Series | Medicaid
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Resources (2 of 3)

HCBS Settings Regulation Implementation: A National Conversation about Statewide 

Transition Plans

 https://www.medicaid.gov/medicaid/home-community-based-services/downloads/hcbsrule-stp-conversation.pdf

HCBS Settings Rule Implementation – Moving Forward Toward March 2023 and Beyond

 https://www.medicaid.gov/medicaid/home-community-based-services/downloads/hcbssettings-rule-imp.pdf

Themes Identified During CMS’ Heightened Scrutiny Site Visits

 https://www.medicaid.gov/medicaid/home-community-basedservices/downloads/themes-identified-during-cms.pdf
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Resources (3 of 3) 

Frequently Asked Questions (FAQs): Home and Community-Based Settings Regulation 

Implementation: Heightened Scrutiny Reviews of Presumptively Institutional Settings: 

SMD # 19-001, issued on March 22, 2019

 https://www.medicaid.gov/federal-policy-guidance/downloads/smd19001.pdf

1915(c) Waiver Technical Guide

 https://wmsmmdl.cms.gov/WMS/help/version_36_1915c_Waiver_Application_and_Accompanying_

Materials.zip

1915(i) Template

 https://www.medicaid.gov/sites/default/files/2019-12/1915i-application_0.pdf