Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL
 

OVERSIGHT OF QUALITY OF 

CARE IN MEDICAID HOME AND 

COMMUNITY-BASED SERVICES 

WAIVER PROGRAMS
 

Daniel R. Levinson
 

Inspector General
 

June 2012 

OEI-02-08-00170 
 

 

 

EXECUTIVE SUMMARY: OVERSIGHT OF QUALITY OF CARE IN MEDICAID HOME 

AND COMMUNITY-BASED SERVICES WAIVER PROGRAMS 

OEI-02-08-00170 

WHY WE DID THIS STUDY 

In recent years, States have altered their approach to providing Medicaid-funded long-term care 

services. Rather than providing the majority of that care in institutions—such as nursing homes— 

States are now providing more care in homes and other community-based settings. States most 

often provide this care through 1915(c) home and community-based services (HCBS) waiver 

programs, and the individuals served by these programs are most commonly disabled and over age 

65. In fiscal year 2010, Medicaid expenditures for HCBS waiver programs serving this population 

totaled an estimated $8.9 billion. Strong oversight of waiver programs is critical to ensuring the 

quality of care provided to HCBS beneficiaries. The beneficiaries who rely on HCBS waiver 

programs are among Medicaid’s most vulnerable, and the nature of these programs puts them at 

particular risk of receiving inadequate care. 

HOW WE DID THIS STUDY 

States must operate their HCBS waiver programs in accordance with certain “assurances,” including 

three assurances related to quality of care. To meet these assurances, States must demonstrate that 

they have systems to effectively monitor the adequacy of service plans, the qualifications of 

providers, and the health and welfare of beneficiaries. We based this study on a review of 

documents from the Centers for Medicare & Medicaid Services’ (CMS) most recent quality review 

of waiver programs from 25 States, as well as information gathered from structured interviews with 

staff from the 10 CMS regional offices. 

WHAT WE FOUND 

Seven of the twenty-five States that we reviewed did not have adequate systems to ensure the 

quality of care provided to beneficiaries. Although CMS renewed the waiver programs in all seven 

of these States, three did not adequately correct identified problems. Not only did these States fail 

to correct these problems before renewal of their programs, they also had still not adequately 

addressed the problems long after renewal. In addition, CMS did not consistently use the few tools 

it has to ensure that States correct problems related to quality of care. 

WHAT WE RECOMMEND 

We recommend that CMS: (1) provide additional guidance to States to help ensure that they meet 

the assurances, (2) require States that do not meet one or more assurances to develop corrective 

action plans, (3) require at least one onsite visit before a waiver program is renewed and develop 

detailed protocols for such visits, (4) develop a broader array of approaches to ensure compliance 

with each of the assurances, and (5) make information about State compliance with the assurances 

available to the public. CMS concurred with four of the recommendations and partially concurred 

with our recommendation to require onsite visits. 
 

.
 

TABLE OF CONTENTS 

Objectives ....................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................6 

Findings .......................................................................................................9 

Seven of the twenty-five States did not have adequate systems 

to ensure the quality of care provided to beneficiaries ....................9 

CMS renewed the waiver programs of three States that did not 

adequately correct problems related to quality of care ..................11
 

CMS did not consistently use the few tools it has to ensure that 

States correct problems related to quality of care ..........................12 

Conclusion and Recommendations ............................................................14 

Agency Comments and Office of Inspector General Response ....16 

Appendix: Agency Comments..................................................................17 

Acknowledgments .....................................................................................20 
 

OBJECTIVES 

1.	 To determine the extent to which States had systems to ensure the 

quality of care provided to beneficiaries in home and 

community-based services (HCBS) waiver programs for the aged 

and/or disabled. 

2.	 To determine the extent to which the Centers for Medicare & Medicaid 

Services (CMS) renewed waiver programs in States that did not 

adequately correct problems related to quality of care. 

3.	 To describe how CMS oversees States’ efforts to ensure the quality of 

care provided under these waiver programs. 

BACKGROUND 

In recent years, States have altered their approach to providing 

Medicaid-funded long-term care services. Rather than providing the majority 

of that care in institutions—such as nursing homes—States are now providing 

more care in homes and other community-based settings. States most often 

provide this care through 1915(c) HCBS waiver programs, and the individuals 

served by these programs are most commonly disabled and over age 65.1 In 

fiscal year 2010, Medicaid expenditures for HCBS waiver programs serving 

this population totaled an estimated $8.9 billion.2 

Strong oversight of waiver programs is critical to ensuring the quality of care 

provided to beneficiaries. The beneficiaries served by these programs are 

among Medicaid’s most vulnerable, and the nature of these programs puts 

beneficiaries at particular risk of receiving inadequate care. Some programs 

allow beneficiaries to be cared for by individuals with limited professional 

training, such as family members and neighbors. In addition, beneficiaries may 

receive care in their homes, isolated from observers who might detect and 

prevent abuse or mistreatment. 

1

 Kaiser Commission on Medicaid and the Uninsured. Medicaid Home and CommunityBased Services Programs: Data Update, pp. 3-4. Accessed at 

http://www.kff.org/medicaid/upload/7720-05.pdf on May 18, 2012. See also Kaiser 

Commission on Medicaid and the Uninsured and the University of California at San 

Francisco, Medicaid 1915(c) Home and Community-Based Service Waiver Participants, by 

Type of Waiver, 2008 Accessed at 

http://www.statehealthfacts.org/comparetable.jsp?ind=241&cat=4 on April 16, 2011. For 

background information on section 1915(c) of the Social Security Act, see footnotes 5, 6, and 

7. 

2

 Preliminary findings from Thomson Reuters, Medicaid 1915(c) Waiver Expenditures: 

2011 Update, Table 3, October 2011. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 1 
 

 

 

 

 

Federal agencies have raised concerns about the quality of care provided under 

these waiver programs. Most notably, in 2003, the Government Accountability 

Office found that more than 70 percent of the programs it reviewed had 

problems with quality of care, such as failure to provide necessary services, 

weaknesses in beneficiaries’ service plans, and inadequate case management.3 

Further, in 2009, CMS found quality-of-care problems in Alaska’s waiver 

programs and took the unprecedented step of placing a moratorium on 

enrollment in those programs, along with requiring a range of corrective 

actions.4 

Medicaid Coverage for Home and Community-Based Services 

In 1981, Congress significantly expanded the availability of HCBS by 

offering States the option of establishing Medicaid 1915(c) HCBS waiver 

programs.5 The HCBS waiver authority permits States to waive certain 

Medicaid requirements to provide a wide range of services to persons who 

otherwise would receive institutional care.6 

Each waiver program must serve individuals from one of the following three 

groups: persons who are aged (65 or older) and/or disabled, persons with 

intellectual and/or developmental disabilities, and persons with mental 

illnesses.7 As noted earlier, the majority of beneficiaries fall into the first 

group, with over 674,000 aged and/or disabled beneficiaries receiving 

3

 General Accounting Office (now the Government Accountability Office), GAO-03-576, 

Long-term Care: Federal Oversight of Growing Home and Community-Based Waivers 

Should Be Strengthened, June 20, 2003. 

4

 CMS Regional Office Letter to State Medicaid Agency Director, June 26, 2009, 

Re: Preliminary Observations, Findings and Required Corrective Actions, p.1. Accessed at 

http://www.hss.state.ak.us/dsds/cmsreview/AK_HCBS_Review_Preliminary_Letter_06-26­

09.pdf on July 23, 2009. 

5 This program was established under section 1915(c) of the Social Security Act, added by the 

Omnibus Budget Reconciliation Act of 1981, P.L. 97-35 § 2176. 

6 Under § 1915(c), CMS may waive the following Medicaid requirements: 

(1) Statewideness—States may cover services in only a portion of the State, rather than in all 

geographic jurisdictions; (2) comparability of services—States may limit HCBS waiver 

services to individuals in State-selected target groups who require an institutional level of 

care; and (3) certain financial eligibility requirements—States may use more liberal income 

requirements for persons receiving HCBS. See Social Security Act 1915(c)(3); CMS, 

Application for a § 1915 (c) Home and Community-Based Waiver [Version 3.5]: Instructions, 

Technical Guide and Review Criteria, pp. 5-6 (January 2008). 

7 Waiver programs for the aged and/or disabled provide assistance to individuals over age 65 

and to those with physical or other disabilities under age 65. Such programs would not serve 

persons from the other two groups, i.e., those who are intellectually or developmentally 

disabled or those who are mentally ill. See 42 CFR § 441.301(b)(6). 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 2 
 

 

 

services in 2008.8 Under these programs, States may provide a wide range 

of services—such as case management services, homemaker services, and 

personal care services—in a home or community-based setting for people 

who are eligible for institutional care.9 

Federal Requirements Related to Quality of Care 

States must operate their waivers in accordance with certain “assurances” 

identified in Federal regulations.10 CMS has designated six waiver 

assurances that States must include as part of an overall quality 

improvement strategy.11 Three of these assurances address Federal 

requirements related to the quality of care provided by waiver programs.12 

These requirements state that each beneficiary must have a written service 

plan based on an assessment of the individual’s needs,13 each beneficiary 

must be served by qualified providers,14 and States must have necessary 

safeguards to protect the health and welfare of beneficiaries.15 CMS 

guidance describes how States are to meet the three quality-of-care 

16 assurances.

Before 2004, CMS determined whether States were meeting these 

assurances by conducting a review of a small sample of beneficiaries at 

least once during the life of the waiver program. In 2004, CMS 

transferred the primary responsibility for monitoring waiver programs to 

the States.17 Currently, States are responsible for monitoring the quality of 

their own programs and for developing their own systems to continuously 

8

 Kaiser Commission on Medicaid and the Uninsured and the University of California at San 

Francisco, Medicaid 1915(c) Home and Community-Based Service Waiver Participants, by 

Type of Waiver, 2008. Accessed at 

http://www.statehealthfacts.org/comparetable.jsp?ind=241&cat=4 on February 6, 2012. 9

 42 CFR § 440.180(b). 

10 42 CFR § 441.301 and 302. 

11 CMS, Application for a § 1915(c) Home and Community-Based Waiver [Version 3.5]: 

Instructions, Technical Guide and Review Criteria, pp. 9-10 (2008). 

12 The other three assurances relate to verifying that beneficiaries meet level-of-care 

requirements, having administrative authority for the operation of the waiver, and ensuring 

financial accountability of the waiver program. 

13 42 CFR § 441.301(b)(1)(i). Federal regulations use the term “plan of care,” while CMS 

guidance uses the term “service plan.” In this report, we use the term “service plan.” 

14 42 CFR § 441.302(a)(1) and (2). 

15 42 CFR § 441.302(a). 

16 CMS, Application for a § 1915(c) Home and Community-Based Waiver [Version 3.5]: 

Instructions, Technical Guide and Review Criteria, pp. 9-10 (2008). 

17 CMS, Interim Procedural Guidance for Assessing HCBS Waivers (2004). 

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monitor whether the State is meeting the assurances. CMS also expects 

States to have strategies to correct any problems uncovered by their 

monitoring systems. 

The three quality-of-care assurances are as follows: 

	 Service Plans. For the service plan assurance, CMS requires each 

State to demonstrate that it has an adequate system for reviewing the 

service plans for beneficiaries in waiver programs.18 Such a system 

should ensure that the State periodically reviews plans to make sure 

that all beneficiaries’ needs are addressed and that their preferences are 

considered. CMS also requires each State to submit evidence 

illustrating its process for ensuring that beneficiaries actually receive 

the services listed in their plans. 

	 Qualified Providers. For the qualified provider assurance, CMS requires 

each State to demonstrate that it has designed and implemented an 

adequate system for ensuring that all waiver services are rendered by 

qualified providers.19 Each State must periodically verify that all of its 

providers meet its licensing and certification requirements, as well as any 

additional requirements for nonlicensed and noncertified providers 

established in the waiver application. 

	 Health and Welfare. For the health and welfare assurance, CMS requires 

each State to demonstrate on an ongoing basis that it is able to identify, 

address, and seek to prevent instances of abuse, neglect, and 

exploitation.20 When such instances are identified, CMS requires the 

State to take appropriate action and to look for any trends in 

implementing prevention strategies. 

Oversight of HCBS Waiver Programs 

CMS set forth its requirements and procedures for oversight of State waiver 

program operations in guidance documents issued to the States.21 In 

accordance with CMS’s guidance, States first submit waiver applications to 

CMS describing the systems they will use to meet each of the assurances. 

18 CMS, Updated Interim Procedural Guidance for Conducting Quality Reviews of Home and 

Community-Based Services (HCBS) Waiver Programs, pp. 15-16 (February 6, 2007). 

19 Ibid, p. 17. 

20 Ibid, p. 18. 

21 Oversight activities described in this section are found in two CMS guidance documents: 

Instructions, Technical Guide and Review Criteria for Applications for a § 1915(c) Home and 

Community-Based Waiver [Version 3.5] (January 2008), and Updated Interim Procedural 

Guidance for Conducting Quality Reviews of Home and Community-Based Services (HCBS) 

Waiver Programs (February 6, 2007). 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 4 
 

 

 

States must describe the types of data they will collect, as well as their plans 

for correcting any identified problems. Data collection can include 

beneficiary surveys or onsite visits. It can also include record reviews to 

determine whether all services were delivered in accordance with 

beneficiaries’ service plans. If CMS determines that these systems are 

adequate and the waiver application meets applicable Federal requirements, 

the waiver program is approved for 3 to 5 years.22 

To determine whether States meet the required assurances, CMS regional 

office staff conduct quality reviews in which CMS requests that each State 

provide evidence from its monitoring systems. This evidence should include 

summaries of data collected, as well as any actions taken by the State to 

correct the problems found by its monitoring systems.23 

After examining the evidence submitted by the State, CMS determines 

whether the State has met each assurance. CMS provides this information to 

the State in a report that summarizes CMS’s findings and conclusions about 

the State’s compliance with the assurances. CMS may also include in the 

report recommendations to correct any problems identified during the 

review. To give the State enough time to correct any problems, CMS sends 

the report at least a year before the expiration of the State’s waiver program. 

Generally a year after the quality review, the State submits an application to 

CMS to renew the waiver program. CMS guidance states that before the 

agency can approve a program for renewal, it must be confident that the 

measures the State has taken or plans to take will correct the problems. 

If a State does not correct quality-of-care problems, CMS may require the 

State to develop and implement a corrective action plan.24 CMS may require 

such a plan after the State fails to meet one or more assurances during the 

quality review or at the time of the program’s renewal. As part of this plan, 

each State is expected to specify target dates to address any unmet 

recommendations and to submit additional evidence illustrating that it has 

corrected identified problems. 

22 The initial waiver is for 3 years. Each renewal of the waiver is for 5 years. See 

42 U.S.C. § 1396n(c)(3) and 42 CFR § 430.25(h)(2)(i). 

23 Note that CMS guidance refers to this process as “discovery and remediation.” See 

Instructions, Technical Guide and Review Criteria for Applications for a § 1915(c) Home and 

Community-Based Waiver [Version 3.5], p. 10 (January 2008). 

24 For the purposes of this report, we use the term “corrective action plan” to mean any plan 

that CMS requires a State to develop so as to correct problems found in a waiver program. 

CMS generally refers to such plans as either “corrective action plans” or “work plans.” 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 5 
 

 

 

 

In addition, CMS recommends that its regional offices conduct an onsite 

review of each waiver program at least once before the program’s renewal. 

The regional offices may also conduct focused onsite reviews of programs 

that are not meeting all of the assurances. These focused onsite visits 

address particular problems that CMS has identified and may not include an 

assessment of all areas. CMS also has the authority to terminate a program 

that is not meeting one or more assurances.25 

Related Reports 

The Office of Inspector General (OIG) will issue a report on HCBS provided 

in assisted living facilities (ALFs).26 That evaluation determines the extent 

to which States comply with Federal waiver requirements for ALFs. 

METHODOLOGY 

Data Collection and Analysis 

We based this study on two data sources: (1) a review of documentation for 

HCBS waiver programs, and (2) structured interviews with CMS staff from 

the 10 regional offices. 

Scope 

To provide the most current assessment of the waiver programs and CMS’s 

review process, we focused on the States that had 1915(c) HCBS waiver 

programs for the aged and/or disabled that were reviewed under CMS’s most 

recent guidance. Specifically, we reviewed programs for which: (1) CMS 

had performed its quality review using the most recent guidance, which was 

updated in February 2007; and (2) the State had applied for renewal using 

the most recent version of the application, which was updated in 

January 2008. We identified 33 waiver programs that were administered by 

25 States.27 

Data Collection 

Review of Documentation. We requested documentation from the CMS 

regional office responsible for each of these waiver programs. This 

documentation spanned from December 2006 through February 2011. 

Specifically, we requested: 

(1) evidence that each State provided to CMS for the quality review 

regarding the three assurances. This was usually summarized evidence 

25 42 CFR § 441.304(d). 

26 OIG, Home and Community-Based Services in Assisted Living Facilities, 

OEI-09-08-00360, forthcoming.
 

27 In 2009, 110 waiver programs for the aged and/or disabled were in operation. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 6 
 

 

of the different elements of the State’s monitoring systems, such as 

beneficiary survey results, quarterly reports of home visits, and provider 

training attendance logs. 

(2)	 documents from CMS’s most recent quality review of each State, 

including the findings report. This report typically includes a detailed 

description of the State’s monitoring systems and of instances in which 

CMS found that evidence of these systems was inadequate or lacking. 

It also includes CMS’s determination of whether the State met each 

assurance. 

(3)	 documents from any CMS-conducted onsite visits of the State. 

(4)	 documents about any followup activities that were conducted by CMS 

or the State after the quality review was completed, including any 

updates on corrective actions taken by the State. 

(5)	 CMS’s assessment of the renewal application, including any documents 

that the State submitted in response to CMS’s inquiries during the 

review of the application. 

Interviews with CMS regional officials. We conducted structured 

interviews—either in person or over the telephone—with CMS officials 

from the 10 regional offices. We discussed the quality review process and 

the evidence that States submitted to demonstrate that they met each 

assurance. In addition, we asked about how officials ensure that the States 

met the assurances, including how they use corrective action plans and 

onsite visits. Finally, we asked for additional information, where necessary, 

to corroborate and supplement the information from our documentation 

review. 

Analysis 

To describe States’ monitoring systems to ensure the quality of care provided 

to beneficiaries, we reviewed the documents from CMS’s most recent 

quality review of each State’s programs as well as the information gathered 

from our interviews. We conducted this analysis by State, rather than by 

program, because the States are responsible for ensuring that their programs 

meet the assurances. 28 We considered a State to have met an assurance if 

CMS determined in its report that “[t]he State substantially meets the 

assurance” or “[t]he State demonstrates the assurance but CMS recommends 

improvements.” Conversely, we considered a State to be out of compliance 

with an assurance if CMS determined that “[t]he State does not fully or 

28 Of the 25 States, 19 States had 1 waiver program, 5 States had 2 waiver programs, and 

1 State had 4 waiver programs. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 7 
 

 

 

substantially demonstrate the assurance” or “[t]he State does not 

demonstrate the assurance.”29 We also analyzed the data to identify practices 

of States that met the assurances. These data are generally not available to 

the public. We conducted this analysis in order to describe the differences 

among States’ monitoring systems, as well as to describe the types of 

problems generally identified by CMS. 

To determine the extent to which CMS renewed waiver programs for States 

in which the quality reviews found that one or more assurances were not 

met, we reviewed CMS documents about any followup activities between 

CMS and the States and the information gathered from the interviews. We 

then determined how many of these States had still not corrected problems 

(1) at the time of renewal and (2) as of early 2011. 

To determine the extent to which CMS used existing tools to ensure 

compliance with the assurances, we reviewed CMS documents and interview 

data. We determined whether CMS officials required States that did not 

meet one or more of the assurances to develop corrective action plans and 

whether CMS officials conducted any onsite visits or focused onsite visits 

with these States. 

Limitations 

We did not independently assess the accuracy of CMS’s determinations 

about whether States met the three assurances. In addition, our findings 

cannot be generalized to the other States or their waiver programs. 

Standards 

This study was conducted in accordance with the Quality Standards for 

Inspection and Evaluation issued by the Council of the Inspectors General 

on Integrity and Efficiency. 

29 CMS guidance instructs staff responsible for conducting quality reviews to select one of 

these four categories when determining whether a waiver program meets each assurance. See 

CMS, Updated Interim Procedural Guidance for Conducting Quality Reviews of Home and 

Community-Based Services (HCBS) Waiver Programs, pp. 28-30 (February 6, 2007). 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 8 
 

FINDINGS 

Seven of the twenty-five States did not have adequate 

systems to ensure the quality of care provided to 

beneficiaries 

As previously noted, States must meet three assurances designed to protect 

beneficiaries and ensure the quality of care they receive under the waiver 

programs. States must develop and implement their own monitoring 

systems to ensure that they meet each of these assurances. CMS determines 

whether a State meets each assurance by conducting a quality review. When 

a State does not demonstrate that it meets one or more assurances during the 

quality review, the State is unable to ensure the quality of care provided to 

beneficiaries. 

During its quality reviews, CMS found that 7 of the 25 States did not meet 

1 or more of the 3 quality-of-care assurances for 1 of their waiver programs. 

In these cases, the States did not have adequate monitoring systems to ensure 

quality of care. Three of these seven States did not meet any of the 

assurances. 

Six States did not meet the service plan assurance 

A monitoring system for service plans should ensure that the State 

periodically reviews plans to ensure that beneficiaries’ needs are addressed. 

States must also have systems to verify that beneficiaries actually received 

the services listed in their plans and that all plans have been assessed and 

updated at least annually. Without adequate monitoring systems, States may 

not be able to ensure that the services that they are paying for are actually 

provided and that beneficiaries are receiving all of the services they need. 

CMS found that six States did not have adequate systems to monitor service 

plans. Notably, one State had no method for determining whether services 

were provided according to beneficiaries’ service plans. As one CMS 

official noted, “Some States really have no monitoring systems [for service 

plans] at all.” Four States did not review an adequate sample of service 

plans to ensure that all plans were assessed and updated. CMS allows States 

to monitor program performance by evaluating the entire population, if it is 

small enough, or by evaluating a sample of the population. If the sample is 

not representative of all beneficiaries’ service plans, the State cannot claim 

that it adequately monitors service plans, and CMS cannot conclude that the 

State complies with the service plan assurance. 

Additionally, CMS found that four States had inadequate strategies to correct 

problems found in the service plans. For example, one of these States 

discovered that service plans were not being consistently updated but failed 

to implement any strategies to correct this problem. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 9 
 

In contrast, the States that met this assurance had several practices to ensure 

the quality of their service plans. For example, one State reviewed service 

plans multiple times throughout the year and assigned different experts to 

assess various aspects of the plans. The State also selected a sample of 

service plans to review to ensure that the services in the plan matched the 

Medicaid claims submitted for the beneficiaries. 

Five States did not meet the qualified provider assurance 

A monitoring system for qualified providers should ensure that all providers 

meet the State’s licensing and certification requirements, as well as any 

additional requirements established in the HCBS waiver application for 

nonlicensed and noncertified providers. CMS officials noted that it is 

critical to verify that providers are qualified before they render services to 

beneficiaries. States without adequate systems for monitoring provider 

qualifications may expose beneficiaries to providers with poor qualifications 

or criminal backgrounds. 

CMS found that five States did not have adequate systems to ensure that 

providers are qualified to render care. Notably, CMS identified two States 

that allowed caregivers to provide services before the State received the 

results of criminal background checks. One of these States also allowed 

providers to self-report whether they were qualified without requiring any 

documentation to support their assertions. Another State did not review an 

adequate sample of provider records and, therefore, did not adequately 

monitor its providers. CMS found that another State did not attempt to 

verify the qualifications of noncertified providers and that some States did 

not verify that providers received the training necessary to provide services. 

In contrast, the States that met this assurance had several practices to ensure 

that all HCBS providers had appropriate qualifications. For example, one 

State reviewed provider qualifications and conducted onsite visits with each 

provider before allowing the provider to enroll in the HCBS program. The 

State regularly scheduled visits with beneficiaries to assess their satisfaction 

with providers. It also tracked license expirations electronically, 

automatically decertifying providers who did not renew their licenses. 

Several CMS officials stated that using such electronic systems strengthens 

the monitoring of HCBS providers. 

Four States did not meet the health and welfare assurance 

A monitoring system for health and welfare should identify instances of 

beneficiary abuse, neglect, and exploitation. CMS expects that States will 

take appropriate action when such instances have been identified and 

implement prevention strategies based on analyses of trends. Without such 

monitoring systems, the States are not able to adequately ensure the health 

and welfare of their beneficiaries. 

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CMS found that four States did not meet the health and welfare assurance. 

Specifically, two of the four States lacked a system—such as an incident 

tracking system—to catalog and track instances of alleged abuse, neglect, or 

exploitation of beneficiaries. One of these States relied solely on selfreported data from beneficiary surveys as its only means of such monitoring, 

which CMS considered insufficient. 

In the two other States, CMS found problems with the existing incident 

tracking systems. One of these States did not require that incidents of 

suspected abuse, neglect, or exploitation be reported, so there was no 

assurance that such incidents were appropriately tracked. The other State 

did not have adequate documentation of such incidents or adequate 

documentation of any followup actions that had been taken. 

In contrast, the States that met this assurance had several practices to ensure 

that the health and welfare of beneficiaries were protected. For example, 

one State interviewed beneficiaries and providers in person and mailed a 

survey to beneficiaries annually to gauge their satisfaction with the program. 

If beneficiaries noted concerns, they were relayed to the appropriate program 

staff for followup. The State also had a system to track and correct incidents 

of alleged abuse or neglect, as well as a system to collect information on 

suspicious deaths. Additionally, the State coordinated with other State 

agencies, when necessary, to review and resolve cases in which 

beneficiaries’ health and welfare were at risk. Several CMS officials 

stressed the importance of this interagency coordination, which helps a State 

track whether an incident has been resolved by another agency. 

CMS renewed the waiver programs of three States that 

did not adequately correct problems related to quality of 

care 

In instances in which CMS has identified serious problems with a waiver 

program—such as not meeting an assurance—the State must correct the 

problems. CMS guidance states that before the agency can approve a 

program for renewal, it must be confident that the measures that the State 

has taken, or plans to take, will adequately address the problems. 

Although CMS renewed the waiver programs in all seven States that did not 

meet one or more assurances, three of these States did not adequately correct 

problems that CMS identified during its quality reviews. Not only did these 

States fail to correct these problems before the renewal of their programs, 

but two of them still had not adequately addressed the problems almost 

3 years after renewal, and the third had not adequately addressed the 

problems over a year after renewal. 

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CMS officials noted that one State had a “pervasive problem” with its 

approach to quality management and improvement that spanned the State’s 

many waiver programs. By the time of the program’s renewal, the State had 

still failed to provide evidence that it had fixed all the problems uncovered 

by the quality review. Specifically, the State did not demonstrate to CMS 

that it had made sufficient progress to ensure that service plans were 

adequate, consistently revised, or updated. Also, it still could not 

demonstrate that it could verify the qualifications of noncertified providers 

or that it could adequately document incidents or any followup related to 

those incidents. In spite of these problems, CMS renewed the program. 

The second State had provided CMS with plans to make improvements. 

However, by the time of renewal, it could not demonstrate to CMS that it 

could monitor whether beneficiaries were receiving all of the services 

identified in their service plans. In addition, it still could not demonstrate 

that services were provided by qualified providers. 

For the third State, CMS officials reported that, although at the time of 

renewal the State provided evidence of having some monitoring systems, it 

still could not demonstrate that criminal background checks were reviewed 

before caregivers were allowed to provide services. In addition, the State 

still did not appear to have strategies to correct problems uncovered by its 

existing monitoring systems. 

None of the three States had made the necessary changes to their waiver 

programs, even though for two of them almost 3 years had passed since the 

time of renewal. For the third State, more than 1 year had passed since the 

time of renewal. CMS officials explained that, although CMS has the 

authority to terminate programs when States do not meet assurances, it 

generally does not do so because these programs serve vulnerable 

beneficiaries who might be left without critical services. 

CMS did not consistently use the few tools it has to 

ensure that States correct problems related to quality of 

care 

Short of terminating a waiver program, CMS has few tools to ensure that 

States correct problems found during the quality reviews.30 Furthermore, 

CMS does not consistently use the tools at its disposal—such as corrective 

action plans or onsite visits—to ensure that States make necessary changes 

and comply with the assurances. 

30 Despite CMS’s having placed a moratorium on enrollment in the Alaska waiver programs 

in 2009, CMS officials reported that the agency needs additional regulatory authority to use 

such tools in the future. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 12 
 

 

CMS did not require corrective action plans from three of the 

seven States that did not meet assurances 

CMS may require States to develop and implement corrective action plans if 

they have not corrected problems and cannot ensure the quality of care 

provided to beneficiaries. Several CMS officials noted that they would 

require that a State develop a corrective action plan if it did not meet one or 

more assurances during the quality review. However, of the seven States 

that did not meet one or more assurances, CMS did not require three to 

develop corrective action plans. CMS does not have guidance about when to 

require corrective action plans, what these plans should contain, or how 

frequently States should report their progress. 

CMS did not conduct onsite visits with two of the seven States 

that did not meet assurances 

CMS guidance recommends that onsite visits be conducted at least once 

before a waiver program’s renewal and that focused onsite visits (i.e., site 

reviews focusing on particular issues of concern) be conducted for programs 

that are not meeting all of the assurances. Despite this, CMS did not conduct 

any onsite visits with two of the seven States that did not meet one or more 

assurances. Such visits may be useful in determining the extent to which 

beneficiaries could be negatively affected by problems found during CMS’s 

quality reviews. Notably, CMS did conduct onsite visits with six additional 

States in our review that had met the assurances. Also, CMS did not conduct 

focused onsite visits with any of the States in our review. Several officials 

noted that CMS guidance is limited on when and how to conduct onsite 

visits and that better protocols for how to conduct reviews during these visits 

would be helpful. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 13 
 

CONCLUSION AND RECOMMENDATIONS 

States must operate their HCBS waiver programs in accordance with certain 

required assurances, including three related to quality of care. CMS does not 

directly monitor the delivery of HCBS services to beneficiaries. Rather, 

CMS requires States to have strong monitoring systems to ensure that (1) the 

services provided meet beneficiaries’ needs, (2) these services are rendered 

by qualified providers, and (3) instances of abuse and neglect are identified 

and addressed. If these assurances are not met, beneficiaries’ health and 

safety may be at risk. 

During its quality reviews, CMS found that 7 of the 25 States did not meet 

1 or more of the 3 required assurances. These States did not have adequate 

systems to monitor the quality of care provided to beneficiaries. Despite the 

fact that three of these States did not adequately correct identified problems, 

CMS renewed their waiver programs. Lastly, CMS did not consistently use 

its few tools, namely, corrective action plans and onsite visits, to ensure that 

States correct problems and comply with the assurances. 

Together, these findings suggest the need for increased oversight by CMS 

and monitoring by States to ensure that quality care is provided to 

beneficiaries in HCBS waiver programs. We recommend that CMS: 

Provide Additional Guidance to States to Help Ensure That They 

Meet the Assurances 

CMS should provide additional guidance to States about the elements of 

strong monitoring systems. As part of this guidance, CMS should identify 

and provide States with examples of effective practices for meeting each of 

the assurances, some of which are highlighted in this report. States can use 

this guidance to improve their monitoring systems and better ensure that 

their waiver programs provide quality care to beneficiaries. CMS could 

provide this assistance as a part of its continuing communication with the 

States. 

Require States That Do Not Meet One or More Assurances to 

Develop Corrective Action Plans 

When States do not meet one or more assurances during the quality reviews, 

CMS should require them to develop a corrective action plan for each waiver 

program that fails to meet those assurances. CMS should develop standard 

protocols for these corrective action plans, including when to require them, 

what States should include in the plans, and how frequently States should 

report their progress to CMS. This would enable CMS to hold States more 

accountable. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 14 
 

 

 

Require At Least One Onsite Visit Before a Waiver Program is 

Renewed and Develop Detailed Protocols for Such Visits 

CMS should require that regional offices conduct an onsite visit at least once 

before a waiver program’s renewal. CMS should also require regional 

offices to conduct more frequent onsite visits or focused onsite visits when 

States do not meet one or more assurances or when States demonstrate 

continued difficulty in meeting the assurances. By conducting these visits 

more frequently, CMS would be better able to gauge the extent of any 

problems noted during its quality reviews and determine whether any 

progress has been made in correcting these problems. 

CMS should also provide detailed protocols for both regular and focused 

onsite visits that include guidelines for when these visits should be 

conducted. These protocols should also include instructions for conducting 

these visits, such as how best to assess States’ monitoring systems while 

onsite. 

Develop a Broader Array of Approaches to Ensure Compliance 

With Each of the Assurances 

CMS has the legislative authority to terminate a waiver program with serious 

problems but rarely does so, as termination may leave thousands of 

beneficiaries without critical services. Short of termination, CMS has few 

tools to ensure that States correct problems. CMS should seek a broader 

array of approaches to address the continual failure of some States to comply 

with the assurances. These approaches could include seeking additional 

legislative authority to issue moratoria on future enrollment in poorly 

performing States. Other approaches could include seeking legislative 

authority to withhold a portion of Federal funding when other corrective 

efforts are unsuccessful. 

Make Information About State Compliance With the Assurances 

Available to the Public 

CMS should make information available to the public about whether 

States meet each of the assurances during the quality reviews. CMS could 

summarize this information or publish the final reports detailing the 

findings of its quality reviews. CMS could also include information on 

corrective actions taken by States that did not meet the assurances. Public 

disclosure would further compel States to comply with the assurances and 

would provide beneficiaries and their families with needed information 

about the extent to which States have systems to ensure quality care. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 15 
 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

CMS concurred with four of our five recommendations and partially 

concurred with one. CMS agreed that because of the increase in waiver 

services and the vulnerabilities of many of the waiver recipients, strong 

oversight of waiver programs is critical. 

CMS concurred with our first recommendation and stated that, through a 

series of bimonthly Quality Forums with the States, it will ensure that 

providers receive guidance to improve their monitoring systems. CMS 

concurred with our second recommendation and stated that it will develop a 

standard protocol for corrective action plans. 

CMS partially concurred with our third recommendation and stated that it 

plans to develop a standard protocol for conducting site visits. However, it 

noted that it reserves the discretion to determine when site visits might not 

be required. It stated that it intends to evaluate the need for site visits on a 

case-by-case basis, taking into account the seriousness of the possible 

assurance failures and the availability of CMS resources. 

CMS concurred with our fourth recommendation and stated that it will 

address the issues of intermediate steps for corrections when a State fails to 

meet an assurance and that it will ensure that all central and regional office 

staff have knowledge of the options. CMS also stated that it issued a Notice 

of Proposed Rule Making for the waiver in which it addressed the issue of 

corrective actions and that it will determine whether legislation is necessary 

to provide stronger and more viable options. Finally, CMS concurred with 

our fifth recommendation and stated that it will explore the options for how 

to best make the disclosure of quality reviews available to the public. 

The full text of CMS’s comments is provided in the appendix. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 16 
APPENDIX 

Agency Comments 

DEPARTMENT OF HEALTH & HUMAN SERVICES Centers for Medicare & Medicaid Services 

Administrator 

Washington, DC 20201 

APR 1 22012 DATE: 

TO: 	 Daniel R. Levinson 

IDspector General 

FROM: 	 Mari~n -TaV'eooer 

Acting Administrator 

SUBJECT: 	 Office of Inspector General (OIG) Draft Report: "Oversight of Quality of Care in 

Medicaid Home and Community-Based Services Waiver Programs" 

(OEI-02-08-00170) 

Thank you for the opportunity to review and comment on the OIG draft report: Oversight of 

Quality of Care in Medicaid Home and Community-Based Services Waiver Programs 

(OEl-02-08-00170). The purpose of this report was to: I) assess the extent to which States had 

systems in place to ensure the quality of care provided to beneficiaries in home and communitybased services (HCBS) waiver programs for the aged and disabled; 2) determine the extent to 

which the Centers for Medicare & Medicaid Services (CMS) renewed waiver programs in States 

that did not adequately correct problems related to quality of cai:e; and 3) describe how CMS 

oversees States' efforts to ensure the quality of care provided under these waiver programs. 

As noted by the report, States are increasing their coverage for HCBS over institutional services 

for Medicaid beneficiaries who have chronic needs, and a primary method of delivery for HCSS 

is through 19J5(c) waiver programs. CMS agrees that, because of this increase and the 

vulnerabilities of many of the HCBS waiver program recipients, strong oversight of waiver 

programs is critical. . 

OIG Findings 

The OIG reviewed 33 waiver programs in 25 States that had used the version of the application 

updated in January 2008. . 

States must operate their HCSS waiver progranls in accordance with certain required assurances, 

including three assurances related to quality of care. eMS does not directly monitor the delivery 

of HeBS services to beneficiaries. 

The OIG found that during its quality reviews, eMS found that 7 of the 25 States did not meet I 

or more of the 3 required assurances. These States did not have adequate systems in place to 

monitor the quality of care provided to beneficiaries. In addition, CMS renewed the waiver 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 17 
 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 18 
 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 19 
 

ACKNOWLEDGMENTS 

This report was prepared under the direction of Jodi Nudelman, Regional 

Inspector General for Evaluation and Inspections in the New York regional office, 

and Meridith Seife, Deputy Regional Inspector General. 

Judy Kellis served as the team leader for this study. Other principal Office of 

Evaluation and Inspections staff from the New York regional office who 

contributed to the report include Lucía Fort and Shanti Nandiwada; central office 

staff who contributed include Kevin Farber and Tasha Trusty. 

Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs (OEI-02-08-00170) 20 
 

 

 

 

 

 

 

Office of Inspector General

http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of beneficiaries served by those 

programs. This statutory mission is carried out through a nationwide network of audits, 

investigations, and inspections conducted by the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying 

out their respective responsibilities and are intended to provide independent assessments of 

HHS programs and operations. These assessments help reduce waste, abuse, and 

mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 

HHS, Congress, and the public with timely, useful, and reliable information on significant 

issues. These evaluations focus on preventing fraud, waste, or abuse and promoting 

economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI 

reports also present practical recommendations for improving program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 

of fraud and misconduct related to HHS programs, operations, and beneficiaries. With 

investigators working in all 50 States and the District of Columbia, OI utilizes its resources 

by actively coordinating with the Department of Justice and other Federal, State, and local 

law enforcement authorities. The investigative efforts of OI often lead to criminal 

convictions, administrative sanctions, and/or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support for OIG’s internal operations. OCIG represents OIG in all civil and 

administrative fraud and abuse cases involving HHS programs, including False Claims Act, 

program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG 

also negotiates and monitors corporate integrity agreements. OCIG renders advisory 

opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG 

enforcement authorities.