Report to Congressional Requesters

United States General Accounting Office 

GAO 

June 2003 LONG-TERM CARE

Federal Oversight of 

Growing Medicaid 

Home and 

Community-Based 

Waivers Should Be 

Strengthened 

GAO-03-576 
From 1991 through 2001, Medicaid long-term care spending more than 

doubled to over $75 billion, while the proportion spent on institutional care 

declined. Over a similar time period, HCBS waivers grew from 5 percent to 

19 percent of such expenditures—from $1.6 billion to $14.4 billion—and the 

number of waivers, participants, and average state per capita spending also 

grew significantly. Since 1992, the number of waivers increased by almost 

70 percent to 263 in June 2002, and the number of beneficiaries, as of 1999, 

had nearly tripled to almost 700,000, of which 55 percent were elderly. 

In the absence of specific federal requirements for HCBS quality assurance 

systems, states provide limited information to the Centers for Medicare & 

Medicaid Services (CMS), the federal agency that administers the Medicaid 

program, on how they assure quality of care in their waiver programs for the 

elderly. States’ waiver applications and annual reports for waivers for the 

elderly often contained little or no information on state mechanisms for 

assuring quality in waivers, thus limiting information available to CMS that 

should be considered before approving or renewing waivers. GAO’s analysis 

of available CMS and state waiver oversight reports for waivers serving the 

elderly identified oversight weaknesses and quality of care problems. More 

than 70 percent of the waivers for the elderly that GAO reviewed 

documented one or more quality-of-care problems. The most common 

problems included failure to provide necessary services, weaknesses in 

plans of care, and inadequate case management. The full extent of such 

problems is unknown because many state waivers lacked a recent CMS 

review, as required, or the annual state waiver report lacked the relevant 

information. 

CMS has not developed detailed state guidance on appropriate quality 

assurance approaches as part of initial waiver approval. Although CMS 

oversight has identified some quality problems in waivers, CMS does not 

adequately monitor state waivers and the quality of beneficiary care. The 10 

CMS regional offices are responsible for ongoing monitoring for HCBS 

waivers. However, CMS does not hold these offices accountable for 

completing periodic waiver reviews, nor does it hold states accountable for 

submitting annual reports on the status of waiver quality. Consequently, 

CMS is not fully complying with statutory and regulatory requirements when 

it renews waivers. As of June 2002, almost one-fifth of waivers in place for 3 

years or more had either never been reviewed or were renewed without a 

review; for an additional 16 percent of waivers, reports detailing the review 

results were never finalized. Regional office personnel explained that 

limited staff resources and travel funds often impede the timing and scope of 

reviews. While regional office reviews include record reviews for a sample 

of waiver beneficiaries, they do not always include beneficiary interviews. 

The reviews also varied considerably in the number of beneficiary records 

reviewed and their method of determining the sample. 

Home and community-based 

settings have become a growing 

part of states’ Medicaid long-term 

care programs, serving as an 

alternative to care in institutional 

settings, such as nursing homes. To 

cover such services, however, 

states often obtain waivers from 

certain federal statutory 

requirements. GAO was asked to 

review (1) trends in states’ use of 

Medicaid home and communitybased service (HCBS) waivers, 

particularly for the elderly, (2) state 

quality assurance approaches, 

including available data on the 

quality of care provided to elderly 

individuals through waivers, and 

(3) the adequacy of federal 

oversight of state waivers. 

GAO is recommending that the 

Administrator of CMS take steps to 

(1) better ensure that state quality 

assurance efforts are adequate to 

protect the health and welfare of 

HCBS waiver beneficiaries, and 

(2) strengthen federal oversight of 

the growing HCBS waiver 

programs. Although CMS raised 

certain concerns about aspects of 

the report, such as the respective 

state and federal roles in quality 

assurance and the potential need 

for additional federal oversight 

resources, CMS generally 

concurred with the 

recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-03-576.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Kathryn G. 

Allen at (202) 512-7118. 

Highlights of GAO-03-576, a report to 

congressional requesters 

June 2003

LONG-TERM CARE 

Federal Oversight of Growing Medicaid 

Home and Community-Based Waivers 

Should Be Strengthened 
Page i GAO-03-576 Medicaid Home and Community-Based Waivers 

Letter 1

Results in Brief 3

Background 5

Waivers Are Vehicle for Dramatic Growth in Medicaid Home and 

Community-Based Services 10

Information on State Quality Assurance Approaches for Waivers 

Serving the Elderly Is Limited, but Quality Concerns Have Been 

Identified 14

CMS Guidance to States and Oversight Of HCBS Waivers Are 

Inadequate to Ensure Quality Care 22

Conclusions 34

Recommendations for Executive Action 35

Agency and State Comments and Our Evaluation 35

Appendix I Scope and Methodology 42 

Appendix II Suggested CMS Definitions of Home and 

Community-Based Services in Waivers Serving 

the Elderly 45 

Appendix III Medicaid Long-Term Care Expenditures, by Type 

and State, Fiscal Year 2001 47 

Appendix IV Number of Beneficiaries Served by HCBS 

Waivers for the Elderly and in Nursing Homes, 

by State, 1999 49 

Appendix V Number of HCBS Waivers for the Elderly, 

Beneficiaries, Expenditures, and per Beneficiary 

Expenditures by State, 1999 51 

Contents 
Page ii GAO-03-576 Medicaid Home and Community-Based Waivers 

Appendix VI CMS HCBS Quality Initiatives 53 

Appendix VII Beneficiary Samples for and Duration of 

Regional Office Reviews of 15 State Waivers 

Serving the Elderly 56 

Appendix VIII Comments from the Centers for Medicare & 

Medicaid Services 58 

Tables 

Table 1: States with Highest and Lowest per Beneficiary 

Expenditures for State HCBS Waivers Serving the Elderly, 

1999 13

Table 2: Quality Assurance Mechanisms States Reported Using in 

HCBS Waivers Serving the Elderly 15

Table 3: Quality Assurance Mechanisms Frequently Cited in Waiver 

Applications and Current Annual State Reports for HCBS 

Waivers Serving the Elderly 17

Table 4: Frequently Cited Quality-of-Care Problems Identified by 

CMS Regional Offices or States in HCBS Waivers Serving 

the Elderly 21

Table 5: HCBS Waivers That Had 10 Years or More Elapse without 

Ever Having a Regional Office Review or without a Review 

Prior to the Last Waiver Renewal, as of June 2002 25

Table 6: Status of CMS and State Monitoring for the 15 Largest 

HCBS Waivers Serving the Elderly 28

Table 7: Number and Specialty of CMS Regional Office Staff 

Assigned to Oversee HCBS Waivers 32

Table 8: Services States May Include in Their Medicaid Home and 

Community-Based Services Waiver 45

Figure 

Figure 1: Percentage Distribution of Medicaid Long-Term Care 

Expenditures, Fiscal Years 1991 and 2001 11
Page iii GAO-03-576 Medicaid Home and Community-Based Waivers 

Abbreviations 

CMS Centers for Medicare & Medicaid Services 

FTE full-time equivalent 

HCBS home and community-based services 

HCFA Health Care Financing Administration 

HHS Department of Health and Human Services 

ICF/MR intermediate care facility for the mentally retarded 

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Page 1 GAO-03-576 Medicaid Home and Community-Based Waivers 

June 20, 2003 

The Honorable Charles E. Grassley 

Chairman 

Committee on Finance 

United States Senate 

The Honorable John B. Breaux 

Ranking Minority Member 

Special Committee on Aging 

United States Senate 

Over the last decade, states have increased their support for long-term 

care services in individuals’ homes or in other community-based settings—

such as adult day care, adult foster care homes, and assisted living 

facilities—as an alternative to care in nursing homes and other 

institutions. For many vulnerable elderly and nonelderly individuals with 

physical, developmental, or cognitive disabilities, these alternative settings 

and services are seen as preferable to institutional care. Most state funding 

of long-term care is through Medicaid, the federal-state health care 

program for certain low-income individuals. Medicaid home and 

community-based services (HCBS) waivers, authorized under section 

1915(c) of the Social Security Act, are the primary means by which states 

provide noninstitutional long-term care.1

 Waivers allow states to limit the 

availability of services geographically, target specific populations or 

conditions, control the number of individuals served, and cap overall 

expenditures—actions not usually allowed under the Medicaid statute. 

The Centers for Medicare & Medicaid Services (CMS)—the federal agency 

that manages Medicaid—reviews and approves states’ requests for these 

waivers and also is responsible for ensuring that states have necessary 

safeguards to protect the health and welfare of individuals receiving 

services through waiver programs.2

 1

42 U.S.C. 1396n(c)(2000). 

2

Until June 2001, CMS was known as the Health Care Financing Administration (HCFA). In 

this report, we continue to refer to HCFA when our findings apply to the organizational 

structure and operations associated with that name. 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-03-576 Medicaid Home and Community-Based Waivers 

Despite the growing use of HCBS waivers, concerns have been raised 

about the quality of care provided through waivers serving both elderly 

and nonelderly populations. Newspaper exposés and some state audit 

reports have chronicled serious health and welfare concerns in waiver 

programs across the country. Because of continued growth in the numbers 

of people served through HCBS waiver programs and concerns about the 

quality of care, you asked us to review (1) trends in states’ use of such 

waivers, particularly for the elderly, (2) state quality assurance approaches 

for waivers serving the elderly, including available data on the quality of 

care provided to beneficiaries, and (3) the adequacy of CMS’s oversight of 

state waiver programs for the elderly as well as those for other target 

populations. 

To identify trends in states’ use of waivers, we analyzed CMS and state 

reports that contained data on waiver beneficiaries, expenditures, and 

services. To identify those waivers that serve the elderly, we compiled a 

list of HCBS waivers with “the aged” or “aged and disabled” as their target 

populations. Throughout this report, we refer to this universe of waivers 

as those “serving the elderly.” To assess state quality assurance activities 

for waivers serving the elderly, we analyzed (1) data on quality assurance 

approaches from state waiver applications and their most recent annual 

reports to CMS, (2) the oversight findings reported by states in their 

annual waiver reports, and (3) CMS regional office waiver reviews and 

state audits of waivers completed from October 1998 through May 2002.3

For a more in-depth perspective on states’ quality assurance approaches 

for waivers serving the elderly, we conducted structured interviews with 

state officials and staff in South Carolina, Texas, and Washington. We 

selected these states because they operate some of the largest HCBS 

waivers for the elderly that have been in effect for 5 years or longer. We 

did not attempt to assess the effectiveness of their quality assurance 

approaches. To determine the adequacy of CMS oversight of state waiver 

programs for the elderly as well as those for other target populations, we 

obtained relevant data from officials at CMS headquarters and conducted 

structured interviews with all 10 CMS regional offices on their waiver 

review activities and staffing as of June 2002. See appendix I for a detailed 

discussion of our scope and methodology. We conducted our review from 

November 2001 through June 2003 in accordance with generally accepted 

government auditing standards. 

 3

Our analysis of regional office waiver reviews is based on final reports. Reviews that did 

not have a final report were not included in our analysis. 
Page 3 GAO-03-576 Medicaid Home and Community-Based Waivers 

Total Medicaid spending for long-term care increased from $33.8 billion in 

fiscal year 1991 to $75.3 billion in fiscal year 2001, with a growing share 

spent on services through home and community-based waivers as an 

alternative to care in institutions such as nursing homes. Expenditures for 

services through HCBS waivers increased from $1.6 billion in fiscal year 

1991 to $14.4 billion in fiscal year 2001, growing from 5 percent of all 

Medicaid long-term care spending in fiscal year 1991 to 19 percent in fiscal 

year 2001. Over roughly the same time period, the number of HCBS 

waivers increased from 155 to 263, with 77 serving the elderly as of June 

2002. Every state except Arizona operates at least one waiver for the 

elderly. From 1992 to 1999, the total number of persons served through 

waivers nationwide nearly tripled to 688,152 and the number of 

beneficiaries served by waivers for the elderly more than doubled to 

377,083. In two states, Oregon and Washington, HCBS waiver services 

have replaced nursing homes as the dominant means of providing longterm care to the elderly under Medicaid. Nationally, average Medicaid 

expenditures per beneficiary in waivers serving the elderly increased from 

$3,622 in 1992 to $5,567 in 1999; average spending per beneficiary in 1999 

ranged from $1,208 in New York to $15,065 in Hawaii, reflecting 

differences in the type and amount of services provided under different 

waivers. 

No nationwide data are available on states’ quality assurance approaches 

or the status of quality of care for beneficiaries served by waivers for the 

elderly, but concerns have been identified about the quality of care 

provided under many of these waivers. Because CMS has not provided 

detailed guidance to states on federal requirements for HCBS quality 

assurance systems, the information available to CMS that should be 

considered before approving or renewing waivers is limited. Thus, state 

waiver applications and annual waiver reports that we reviewed for 

waivers serving the elderly often contained little or no information on 

state quality assurance approaches. For example, 11 applications for the 

15 largest waivers serving the elderly identified three or fewer specific 

quality assurance approaches, and none mentioned important approaches 

such as complaint systems or enforcement tools. Moreover, 18 of 52 state 

annual waiver reports that we reviewed contained no information on 

approaches used to help ensure quality. Where information was provided, 

the most frequently cited quality assurance approaches included (1) audits 

or reviews of case management agencies, (2) state agency reviews of 

waiver providers or direct-care staff, and (3) state licensure, certification, 

or standards for some waiver providers. Although CMS regional office and 

state reviews identified few if any specific cases of harm to waiver 

beneficiaries, the reviews for the majority of waivers serving the elderly 

Results in Brief 
Page 4 GAO-03-576 Medicaid Home and Community-Based Waivers 

with available relevant detail had one or more problems related to quality 

of care. Among the most commonly cited problems were (1) failure to 

provide authorized or necessary services, (2) inadequate assessment or 

documentation of beneficiaries’ care needs in the plan of care, and 

(3) inadequate case management. For example, one recent CMS regional 

office review found that more than one-fourth of a state’s waiver 

beneficiaries had received none of their authorized personal care services. 

However, the consequences for the beneficiaries were not identified in this 

review. Since many state waiver programs did not have a recent CMS 

review, as required, or the annual state waiver report lacked the relevant 

information, the extent of quality-of-care problems is unknown. 

CMS guidance to states and oversight of HCBS waivers is inadequate to 

ensure quality of care for waiver beneficiaries. CMS has not developed 

detailed guidance for states on appropriate quality assurance mechanisms 

as part of the waiver approval process, and initiatives under way to 

generate information on state quality assurance approaches do not 

address this problem. In addition, the agency has not fully complied with 

the statutory and regulatory requirements that condition the renewal of 

HCBS waivers on (1) states submitting required annual reports that 

include information on state quality assurance approaches and 

deficiencies identified through state monitoring and (2) CMS’s conducting 

and documenting periodic waiver reviews to determine whether states 

satisfied requirements for protecting the health and welfare of waiver 

beneficiaries. Many state annual waiver reports submitted to CMS regional 

offices for waivers serving the elderly were not timely and lacked required 

information on quality assurance and state monitoring. As of June 2002, 

228 HCBS waivers for all target populations had been in place for 3 years 

or longer and should have been reviewed by CMS regional offices. 

However, 42 waivers serving approximately 132,000 beneficiaries either 

had never been reviewed or were renewed without a review. For 36 

additional waivers, reviews were conducted, but the reports summarizing 

the findings were never finalized, raising a question as to whether any 

weaknesses were identified and, if so, had been corrected. CMS regional 

office personnel informed us that limited staff and travel resources 

impeded the timing and scope of reviews. While regions’ reviews included 

an examination of beneficiary records, we found that the reviews varied 

considerably in the number of beneficiary records reviewed and their 

method of determining the sample, raising a question about the extent to 

which findings could be generalized. In addition, they did not always 

include beneficiary interviews. Although updated in 2001, CMS guidance 

for conducting waiver reviews does not address key operational issues 
Page 5 GAO-03-576 Medicaid Home and Community-Based Waivers 

such as an adequate sample size or the sampling methodology to provide a 

basis for generalizing review findings. 

To better ensure that state quality assurance efforts are adequate to 

protect the health and welfare of HCBS waiver beneficiaries and to 

strengthen federal oversight, we are recommending that the CMS 

Administrator (1) establish more detailed criteria regarding the necessary 

components of an HCBS waiver quality assurance system, (2) require 

states to submit more specific information about their quality assurance 

approaches prior to waiver approval, (3) ensure that states provide 

sufficient and timely information in their annual waiver reports on their 

efforts to monitor quality, (4) develop guidance on the scope and 

methodology for federal reviews of state waiver programs, and (5) ensure 

allocation of sufficient resources for conducting thorough and timely 

reviews of quality in HCBS waivers and hold regional offices accountable 

for completing such reviews. Although CMS raised certain concerns about 

aspects of our report, such as the respective state and federal roles in 

quality assurance and the potential need for additional federal oversight 

resources, the agency generally concurred with our recommendations. 

The jointly funded federal-state Medicaid program is the primary source of 

financing for long-term care services.4

 About one-third of the total 

$228 billion in Medicaid spending in fiscal year 2001 was for long-term 

care in both institutional and community-based settings. States administer 

this program within broad federal rules and according to a state plan 

approved by CMS, the federal agency that oversees and administers 

Medicaid. Some services, such as nursing home care and home health 

care, are mandatory services that must be covered in any state that 

participates in Medicaid. Other services, such as personal care, are 

optional, which a state may choose to include in its state Medicaid plan 

but which then must be offered to all individuals statewide who meet its 

Medicaid eligibility criteria. States may also apply to CMS for a section 

1915(c) waiver to provide home and community-based services as an 

alternative to institutional care in a hospital, nursing home, or 

 4

While the purpose of Medicaid is to cover health care and long-term care for low-income 

persons, including persons who are aged, blind, or disabled, it has become a significant 

means of funding long-term care for many middle-income persons as well. Many of these 

persons qualify for Medicaid benefits after a period of “spend-down,” during which they 

deplete their own resources to pay for services. 

Background 
Page 6 GAO-03-576 Medicaid Home and Community-Based Waivers 

intermediate care facility for the mentally retarded (ICF/MR).5 If approved, 

HCBS waivers allow states to limit the availability of services 

geographically, to target services to specific populations or conditions, or 

to limit the number of persons served, actions not generally allowed for 

state plan services. States often operate multiple waivers serving different 

population groups, such as the elderly, persons with mental retardation or 

developmental disabilities, persons with physical disabilities, and children 

with special care needs. 

States determine the types of long-term care services they wish to offer 

under an HCBS waiver. Waivers may offer a variety of skilled services to 

only a few individuals with a particular condition, such as persons with 

traumatic brain injury, or they may offer only a few unskilled services to a 

large number of people, such as the aged or disabled.6

 The wide variety of 

services that may be available under waivers includes home modification, 

such as installing a wheelchair ramp, transportation, chore services, 

respite care, nursing services, personal care services, and caregiver 

training for family members. CMS’s waiver application form for states 

includes a list of home and community-based services with suggested 

definitions. States are free to include as many or as few of these as they 

wish, to include additional services, or to include different definitions of 

services from those supplied with the form. See appendix II for a list of 

services provided through the HCBS waivers serving the elderly and CMS’s 

suggested definitions of these services. 

To be eligible for waiver services, an individual must meet the state’s 

criteria for needing the level of care provided in an institution, such as a 

nursing home, and be able to receive care in the community at a cost 

 5

Federal statutory requirements for Medicaid that may be waived include 

(1) statewideness, which requires that services be available throughout the state, 

(2) comparability, which requires that all services be available to all eligible individuals, 

and (3) income and resource rules, which require states to use a single income and 

resource standard when determining eligibility for Medicaid, with the exception of 

institutional care. A waiver of this last requirement allows states to use more generous 

institutional eligibility criteria when determining financial eligibility for waiver services, 

thus extending eligibility to individuals in the community who would not otherwise qualify 

for Medicaid. 

6

A recent summary by the National Association of State Medicaid Directors identified 75 

discretely defined services in HCBS waiver applications as of June 2000. Individual waivers 

included as few as one service to as many as 25. 
Page 7 GAO-03-576 Medicaid Home and Community-Based Waivers 

generally not exceeding the cost of institutional care.7 States are 

responsible for determining the specific financial and functional eligibility 

criteria used, conducting the necessary screening and assessment, and 

arranging for services to be provided. Factors that states use in assessing 

functional eligibility for nursing home care and for waiver services include 

the individuals’ medical condition and their degree of physical or mental 

impairment. Other factors that states generally consider, and which may 

affect the states’ ability to provide care in the community at a cost not 

exceeding that of institutional care or to adequately protect beneficiaries’ 

health and welfare, include the mix of services needed by the individual, 

the availability of needed services, the cost of services, the need for home 

modification, and the availability of family members or other caregivers.8

In order to receive federal funds for waiver services, a state must submit 

an application to the Secretary of Health and Human Services (HHS) that 

identifies the target population, specifies the number of persons that will 

be served, and lists the services to be included. In addition, states are 

required to provide certain assurances that necessary safeguards have 

been taken to assure financial accountability and to protect the health and 

welfare of beneficiaries under the waiver.9

 Federal regulations specify that 

the state’s safeguards for the health and welfare of beneficiaries must 

include (1) adequate standards for all providers of waiver services and 

(2) assurance that any state licensure or certification requirements for 

providers of waiver services are met.10 CMS requires that a state’s waiver 

application include documentation regarding the standards applicable for 

each service provider. If the only requirement for a particular provider is 

 7

The average cost of community care under a waiver cannot exceed the average cost of 

care in an institution. 

8

For example, a person who requires 24-hour care and supervision and has no family or 

other support in the community may exceed the limits of what the waiver program allows 

in terms of personal care services. However, the same person who lives with a family 

caregiver might be eligible to receive several hours of personal care services each day as 

well as occasional respite care and caregiver training for the family. 

9

A state must provide several additional assurances, including the following: (1) the state 

will provide for an evaluation of the need for services for individuals, (2) beneficiaries will 

be informed of available alternatives to the waiver and provided a choice, (3) the average 

per capita expenditures for waiver beneficiaries will not exceed the amount that the state 

estimates would have been spent in the absence of the waiver, (4) absent the waiver, 

beneficiaries would receive the appropriate institutional care that they need, and (5) the 

state will provide information to CMS annually on the impact of the waiver. 

10See, 42 CFR 441.302(a). 
Page 8 GAO-03-576 Medicaid Home and Community-Based Waivers 

licensure or certification, the state must provide a citation to the 

applicable state statute or regulation. If other requirements apply, the state 

must specify the applicable standards that providers must meet and 

explain how the provider standards will ensure beneficiaries’ welfare. 

Finally, states must annually report on, among other things, how they 

implement, monitor, and enforce their health and welfare standards and 

the waiver’s impact on the health and welfare of beneficiaries. 

Initial waiver applications and amendments to initial waivers are reviewed 

and approved by CMS headquarters. CMS’s 10 regional offices have 

primary responsibility for reviewing and approving applications to renew 

waivers and amendments to renewed waivers. If CMS determines that a 

waiver application meets program requirements, including sufficient 

documentation to indicate that necessary safeguards are in place to 

protect the health and welfare of waiver beneficiaries, it will approve an 

initial waiver for a 3-year period. Subsequently, waivers may be extended 

for additional 5-year periods. 

Section 1915(c)(3) of the Social Security Act provides that, upon request 

of a state, HCBS waivers may be extended, unless the Secretary of HHS 

determines that the assurances provided during the preceding term have 

not been met.11 Among the assurances that the state makes are that 

necessary safeguards have been taken to protect the health and welfare of 

waiver participants and that the state will submit annual reports on the 

impact of the waiver on the type and amount of medical assistance 

provided under the state Medicaid plan and on the health and welfare of 

recipients. Regulations implementing section 1915(c) provide that an 

extension of a waiver will be granted unless (1) CMS’s review of the prior 

waiver period shows that the assurances the state made were not met and 

(2) the state fails to provide adequate documentation and assurances to 

justify an extension.12 In its explanation of this regulation, HCFA indicated 

that a review of the prior period is an indispensable part of the renewal 

process.13

 1142 U.S.C. 1396n(c)(3). Section 1915(c)(3) states "A waiver under this subsection [1915(c)] 

shall be for an initial term of three years and, upon the request of a State, shall be extended 

for additional five-year periods unless the Secretary determines that for the previous 

waiver period the assurances provided under paragraph (2) have not been met." 

1242 CFR 441.304(a). 

13See, 59 Fed. Reg. 37702, 37712 (1994) and 53 Fed. Reg. 19950 (1988). 
Page 9 GAO-03-576 Medicaid Home and Community-Based Waivers 

Reviews of waiver programs for which a renewal has been requested are, 

therefore, expected to occur at some point during the initial 3-year period, 

and at least once during each renewal cycle. CMS guidance on the reviews 

calls for on-site visits that include an examination of beneficiary and 

provider records as well as interviews with state officials. If a state’s 

efforts to protect the health and welfare of waiver beneficiaries are 

determined to be inadequate, CMS officials told us that the agency can 

either bar the state from enrolling any new waiver beneficiaries until 

corrective actions are taken or terminate the waiver. 

According to a recent CMS-sponsored review, oversight of waivers is often 

decentralized and fragmented among a variety of agencies and levels of 

government, and rarely does a single entity have accountability for the 

overall quality of care provided to waiver beneficiaries.14 Some waiver 

service providers are regulated by state licensing agencies, some are 

certified by private accreditation organizations, and others operate under 

terms of a contract or other agreement with a state agency. While the state 

Medicaid agency is ultimately accountable to the federal government for 

compliance with the requirements of the waivers, it may delegate 

administration of the waivers to state units on aging, mental health 

departments, or other departments or agencies with jurisdiction over a 

specific population or service. About one-third of waivers for the elderly 

are administered by an agency or department other than the Medicaid 

agency, most often the state unit on aging.15 These agencies may then 

contract with local networks, agencies, or providers to provide or arrange 

for beneficiary services. 

 14Maureen Booth and others, Literature Review: Quality Management and Improvement 

Practices for Home and Community-Based Care (Portland, Me.: University of Southern 

Maine, Edmund S. Muskie School of Public Service, Jan. 10, 2002). 

15Data gathered by the National Association of State Medicaid Directors identified the 

location of waiver administration for 56 HCBS waivers for the elderly as of March 18, 2002. 

Thirty-eight of these were administered either directly by the Medicaid agency or within the 

same department that houses the Medicaid agency. 
Page 10 GAO-03-576 Medicaid Home and Community-Based Waivers 

Medicaid-covered HCBS services have become a growing component of 

state long-term care systems, with most of the growth accounted for by 

substantial increases in the number of HCBS waivers and the beneficiaries 

served through waivers. In a few states, these waivers are beginning to 

replace nursing homes as the dominant means for providing long-term 

care to the elderly under Medicaid. Over the past 10 years, total Medicaid 

long-term care spending has more than doubled—from $33.8 billion in 

fiscal year 1991 to $75.3 billion in fiscal year 2001. However, the share of 

spending for institutional care declined from 86 to 71 percent, while the 

share spent for home and community-based care grew from 14 to 29 

percent. 

Most of the growth in home and community-based care spending under 

Medicaid can be accounted for by HCBS waivers. Total Medicaid home 

and community-based care spending grew from $4.8 billion in fiscal year 

1991 to $22.2 billion in fiscal year 2001, while spending for waiver services 

grew from $1.6 billion in fiscal year 1991 to $14.4 billion in fiscal year 2001. 

As shown in figure 1, waiver spending grew from 5 percent of all Medicaid 

long-term care spending in fiscal year 1991 to 19 percent in fiscal year 

2001. In all but two states—California and New York—and the District of 

Columbia, over one-half of Medicaid home and community-based services 

spending in fiscal year 2001 was through waivers, with a much smaller 

portion going to nonwaiver mandatory home health care or state plan 

optional personal care services.16 See appendix III for a summary of 

Medicaid long-term care expenditures by type and state. 

 16California and New York fund most of their Medicaid home and community-based 

services using the state plan personal care services option and home health benefit. The 

District of Columbia funds most of its Medicaid home and community-based care using the 

home health benefit. 

Waivers Are Vehicle 

for Dramatic Growth 

in Medicaid Home and 

Community-Based 

Services 
Page 11 GAO-03-576 Medicaid Home and Community-Based Waivers 

Figure 1: Percentage Distribution of Medicaid Long-Term Care Expenditures, Fiscal 

Years 1991 and 2001 

Note: GAO analysis of HCFA Form 64 data as reported by Brian Burwell, Steve Eiken, and Kate 

Sredl in Medicaid Long Term Care Expenditures in FY 2001 (The MEDSTAT Group, May 10, 2002). 

The figure includes data from 49 states and the District of Columbia. 

Both the number and size of HCBS waivers have grown considerably over 

the past 20 years. Every state except Arizona operates at least one such 

waiver for the elderly.17 In 1982, the first year of the waiver program, 6 

states operated HCBS waivers. By 1992, 48 states operated a total of 155 

HCBS waivers. As of June 2002, 49 states and the District of Columbia 

operated a total of 263 HCBS waivers, with 77 serving the elderly. The 

average waiver for the elderly served 3,305 Medicaid beneficiaries in 1992 

 17Arizona operates its Medicaid program as a demonstration project under a section 1115 

waiver, which includes long-term care as well as acute health care services. Under section 

1115 of the Social Security Act, the Secretary of HHS has broad authority to authorize 

experimental, pilot, or demonstration projects that are likely to promote objectives of 

certain federal programs, including Medicaid. 
Page 12 GAO-03-576 Medicaid Home and Community-Based Waivers 

and 5,892 beneficiaries in 1999.18 In 1999, 15 states served more than 10,000 

persons in their waivers for the elderly, an increase from only 4 states in 

1992. 

The total number of HCBS waiver beneficiaries—elderly and nonelderly—

nationwide nearly tripled from 235,580 in 1992 to 688,152 in 1999, the most 

recent year for which data were available. The number of beneficiaries 

served in waivers for the elderly more than doubled from 155,349 in 1992 

to 377,083 in 1999. Over this same period, the number of Medicaid 

beneficiaries who used some nursing home care during the year grew by 

only 2.5 percent from 1.57 million to 1.61 million beneficiaries. By 1999, 

waivers for the elderly were serving 19 percent of all Medicaid 

beneficiaries served either in a nursing home or through an HCBS waiver 

for the elderly, an increase from 9 percent in 1992.19 In two states, Oregon 

and Washington, more elderly and disabled Medicaid beneficiaries were 

served in HCBS waivers in 1999 than were served in nursing homes. 

Appendix IV includes the number of Medicaid beneficiaries served by 

HCBS waivers for the elderly and in nursing homes in each state. 

In 1999, the average per beneficiary expenditure in HCBS waivers serving 

the elderly was $5,567, an increase from $3,622 in 1992.20 However, the 

average per beneficiary expenditure for such waivers varied widely across 

states, reflecting differences in the type, number, and amount of services 

provided under waivers in different states. As shown in table 1, among 

those states with waivers serving the elderly in 1999, per beneficiary 

expenditures ranged from an average of $15,065 in Hawaii to $1,208 in 

 18Waiver beneficiary and expenditure data used in this analysis do not cover the same time 

periods. Waiver expenditure data are available through 2001. Data on waiver beneficiaries 

and services are available only through 1999. A CMS contractor recently developed a 

database for HCBS waivers. It is scheduled for installation at CMS in 2003, and it will 

include waiver beneficiary, service, and expenditure data from annual state reports. 

19The shift from institutional care to home and community-based services under Medicaid 

has been most significant for persons with mental retardation or developmental 

disabilities. In 1992, 28 percent of such beneficiaries who qualified for institutional care 

were served under HCBS waivers, and by 1999, that proportion had grown to 68 percent. 

20These average expenditures do not include expenditures for nonwaiver Medicaid services 

for these beneficiaries. In addition to waiver services, waiver beneficiaries are eligible for 

the full range of regular Medicaid state plan services. The overall cost to Medicaid for 

waiver beneficiaries will be higher than the amounts reported here, which only include 

those services provided under the waiver. In addition, Medicaid covers the cost of room 

and board for beneficiaries in nursing homes and other institutions, a benefit not generally 

covered for those receiving services under the waiver. 
Page 13 GAO-03-576 Medicaid Home and Community-Based Waivers 

New York. In Hawaii, one such waiver that provided an average of 85 

hours of personal assistance services per month to 91 percent of 

beneficiaries of that waiver had an average cost of $10,893 per beneficiary. 

A second Hawaii waiver that provided adult foster care, residential care, 

or assisted living for waiver beneficiaries had an average cost of $16,958 

per beneficiary. In contrast, New York’s waiver for the elderly did not 

include personal care or residential services; the primary benefits included 

social work services, personal emergency response systems, and homedelivered meals. Appendix V provides summary information on states’ 

HCBS waivers for the elderly, including per beneficiary expenditures. 

Table 1: States with Highest and Lowest per Beneficiary Expenditures for State 

HCBS Waivers Serving the Elderly, 1999 

State 

Average expenditures 

per beneficiary 

Number of 

 beneficiaries 

United States $5,567 377,083 

States with highest per beneficiary waiver spending 

Hawaii 15,065 923 

New Mexico 14,151 1,404 

North Carolina 13,778 11,159 

Alaska 12,015 712 

West Virginia 11,213 3,470 

States with lowest per beneficiary waiver spending 

Michigan 2,632 6,328 

Iowa 2,517 3,994 

Missouri 2,224 20,821 

Massachusetts 1,919 5,132 

New York 1,208 19,732 

Source: CMS. 

Notes: GAO analysis of annual state waiver report data (HCFA Form 372) as reported by Charlene 

Harrington in Medicaid 1915(c) Home and Community-Based Waivers: Program Data, 1992-1999

(San Francisco, Calif.: University of California, San Francisco, August 2001). 

All states in this table except Hawaii operated one waiver serving the elderly in 1999. Hawaii operated 

two waivers, one that served 288 beneficiaries at a cost of $10,893 per beneficiary and a second that 

served 635 beneficiaries at a cost of $16,958 per beneficiary. 
Page 14 GAO-03-576 Medicaid Home and Community-Based Waivers 

No comprehensive nationwide data are available on states’ quality 

assurance systems for or the quality of care provided through HCBS 

waivers, including those serving the elderly. In the absence of detailed 

federal requirements for HCBS quality assurance systems, states’ waiver 

applications and annual reports often contained little or no information on 

the mechanisms used to ensure quality, raising a question as to whether 

CMS had adequate information to approve or renew some waivers. More 

than half of the waivers serving the elderly for which we were able to 

obtain a CMS waiver oversight report, an annual state waiver report, or a 

state audit report identified oversight weaknesses and quality-of-care 

problems. Frequently cited quality-of-care problems included (1) failure to 

provide authorized or necessary services, (2) inadequate assessment or 

documentation of beneficiaries’ care needs in the plan of care, and 

(3) inadequate case management. We were unable to analyze over onethird of waivers serving the elderly because they lacked a recent regional 

office review, the annual state waiver report lacked the relevant 

information, or they were too new to have annual state reports. 

Although the state waiver applications and annual waiver reports we 

reviewed for waivers serving the elderly identified more than a dozen 

quality assurance approaches, many contained little or no information 

about how states ensure quality.21 For example, 11 applications for the 15 

largest waivers serving the elderly identified three or fewer quality 

assurance mechanisms and none of these 11 waivers mentioned important 

approaches, including complaint systems or sanctions. Eighteen of 52 

state annual waiver reports that we reviewed contained no information on 

the mechanisms used to help ensure quality. Moreover, when waiver 

applications and annual waiver reports did contain some information, the 

information was often incomplete. Our work in South Carolina, Texas, and 

Washington identified additional quality assurance mechanisms that were 

not listed in their waiver applications or annual reports, suggesting that 

such documents may understate the nature and extent of their oversight 

 21CMS uses the waiver applications, in part, to assess whether the proposed quality 

assurance mechanisms are sufficient to warrant waiver approval. HCFA Form 372, referred 

to in this report as the annual state waiver report, is a key source of information on how 

states have ensured quality until states renew their waivers. In addition to service use and 

spending data, the annual state waiver report includes information about the state’s 

process for monitoring waiver standards and safeguards and the findings of those 

monitoring processes—specifically, any deficiencies that were detected during the period 

covered by the report. 

Information on State 

Quality Assurance 

Approaches for 

Waivers Serving the 

Elderly Is Limited, but 

Quality Concerns 

Have Been Identified 

States Use a Variety of 

Waiver Quality Assurance 

Approaches in Waivers 

Serving the Elderly, Yet 

Some States Provide 

Limited or Incomplete 

Information to CMS 
Page 15 GAO-03-576 Medicaid Home and Community-Based Waivers 

approaches. As a result, CMS’s understanding of how these states ensure 

quality in the waivers may be incomplete. 

Information provided to CMS in state waiver applications and annual 

reports identified a variety of mechanisms used to protect the health and 

welfare of beneficiaries in waivers serving the elderly. Table 2 describes 14 

quality assurance approaches that states reported using in HCBS waivers 

for the elderly. Some of these approaches focus on the waiver beneficiary, 

such as case management or beneficiary satisfaction surveys. Other 

approaches are focused on providers, including licensure and inspections, 

corrective action plans, sanctions, and program manuals. States may 

require that certain providers be licensed or certified or meet other 

requirements contained in state laws or regulations. Such providers are 

generally subject to periodic inspections that may include a review of 

beneficiary records to determine whether the records meet program 

standards. A third set of quality assurance approaches focuses on waiver 

program operations, including internal or external evaluations of the 

waiver program, supervisory reviews of waiver beneficiary assessments 

and plans of care, and audits or reviews of case management agencies. 

Table 2: Quality Assurance Mechanisms States Reported Using in HCBS Waivers 

Serving the Elderly 

Quality assurance mechanism Description 

Beneficiary-oriented mechanisms 

Case management Case management includes assessing the 

beneficiary’s needs, developing the plan of care, 

arranging for the delivery of services, monitoring 

the beneficiary, and conducting periodic 

reassessments of the beneficiary’s needs and 

modifying the plan of care as needed. 

Beneficiary satisfaction surveys or 

interviews 

A survey instrument or other tool is used to 

measure waiver beneficiaries’ views about their 

waiver services and the extent to which services 

are meeting their long-term care needs. 

On-site visits of beneficiaries On-site visits may be conducted by program 

officials other than the beneficiary’s case 

manager to observe services being provided 

and gather information about the care provided. 

Complaint systems Systems to accept, investigate, and track the 

status of waiver beneficiaries’ or others’ 

complaints regarding the waiver program. 

Provider-oriented mechanisms 

Licensure, certification, or other state 

standards 

States require that certain providers be 

licensed, certified, or meet other requirements 

contained in state law or regulation. Providers 

are generally subject to periodic inspections that 

States Use a Variety of Quality 

Assurance Mechanisms 
Page 16 GAO-03-576 Medicaid Home and Community-Based Waivers 

Quality assurance mechanism Description 

include a review of beneficiary records to 

determine if they meet program standards. 

Provider or direct care staff reviews or 

audits 

State program officials conduct reviews of 

waiver providers or individual caregivers to 

determine whether waiver-specific requirements 

were met. Such reviews involve reviews of 

beneficiary records and other provider 

documentation as well as individual beneficiary 

interviews. 

Corrective action plans List of actions that the provider agrees to take to 

return to compliance with federal or state 

standards. 

Sanctions and penalties Depending on the severity of the violation, 

actions available to penalize the provider for not 

complying with federal or state standards. 

Training and technical assistance Ongoing, continuing education for case 

managers and waiver providers to ensure 

competency in delivering and monitoring the 

care of waiver beneficiaries. 

Program manuals Distribution of rules, policies, procedures, or 

standards to waiver providers. 

Program-oriented mechanisms 

Case management agency review or 

audit 

Reviews of agencies responsible for case 

management of the HCBS waiver, including a 

review of a sample of case managers’ records 

to ensure timeliness and completeness. 

Supervisory review of beneficiary 

assessments or plans of care 

Review conducted by case managers’ 

supervisors or at the state level of documents 

related to waiver beneficiaries’ assessed needs 

and identified services. 

Analysis of automated waiver program 

data 

Review or monitoring of electronic version of 

client data, such as assessments, 

reassessments, and care plans. 

Internal or external evaluation of 

waiver program 

Program review of the procedures for waiver 

beneficiary assessments, development of plans 

of care, and delivery of waiver services; review 

may be conducted by state agency officials or 

by contractor. 

Source: CMS. 

Note: GAO analysis of the most recent waiver application for the 15 largest HCBS waivers serving the 

elderly and the most recent annual state reports for 52 waivers serving the elderly submitted to CMS 

regional offices as of July 2002. 

Because CMS has not provided detailed guidance to states on federal 

requirements for HCBS quality assurance systems, the waiver applications 

and annual reports submitted by states to CMS for waivers serving the 

elderly often contained little or no information on state mechanisms for 

ensuring quality, raising a question as to whether CMS had adequate 

information to approve or renew some waivers. 

States Provide CMS Limited 

Information about Their 

Quality Assurance Approaches 
Page 17 GAO-03-576 Medicaid Home and Community-Based Waivers 

• Waiver applications. Our review of the most current waiver applications 

for the 15 largest waivers serving the elderly found that many states 

provided CMS limited information about how they plan to protect the 

health and welfare of beneficiaries.22 Eleven of the 15 states cited three or 

fewer quality assurance mechanisms. For example, New York’s application 

only contained information about the state licensure and certification 

requirements for its waiver services. None of these 11 applications 

included well-recognized quality assurance tools such as complaint 

systems, corrective action plans, sanctions, or beneficiary satisfaction 

surveys. The remaining 4 states each identified six to eight quality 

assurance approaches, including at least one of these four important tools. 

As shown in table 3, the two mechanisms most frequently cited by states 

were (1) licensure for some HCBS waiver providers, such as home health 

agencies and residential care providers, and (2) case management. 

Table 3: Quality Assurance Mechanisms Frequently Cited in Waiver Applications 

and Current Annual State Reports for HCBS Waivers Serving the Elderly 

Quality assurance mechanism 

Waiver application: 

number of states 

citing mechanism (n=15 

largest state waivers 

for the elderly) 

Annual state 

report: number 

of states citing 

mechanisma

(n=40 states) 

Case management agency reviews or 

audits 8 30

Waiver provider or direct-care staff 

reviews or audits 1 24

Licensure, certification, or other state 

standards 15 22

Waiver beneficiary satisfaction surveys 

or interviews 2 21

Case management 12 20

Training and technical assistance 0 20

On-site visits of waiver beneficiaries 1 16

Complaint systems 1 13

Supervisory review of waiver beneficiary 

assessments or plans of care 7 11

Corrective action plans 2 9

Sanctions and penalties 1 7

 22We reviewed waiver applications for the 15 largest state waivers for the elderly based on 

the number of beneficiaries. These waivers were from the following states: Colorado, 

Florida, Georgia, Illinois, Kentucky, Missouri, New York, North Carolina, Ohio, Oregon, 

South Carolina, Texas, Virginia, Washington, and Wisconsin. In 1999, these waivers ranged 

in size from 10,514 beneficiaries in Virginia to 27,978 beneficiaries in Texas. 
Page 18 GAO-03-576 Medicaid Home and Community-Based Waivers 

Quality assurance mechanism 

Waiver application: 

number of states 

citing mechanism (n=15 

largest state waivers 

for the elderly) 

Annual state 

report: number 

of states citing 

mechanisma

(n=40 states) 

Analysis of automated waiver program 

data 

1 4

Internal or external evaluations of waiver 

program 

0 4

Waiver program manuals 0 4

Source: CMS. 

Note: GAO analysis of the most recent waiver application for the 15 largest HCBS waivers serving the 

elderly and the most recent annual state reports for 52 waivers serving the elderly submitted to CMS 

regional offices as of July 2002. 

a

We reviewed 70 annual state waiver reports from 49 states and the District of Columbia. Fifty-two of 

these annual reports from 40 states contained some information about states’ monitoring processes 

for HCBS waivers serving the elderly. States may have more than one HCBS waiver serving the 

elderly. 

• Annual waiver reports. Compared to waiver applications, annual state 

waiver reports identified more quality assurance mechanisms for waivers 

serving the elderly. The quality assurance mechanisms states’ annual 

reports cited most frequently included (1) audits of case management 

agencies, (2) reviews of provider or direct-care staff, (3) licensure and 

certification of providers, (4) beneficiary satisfaction surveys or 

interviews, (5) case management, and (6) training and technical 

assistance. As shown in table 3, these six mechanisms were mentioned by 

at least half of the 40 states that provided such information.23 However, as 

was the case with most of the 15 waiver applications we reviewed, 

complaint systems, corrective action plans, and sanctions were identified 

less frequently. For example, only 13 of the 40 states identified complaint 

systems for waivers serving elderly beneficiaries as a monitoring tool in 

their annual waiver reports.24 Responding to beneficiary complaints is a 

key element in protecting vulnerable nursing home residents and home 

 23As of June 2002, there were 77 waivers serving the elderly. However, our analysis includes 

2 additional waivers for the elderly that had been terminated or not renewed as of that date 

because the states were able to provide us with their most recent annual report. 

24Only 1 of the 15 waiver applications we reviewed indicated that the state had a complaint 

system for the providers under its waiver. For a discussion of the role of complaint 

systems, see U.S. General Accounting Office, Nursing Homes: Sustained Efforts Are 

Essential to Realize Potential of the Quality Initiatives, GAO/HEHS-00-197 (Washington, 

D.C.: Sept. 28, 2000) and U.S. General Accounting Office, Medicare Home Health Agencies: 

Weaknesses in Federal and State Oversight Mask Potential Quality Issues, GAO-02-382

(Washington, D.C.: July 19, 2002). 
Page 19 GAO-03-576 Medicaid Home and Community-Based Waivers 

health beneficiaries. Moreover, 18 of the elderly waiver reports (26 

percent) from 12 states did not include a description of the process for 

monitoring the standards and safeguards under the waiver, as required on 

the reporting form. 

State officials in South Carolina, Texas, and Washington informed us they 

use a wider range of quality assurance mechanisms in their waiver 

programs than were described in either their waiver application or their 

annual state waiver report. Officials in Washington informed us they use 

12 of the 14 mechanisms identified in table 3, yet they included only 2 of 

these on their application and 3 in their most recent annual report. For 

example, Washington operates a complaint system for waiver providers 

but did not refer to this approach in its waiver application or annual 

report. On the other hand, only Washington included reviews or audits of 

case managers or case management agencies in its application or annual 

report, yet all three states provided information on their use of this quality 

assurance tool during our interviews. States’ formal reports to CMS on 

their quality assurance mechanisms may therefore understate the nature 

and extent of their oversight approaches. 

Although information on the quality of care provided in the 79 waiver 

programs serving the elderly is limited, state oversight problems were 

identified by CMS regional offices or states in 15 of 23 waivers and qualityof-care problems in 36 of 51waivers that we were able to examine.25 We 

were unable to analyze findings related to 28 waivers serving the elderly 

for various reasons: they lacked a current regional office review or a 

waiver review report was never finalized,26 the annual state waiver report 

lacked the relevant information, or the waivers were too new to have an 

annual state report. Because of incomplete information and the absence of 

 25Our analysis of state oversight issues is based on 23 discrete waivers that had either a 

regional office review or a state audit. State auditors are responsible for reviewing state 

programs and may include Medicaid HCBS waiver programs as a part of these audits. 

Annual state waiver reports do not address state oversight weaknesses. Our analysis of 

quality-of-care issues is based on 51 discrete waivers that had either a regional office 

review or an annual state report. As of June 2002, there were 77 waivers serving the elderly. 

However, our analysis of state oversight and quality-of-care problems included 2 additional 

waivers for the elderly that had been terminated or not renewed as of that date because 

they had had a regional office review during the October 1998 through May 2002 time 

period we examined. 

26Regional office review reports that did not have a final report were not included in our 

analysis. 

State Oversight and 

Quality Issues in Waivers 

Serving the Elderly Have 

Been Identified by CMS 

Regional Offices and 

States 
Page 20 GAO-03-576 Medicaid Home and Community-Based Waivers 

current reviews for many of the active waivers, the extent of quality-ofcare problems is unknown. 

CMS regional office reviews or state audits identified weaknesses in state 

oversight for waivers serving the elderly in 15 of the 23 waivers we 

examined. In some cases, the waiver programs did not have essential 

oversight systems or processes in place. For example, in the case of a 

Virginia assisted living waiver that had over 1,250 beneficiaries, the 

Philadelphia regional office found several state oversight problems, 

including (1) no system in place to track the completion of the required 

annual resident assessments, (2) insufficient monitoring to ensure that 

beneficiaries were cared for in settings able to meet their needs, 

(3) insufficient monitoring to ensure that state standards were met for 

basic facility safety and hygiene, and (4) failure to inspect medication 

administration records sufficiently to ensure that medication was being 

dispensed safely and by qualified staff. The regional office identified 

serious lapses in Virginia’s oversight of the waiver and the protection of 

beneficiaries, resulting in both medical and physical neglect of waiver 

beneficiaries. On the basis of the regional office review findings, HCFA 

allowed the waiver to expire in March 2000. In other cases, states may 

have had an oversight system or process in place, but they were 

determined to be inadequate. Five state audit agency reports we reviewed 

identified inadequate monitoring systems in state waiver programs. For 

example, Connecticut had a policy in place for monitoring and evaluating 

its HCBS waiver program, but, from January 2000 through March 2001 it 

conducted no quality assurance reviews of the agencies it contracted with 

to coordinate and manage services for waiver beneficiaries. 

CMS regional office reviews and states’ annual waiver reports identified 

quality-of-care related problems in 36 of 51 HCBS waiver programs for the 

elderly that we were able to examine. Specifically, they found weaknesses 

in the delivery of key elements of home and community-based services 

that could affect waiver beneficiaries’ health and welfare (see table 4). 

Typically, the reports did not provide sufficient detail to demonstrate the 

impact of these weaknesses on waiver beneficiaries. Consequently, few, if 

any, specific cases of beneficiary harm were identified. 

State Oversight Weaknesses 

Quality-of-Care Related 

Problems 
Page 21 GAO-03-576 Medicaid Home and Community-Based Waivers 

Table 4: Frequently Cited Quality-of-Care Problems Identified by CMS Regional Offices or States in HCBS Waivers Serving the 

Elderly 

Problem area Example 

Number of 51 

waivers in which

 problem was identified

Provision of authorized 

or necessary services 

Beneficiary not receiving services identified as being needed. 20

Plan of care Beneficiary’s care needs not addressed in plan of care. 20

Case management Case manager for HCBS waiver program not providing ongoing 

assessment and monitoring of waiver beneficiaries or 

inadequate follow-up of changes in beneficiaries’ care needs. 

20

Staffing Insufficient number of staff to provide adequate care or staff not 

having appropriate credentials or training to provide care. 

12

Assessment Beneficiary’s needs not assessed or reassessment not 

completed in a timely manner. 

11

Documentation of service delivery Incomplete record of waiver services provided to beneficiary. 8

Training Case managers identified as needing additional training on 

Medicaid eligibility. 

8

Quality assurance or 

quality of care 

HCBS waiver program lacked a formal quality assurance 

system; poor quality of care or services were identified. 

7

Medication Unable to document that facilities providing care to waiver 

beneficiaries dispensed medication safely and by qualified staff. 

4

Source: CMS. 

Notes: GAO analysis of CMS regional office final waiver review reports for HCBS waivers serving the 

elderly issued from October 1998 to May 2002 and the most recent annual state waiver reports for 51 

waivers serving the elderly. 

Fifteen waivers serving the elderly had no problems identified in their regional office reviews or 

annual state reports; the remaining 36 waivers had problems related to quality of care. When both the 

CMS regional office and the state identified a waiver as having the same type of problem, we counted 

that problem only once. 

The most frequently identified quality-of-care problems in waivers serving 

the elderly involved failure to provide authorized or necessary services, 

inadequate assessment or documentation of beneficiaries’ care needs in 

the plan of care, and inadequate case management. 

• Provision of authorized or necessary services. Identified problems 

included (1) services identified in plans of care not rendered, 

(2) inadequate nutrition provided to waiver beneficiaries, and 

(3) discontinuation of services without adequate notice to beneficiaries. 

For example, CMS’s Dallas regional office found that significant numbers 

of Oklahoma waiver beneficiaries did not receive personal care services 

from their direct-care provider—4,303 beneficiaries (27 percent) received 

none of their authorized personal care services and 7,773 beneficiaries (49 

percent) received only half of their authorized services. While the 

consequences for beneficiaries were not identified in this review, failure to 
Page 22 GAO-03-576 Medicaid Home and Community-Based Waivers 

provide authorized needed services may result in harm and could affect 

the continued ability of beneficiaries to be cared for at home. 

• Plan of care. Issues included plans of care that (1) insufficiently addressed 

the needs of waiver beneficiaries, (2) were not completed or updated 

appropriately, and (3) were missing from beneficiaries’ files. In the review 

of one of the Florida waivers, CMS’s Atlanta regional office staff found 

several instances where needs identified through individual assessments, 

including significant changes in waiver beneficiaries’ conditions, were not 

addressed in the plan of care, a situation that could lead to beneficiaries 

not receiving the necessary services. Without an appropriate plan of care 

to direct the type and amount of services to be delivered, the waiver 

beneficiary may not receive an adequate level of care. 

• Case management. Examples of case management problems included case 

managers who (1) were unaware of beneficiaries having lapses in delivery 

of care, (2) were not always aware of procedures or protocols for 

reporting abuse, neglect, or exploitation, (3) failed to complete resident 

assessments—service plans were either incomplete or inappropriate, and 

updates to plans of care were late, or (4) did not always appear to have a 

clear understanding of service definitions or requirements of the waiver or 

Medicaid program. 

CMS has not developed detailed guidance for states on appropriate quality 

assurance approaches as part of the initial waiver approval process. 

Moreover, although CMS oversight has identified some quality problems, it 

does not adequately monitor HCBS waiver programs or the quality of care 

provided to waiver beneficiaries for waivers serving the elderly as well as 

those serving other target populations.27 CMS does not hold its regional 

offices accountable for conducting and documenting periodic waiver 

reviews, nor does CMS hold states accountable for submitting annual 

reports on the status of quality in their waivers. As of June 2002, about 

one-fifth of the 228 waivers in place for 3 years or more had either never 

been reviewed or were renewed without a review.28 We found that the 

reviews varied considerably in the number of beneficiary records 

 27Because CMS regional offices have responsibility for oversight of all HCBS waivers, 

including those serving the elderly, our analysis included all HCBS waivers as of June 2002. 

28As of June 2002, CMS regional offices had oversight responsibility for 263 HCBS waivers. 

These waivers included other population groups as well as those serving the elderly. Of this 

total, 228 had been in place for 3 years or more and should have had a regional office 

review; 70 of these 228 waivers served the elderly. Nine waivers serving the elderly had not 

been in place for 3 years or more and therefore were not included in this analysis. 

CMS Guidance to 

States and Oversight 

Of HCBS Waivers Are 

Inadequate to Ensure 

Quality Care 
Page 23 GAO-03-576 Medicaid Home and Community-Based Waivers 

examined and the method of determining the sample, potentially limiting 

the generalizability of findings. According to CMS regional office staff, the 

allocation of staff resources and travel funding levels have at times 

impeded the scope and timing of their reviews. In addition, some regional 

office staff told us that limited travel funds have resulted in the 

substitution of more limited desk reviews for on-site visits and in the 

conduct of reviews with one staff member when two would have been 

preferable. 

CMS has a number of initiatives under way to generate information and 

dialogue on quality assurance approaches, but the agency’s initiatives stop 

short of (1) requiring states to submit detailed information on their quality 

assurance approaches when applying for a waiver or (2) stipulating the 

necessary components for an acceptable quality assurance system. CMS 

recognizes that insufficient attention has been given to the various 

mechanisms that states could and should use to monitor quality in their 

waiver programs. As described in appendix VI, the initiatives CMS has 

under way include identification of strategies that states are currently 

using to monitor and improve quality in home and community-based care, 

distribution of a guide on quality improvement and assessment 

mechanisms for states and regional offices, and provision of a variety of 

technical assistance and resources to states. The agency also has 

implemented a new HCBS waiver quality review protocol for use by 

regional offices in assessing whether state waivers should be renewed.29

Regional office staff told us that some states have begun to modify their 

approaches to quality assurance in HCBS waivers based on the use of the 

new waiver review protocol. For example, Washington officials 

established a new quality assurance unit within the agency that oversees 

its waiver for the elderly. In May 2002, CMS also introduced a voluntary 

application template for its new consumer-directed HCBS waiver that asks 

for a detailed description of states’ quality assurance and improvement 

programs, including (1) the frequency of quality assurance activities, 

(2) the dimensions monitored, (3) the qualifications of quality assurance 

staff, (4) the process for identifying problems, including sampling 

 29This protocol was developed to provide a standardized and comprehensive set of 

procedures for regional office staff to follow when conducting periodic waiver reviews. See 

Department of Health and Human Services, HCFA, HCFA Regional Office Protocol for 

Conducting Full Reviews of State Medicaid Home and Community-Based Services 

Waiver Programs (Washington, D.C.: Department of Health and Human Services, Dec. 20, 

2000). 

CMS Lacks Detailed 

Guidance for States on the 

Necessary Components of 

a Quality Assurance 

System 
Page 24 GAO-03-576 Medicaid Home and Community-Based Waivers 

methodologies, (5) provisions for addressing problems in a timely manner, 

and (6) the system for handling critical incidents or events. While these 

CMS activities are intended to facilitate the development of HCBS-related 

quality assurance approaches, they do not constitute a consistent set of 

minimum requirements and guidance for states’ use to obtain approval for 

their HCBS programs. 

In addition to the lack of detailed guidance for states, CMS is not holding 

its own regional offices or states accountable for oversight of the quality of 

care provided to individuals served under HCBS waivers. CMS regional 

offices are expected to conduct periodic waiver reviews to determine 

whether states are protecting the health and welfare of waiver 

beneficiaries. Annual state reports are required by statute, and CMS 

regulations indicate that they are intended to play a key role in 

determining whether a waiver should be renewed.30 We found that regional 

offices are neither conducting waiver reviews prior to renewal nor 

obtaining complete annual state reports in a timely manner. As a result, 

CMS has not fully complied with the statutory and regulatory requirements 

that condition the renewal of HCBS waivers on states fulfilling their 

assurances that necessary safeguards are in place to protect the health and 

welfare of waiver beneficiaries. 

Most CMS regional offices have not conducted timely reviews of the state 

agencies administering waivers serving the elderly and other target 

populations or completed reports to document the results of their reviews. 

Periodic on-site reviews are used to determine, among other things, 

whether a state is ensuring the health and welfare of waiver beneficiaries. 

Guidance from CMS headquarters instructs the regional offices to conduct 

reviews before the first renewal of a waiver at the end of 3 years and 

within 5 years for subsequent waiver renewals. 

Eighteen percent of all HCBS waivers (42 of 228) that have been in place 

for 3 years or more as of June 2002 either have never been reviewed by the 

regional offices or had not been reviewed prior to their last waiver 

renewal. Approximately 132,000 beneficiaries were served by these 42 

waivers in 1999. Fourteen of the 42 waivers—serving approximately 37,000 

waiver beneficiaries in 1999—have had 10 or more years elapse without a 

regional office review (see table 5). CMS’s Dallas regional office was 

 30See, 50 Fed. Reg. 10013, 10016-17 (1985). 

CMS Is Not Holding 

Regional Offices or States 

Accountable for Oversight 

of HCBS Waiver Quality 

CMS Regional Offices Often 

Are Not Conducting Timely 

Reviews of State HCBS Waivers 
Page 25 GAO-03-576 Medicaid Home and Community-Based Waivers 

responsible for 9 of these 14 waivers. Over a 10-year period, a regional 

office should have conducted at least two reviews for each waiver. The 

New Mexico AIDS Waiver, initially approved in June 1987, has been in 

place the longest without ever being reviewed—15 years. CMS officials 

were aware that regional offices had not reviewed some waivers but were 

unaware of the extent of the problem. 

Table 5: HCBS Waivers That Had 10 Years or More Elapse without Ever Having a Regional Office Review or without a Review 

Prior to the Last Waiver Renewal, as of June 2002 

State Target population 

Number of 

waiver 

beneficiariesa

Number of 

years without a 

CMS regional 

office review

No regional office waiver review ever conducted 

Dallas regional office 

New Mexico Persons with AIDS 60 15

Oklahoma Persons with mental retardation 2,550b 14

Texas Medically dependent children 895b 14

Louisiana Elderly and persons with disabilities 393 12

New Mexico Medically fragile children 152 11

Texas Persons with mental retardation and 

related conditions 

1,047 11

Texas Persons with mental retardation 4,956b 10

Texas Persons with mental retardation 224b 10

Louisiana Elderly and persons with disabilities 113 10

Seattle regional office 

Idaho Elderly and persons with disabilities 1,000 12

Idaho Persons with mental retardation and 

developmental disabilities 

512 12

No regional office waiver review conducted prior to last waiver renewal 

Kansas City regional office 

Iowa Elderly 3,994 11

Missouri Elderly 20,821 10

San Francisco regional office 

Hawaii Persons with AIDS 66 12

Source: CMS. 

Note: GAO analysis of data provided by CMS, June 2002. 

a

The number of HCBS waiver beneficiaries is based on 1999 HCFA Form 372 data. See Harrington, 

Aug. 2001. 

b

Author’s estimate. See Harrington, Aug. 2001. 
Page 26 GAO-03-576 Medicaid Home and Community-Based Waivers 

As of June 2002, based on an analysis of the most recent regional office 

review that occurred prior to October 2001 for each of the waivers, we 

found that 23 percent of the review reports (36 of 158) in over half of the 

regional offices had not been finalized.31 CMS requires its regional offices 

to prepare a final report on each HCBS review to document their findings, 

recommendations, and the state response. Without such a final report, 

there is no formal document to indicate whether a state has fulfilled the 

required assurances, including those related to the health and welfare of 

waiver beneficiaries. The New York regional office did not finalize 11 of its 

12 reviews, dating back to 1998, and the San Francisco regional office did 

not finalize 7 of its 13 reviews, 1 of which was for a review that occurred in 

1990. Without a final report documenting the review results, CMS cannot 

be assured that, if problems were identified, they were appropriately 

addressed. 

Many state annual waiver reports submitted to CMS regional offices are 

neither timely nor complete. During the interval between regional office 

reviews, the required annual state waiver reports provide key information 

on how states monitor beneficiaries’ quality of care and on any quality-ofcare related problems. According to regional office officials, states 

routinely fail to submit these annual reports within the required time 

frame—within 6 months after the period covered. In August 2000, officials 

in CMS’s Philadelphia regional office reported that they had current 

annual state reports for less than half (11 of 28) of the waiver programs in 

their region. Our review of the most recent annual state reports for 70 of 

79 HCBS waivers serving the elderly confirmed that producing these 

reports remains a problem: (1) reports for more than a third of the waivers 

were at least 1 year late—the most recent report from one of Louisiana’s 

HCBS waivers was for calendar year 1997, (2) reports for approximately 

one-fourth of the waivers provided no information on whether deficiencies 

had been identified through the monitoring processes,32 and (3) five 

reports indicated that deficiencies had been identified but provided no 

 31In our analysis, we included only those reviews that had taken place prior to October 

2001, allowing 9 months from the time the regional office conducted the waiver review to 

final report issuance—from October 2001 to June 2002. CMS allows up to 4 months from 

the time the regional office completes all waiver review activities to issuance of a final 

report documenting the review findings. 

32As noted earlier, about one-quarter of annual state reports for waivers serving the elderly 

did not include information requested concerning the approaches used to monitor quality 

assurance. 

CMS Does Not Obtain Timely 

and Complete State Annual 

Waiver Reports 
Page 27 GAO-03-576 Medicaid Home and Community-Based Waivers 

additional information about the nature of or response to the problems. 33

CMS headquarters has no central repository for annual state reports but is 

in the process of establishing a centralized database for state report 

information sometime in 2003, a development that could facilitate ongoing 

monitoring of the timeliness and completeness of these reports. 

Our analysis of CMS’s oversight activities for the 15 largest HCBS waivers 

serving the elderly demonstrates the extent of oversight weaknesses. 

Overall, 8 of the 10 CMS regional offices provided inadequate oversight for 

13 of these 15 largest state waivers for the elderly, which, in 1999, served 

about 215,000 beneficiaries—over half (57 percent) of the total elderly 

waiver beneficiary population at that time (see table 6). We found that 

• Four of the 15 HCBS waivers were not reviewed in a timely manner by the 

CMS regional office—none of the 4 had reviews for 8 or more years and 

yet were renewed.34

• Four of the 15 waivers had no waiver review final report completed by the 

regional office. Two of the reviews occurred in 1999, and for the remaining 

2 waivers the regional office could not tell us the date of the reviews or 

whether a final report was available. 

• Four of the 15 waivers lacked a timely annual state report to the regional 

office. As of April 2002, the most recent annual report for these 4 waivers 

was either for the waiver period ending August 1999 (1 waiver) or 

September 2000 (3 waivers). 

• Seven of the 15 waivers had annual state reports that were incomplete 

because they either lacked information on their quality assurance 

mechanisms or on whether deficiencies had been identified. 

 33Eight of the remaining 9 waivers were new and had not yet had an annual report 

submitted. The CMS Atlanta regional office did not provide a current annual report for 1 

waiver. As of June 2002, there were 77 waivers serving the elderly. However, our analysis 

includes 2 additional waivers for the elderly that had been terminated or not renewed as of 

that date because the state was able to provide us with their most recent annual report. 

34These 4 waivers are a subset of the 42 HCBS waivers in place for 3 years or more that 

either were never reviewed by the regional offices or were not reviewed prior to their last 

renewal. 

Extent of Oversight 

Weaknesses Evident in 15 

Largest Waivers Serving the 

Elderly 
Page 28 GAO-03-576 Medicaid Home and Community-Based Waivers 

Table 6: Status of CMS and State Monitoring for the 15 Largest HCBS Waivers Serving the Elderly 

State 

Number of waiver 

beneficiariesa

CMS waiver review not 

timely or report not 

finalized 

Annual state report not 

timely or documentation 

insufficientb

New York regional office 

New York 19,732 X X 

Philadelphia regional office 

Virginia 10,514 X 

Atlanta regional office 

South Carolina 14,361 Xc X 

Georgia 14,018 X 

Florida 13,762 X 

Kentucky 13,339 X 

North Carolina 11,159 Xc X 

Chicago regional office 

Ohio 26,135 

Illinois 17,396dX X 

Wisconsin 13,900 X 

Dallas regional office 

Texas 27,978 X X 

Kansas City regional office 

Missouri 20,821 X 

Denver regional office 

Colorado 11,481 X 

Seattle regional office 

Oregon 26,410 X 

Washington 25,718 

Source: CMS. 

Note: GAO analysis of data provided by CMS, June 2002 and the most recent annual state waiver 

reports. The 15 largest HCBS waivers serving the elderly are based on the number of beneficiaries. 

a

The number of HCBS waiver beneficiaries is based on 1999 HCFA Form 372 data. See Harrington, 

Aug. 2001. 

b

The annual report is required by statute and CMS directs states to (1) submit such reports within 6 

months after the period covered, and (2) include information on how the state implements, monitors, 

and enforces its health and welfare standards and the waiver’s impact on the health and welfare of 

beneficiaries. 

c

The CMS regional office could not provide the date that the last waiver review was conducted or 

specify whether a report had been finalized. 

d

Author’s estimate. See Harrington, Aug, 2001. 
Page 29 GAO-03-576 Medicaid Home and Community-Based Waivers 

The limited scope and duration of periodic regional office waiver reviews 

raise a question about the confidence that can be placed in findings about 

the health and welfare of waiver beneficiaries. CMS regional offices 

conduct reviews using guidance provided by headquarters. The guidance 

instructs regional office staff to review beneficiary records; interview 

waiver beneficiaries, primary direct-care staff of waiver providers, and 

case managers; and observe waiver beneficiaries and the interaction 

between the beneficiary and direct-care staff. This guidance was updated 

in January 2001 when use of the new HCBS waiver quality review protocol 

became mandatory. However, the new protocol does not address 

important operational issues such as 

• an adequate sample size or sampling methodology for the beneficiary 

record reviews and interviews to provide a basis for generalizing the 

review findings; 

• whether the sample should be stratified according to the different groups 

served under the waiver (i.e., for a waiver serving both the elderly and the 

disabled, selecting a stratified sample based on the proportion of persons 

aged 65 and over and those aged 18 to 64 with disabilities); and 

• the appropriate duration of an on-site review, taking into consideration the 

number of sites and beneficiaries covered in the waiver. 

Our analysis of regional office review reports for 21 HCBS waivers serving 

the elderly found that the reviews varied considerably in the number of 

beneficiary records evaluated and their method of determining the sample, 

potentially limiting their ability to generalize findings from the sample to 

the universe of waiver beneficiaries.35 Specifically, we found a wide range 

of sample sizes in 15 of the 21 regional office reviews that included such 

information. The sample sizes for record reviews ranged from 14 

beneficiaries (of 73 served) in the Boston regional office review of the 

Vermont waiver to 100 beneficiaries (of 24,000 served) in the Seattle 

regional office review of the Washington waiver. (See app. VII for a 

summary of the sample sizes in the regional office reviews.) Eleven of the 

15 CMS waiver review reports included information on the specific 

number of beneficiaries interviewed or observed during the review; 

however, we could not determine whether beneficiary interviews or 

observations had been conducted in other waiver reviews. The method by 

which the beneficiary record review samples were selected varied, with 

 35We requested that regional offices provide us with final reports for HCBS waivers serving 

the elderly issued from October 1998 to May 2002. Eight of the 21 reviews we analyzed 

were completed after CMS’s new HCBS waiver quality review protocol was implemented. 

Scope and Duration of 

Regional Office Waiver 

Reviews Are Limited 
Page 30 GAO-03-576 Medicaid Home and Community-Based Waivers 

some regional offices using randomized sampling methods, some basing 

their sample on geographic location, and others reporting no method of 

sample selection. 

For most of these same 15 waivers serving the elderly, we found that the 

regional staff typically spent 5 days conducting the waiver review—

regardless of the number of waiver beneficiary records sampled or the 

overall size of the waiver. However, the Seattle regional office staff 

conducted only three reviews in the past 4 years, targeting its largest 

HCBS waivers. For example, the regional office has spent 3 to 4 weeks per 

waiver for the on-site portion of the review and another week for state 

agency interviews and review of documents. Generally, the number of 

beneficiary records reviewed and beneficiaries interviewed is dependent 

on (1) the number of days allocated to the waiver review by a regional 

office and (2) the number of regional office staff members available. 

The limited number of assigned staff and available clinical specialists, 

coupled with insufficient travel funds allocated to regional office oversight 

of HCBS waivers, have contributed to the timeliness and scope problems 

we identified. According to regional offices, the level of attention given to 

HCBS waiver oversight, including periodic reviews when waivers come up 

for renewal, is at the discretion of regional office management and 

competes with other workload priorities.36 In August 2000, some regional 

office officials formally communicated to HCFA headquarters their 

concern that the agency was not devoting sufficient resources to properly 

monitor the quality of HCBS waiver programs. Regional office officials 

responsible for waiver oversight told us that the number of staff available 

for waiver oversight has not kept pace with the growth in the number of 

waivers and beneficiaries served and that resource issues remain a key 

challenge for waiver oversight. 

 36Headquarters officials are responsible for establishing waiver policy and the 10 regional 

offices have responsibility for waiver oversight. Both headquarters and the regional offices 

answer separately to the Administrator without any formal reporting links. In earlier work, 

we reported that these organizational reporting lines complicated coordination and 

communication, weakened oversight, and blurred accountability when problems arose. See 

U.S. General Accounting Office, Medicare Contractors: Further Improvement Needed in 

Headquarters and Regional Office Oversight, GAO/HEHS-00-46 (Washington, D.C.: Mar. 

23, 2000) and U.S. General Accounting Office, Nursing Homes: Sustained Efforts Are 

Essential to Realize Potential of the Quality Initiatives, GAO/HEHS-00-197 (Washington, 

D.C.: Sept. 28, 2000). 

Limited Regional Office 

Resources Available for 

Oversight of HCBS Waivers 
Page 31 GAO-03-576 Medicaid Home and Community-Based Waivers 

We found that CMS regional offices differed substantially in the number of 

staff assigned to waiver oversight and the extent to which staff with 

clinical or program expertise were assigned to waiver oversight. 

According to Dallas, Denver, and Philadelphia regional office staff, the 

level of resources allocated by the regional offices for such reviews 

dictated the number of waiver beneficiary records reviewed or beneficiary 

interviews conducted. Six of the 10 regional offices had two or fewer fulltime-equivalent (FTE) staff assigned to monitoring HCBS waivers (see 

table 7).37 Moreover, we found that the number of regional office staff 

assigned to monitoring HCBS waivers bore little relationship to the waiver 

workload. For example, the Chicago regional office had six FTE staff to 

monitor 34 HCBS waivers with 131,902 waiver beneficiaries, while the 

Dallas regional office had one-and-a-half FTE staff for 28 HCBS waivers 

with 63,614 waiver beneficiaries. Until a few years ago, one person in the 

Philadelphia regional office was assigned to oversee HCBS waivers—

despite growth in the number and size of the region’s HCBS waivers over 

the past decade.38

 37We asked the regional offices to distinguish between staff assigned to HCBS waiver 

oversight and staff who may be temporarily assigned, such as those borrowed from another 

division for their specific expertise. 

38In 1992, the Philadelphia regional office was responsible for oversight of 16 waivers 

serving approximately 17,000 waiver beneficiaries. By 1999, the regional office had 

responsibility for 23 waivers serving over 48,500 waiver beneficiaries. As of 2002, the 

regional office’s total number of waivers had grown to 33. Since early 2000, this regional 

office has hired or reassigned approximately three additional staff to focus on waiver 

oversight. 
Page 32 GAO-03-576 Medicaid Home and Community-Based Waivers 

Table 7: Number and Specialty of CMS Regional Office Staff Assigned to Oversee HCBS Waivers 

CMS regional office 

Number of HCBS 

waivers (number of 

waivers for the elderly )

Number of HCBS 

waiver beneficiariesa

(number of elderly 

waiver beneficiaries)

Number of FTE 

staff assigned to 

oversee waivers 

Specialist 

staff assigned to 

oversee waivers 

Boston 26 (9) 45,390 (20,190) 1 No 

New York 15 (3) 69,390 (24,319) <2bNo 

Philadelphia 33 (8) 48,537 (18,554) 4.1 No 

Atlanta 43 (15) 122,120 (78,669) <3.5bYesc

Chicago 34 (10) 131,902 (73,935) 6 No 

Dallas 28 (9) 63,614 (47,454) 1.5 No 

Kansas City 23 (4) 59,253 (33,873) 1.4 Yesd

Denver 29 (7) 32,866 (15,420) 4 Yese 

San Francisco 15 (6) 51,068 (10,829) 2 No 

Seattle 17 (6) 64,012 (53,840) .4 No 

Source: CMS. 

Note: GAO analysis of data provided by CMS, June 2002. 

a

The number of HCBS waiver beneficiaries is based on 1999 HCFA form 372 data. See Harrington, 

Aug. 2001. 

b

Staff are not working full-time on HCBS waivers. 

c

One qualified mental retardation professional and one qualified mental health professional. 

d

One individual who is both a registered nurse and a qualified mental retardation professional. 

e

One registered nurse and one part-time qualified mental retardation professional. 

As shown in table 7, 3 of the 10 regional offices had specialists assigned to 

waiver oversight, such as registered nurses or qualified mental retardation 

professionals.39 When asked to identify one of the greatest improvements 

that could be made in federal waiver oversight, 3 of the 10 regional offices 

identified the direct assignment of specialist staff. CMS’s waiver review 

protocol specifies that the participation of clinical and other specialist 

staff is important to assessing issues related to beneficiaries’ health and 

welfare. However, many regional offices indicated that they had to 

“borrow” specialist staff from other departments within the region in order 

to conduct their waiver reviews. The Seattle and Boston regional offices 

provide contrasting examples of the role played by regional office 

management in obtaining clinical staff to conduct reviews. According to 

Seattle regional office staff, it has been a challenge to obtain specialist 

 39Two of these three regions indicated that they had intentionally hired someone with a 

clinical specialty for waiver reviews. 
Page 33 GAO-03-576 Medicaid Home and Community-Based Waivers 

staff on the waiver review teams. For 4 to 5 years, the region did not 

conduct any HCBS waiver reviews. In the past 4 years, it has only 

conducted three reviews—regardless of the number of waivers due for 

review. The region has four waivers that have never been reviewed, two 

dating back to 1989. According to the staff, the prior regional 

administrator did not target resources for HCBS waiver reviews, and it 

was difficult to obtain clinical and other specialist staff from other 

departments to assist in conducting reviews. Although it has no specialist 

staff assigned to waivers, Boston regional office officials informed us that 

conducting HCBS waiver reviews has been a management priority, as 

evidenced by the fact that the region always includes a registered nurse or 

other relevant specialist on the review team. We noted that the Boston 

regional office has conducted timely reviews of all of its waivers. 

When asked to identify the greatest challenges related to HCBS waiver 

oversight, 4 of the 10 CMS regional offices identified insufficient travel 

funding. Regional office staff indicated that there appears to be no 

correlation between the amount of travel dollars made available by the 

regional offices for the reviews and the review schedule set forth by CMS 

headquarters. Moreover, they told us that they had to compete for limited 

travel resources with the regional office staff responsible for overseeing 

nursing homes. Regional office responses to inadequate travel funds have 

included (1) conducting a “desk review” without visiting state agency 

officials, providers, and waiver beneficiaries, (2) limiting the number of 

days allotted for the review, (3) reducing the number of staff assigned to 

conduct the review, or (4) not reviewing a particular waiver at all. In the 

New York regional office, a lack of travel funds led to desk reviews for 9 of 

15 waivers. According to the Philadelphia regional office’s final report for 

a Virginia HCBS waiver, some cases that should have been pursued were 

not reviewed because only 1 week had been allotted for fieldwork, and 2 

of the 18 cases selected for field review were dropped because there was 

insufficient time to conduct the review. In 2001, the Chicago regional 

office conducted a limited on-site review of a Michigan HCBS waiver 

serving over 6,000 beneficiaries. During the review, three case files were 

examined and one beneficiary was interviewed. According to Denver 

regional office officials, travel budget problems have meant that the 

reviews are conducted by one staff member when two would be 

preferable. 
Page 34 GAO-03-576 Medicaid Home and Community-Based Waivers 

HCBS waivers give states considerable flexibility to establish customized 

programs offering long-term care services for specific populations, such as 

elderly persons, persons with mental retardation, or children with special 

needs. While maintaining this flexibility is important, insufficient emphasis 

has been placed on balancing flexibility with measures to ensure 

accountability. At present, states may obtain a waiver serving the elderly 

with a limited explanation of how they plan to monitor quality, and CMS 

has not held states accountable for submitting complete and timely annual 

waiver reports detailing their quality assurance activities. Moreover, CMS 

has not fully complied with the statutory and regulatory requirements that 

condition the renewal of HCBS waivers on whether the state has fulfilled 

its assurances that necessary safeguards are in place to protect the health 

and welfare of waiver beneficiaries. The current size and likely future 

growth in HCBS waiver programs that serve a vulnerable population—

particularly elderly individuals eligible for nursing home placement—make 

it even more essential for states to have appropriate mechanisms in place 

to monitor the quality of care. 

While CMS requires periodic reviews of state waiver programs to help 

ensure that beneficiaries’ health and welfare are adequately protected, 

many have been renewed without such a review. In addition, guidance on 

how these waiver reviews should be conducted does not address 

important operational issues such as sample size and sampling 

methodology. Consequently, there is little relationship among the amount 

of time spent on-site conducting waiver reviews, the number of beneficiary 

records reviewed, and the number of beneficiaries served. CMS expects its 

regional offices to interview and observe waiver beneficiaries to obtain a 

first-hand perspective on care delivery and the adequacy of case 

management, but beneficiary interviews are not a component of all 

regional office reviews. Moreover, staff resources and travel funds 

currently allocated to conduct waiver reviews are insufficient. Without 

necessary attention from CMS, these guidance and resource issues will 

only be exacerbated by the expected future growth in the number of 

persons served through HCBS waiver programs. CMS has a number of 

initiatives directed towards improving quality and quality assurance for 

home and community-based waiver programs. They do not, however, 

address the specific oversight weaknesses we have identified in this 

report, such as the lack of detailed criteria or guidance for states regarding 

the necessary components of a quality assurance system to help ensure 

the health and welfare of waiver beneficiaries. 

Conclusions 
Page 35 GAO-03-576 Medicaid Home and Community-Based Waivers 

To ensure that state quality assurance efforts are adequate to protect the 

health and welfare of HCBS waiver beneficiaries, we recommend that the 

Administrator of CMS 

• develop and provide states with more detailed criteria regarding the 

necessary components of an HCBS waiver quality assurance system, 

• require states to submit more specific information about their quality 

assurance approaches prior to waiver approval, and 

• ensure that states provide sufficient and timely information in their annual 

waiver reports on their efforts to monitor quality. 

To strengthen federal oversight of the growing HCBS waiver programs and 

to ensure the health and welfare of HCBS waiver beneficiaries, we 

recommend that the Administrator 

• ensure allocation of sufficient resources and hold regional offices 

accountable for conducting thorough and timely reviews of the status of 

quality in HCBS waiver programs, and 

• develop guidance on the scope and methodology for federal reviews of 

state waiver programs, including a sampling methodology that provides 

confidence in the generalizability of the review results. 

We provided a draft of this report to CMS and South Carolina, Texas, and 

Washington, the three states in which we obtained a more in-depth 

perspective on states’ quality assurance approaches. (CMS’s comments are 

reproduced in app. VIII.) CMS affirmed its commitment to its ongoing 

responsibility, in partnership with the states, to ensure and improve 

quality in HCBS waivers. The agency stated that the federal focus should 

be on assisting states in the design of HCBS programs, respecting the 

assurances made by states, improving the ability of states to remedy 

identified problems, providing assistance to states to improve the quality 

of services, and thereby assisting people to live in their own homes in 

communities of their choice. CMS generally concurred with our 

recommendations to improve state and federal accountability for quality 

assurance in HCBS waivers but raised concerns about our definition of 

quality, how best to ensure quality in state waiver programs, the 

appropriate state and federal oversight roles, and the resources and 

guidance required to carry out federal quality oversight. 

Recommendations for 

Executive Action 

Agency and State 

Comments and Our 

Evaluation
Page 36 GAO-03-576 Medicaid Home and Community-Based Waivers 

CMS stated that the draft report’s definition of quality in waivers was too 

narrow because it ignored a wide variety of activities used to promote 

quality. Furthermore, CMS cited the availability of a broad array of waiver 

services with choice over how, where, and by whom services are delivered 

as important to beneficiaries’ quality of life. According to CMS, growth in 

the number of persons served by HCBS waivers was evidence of 

beneficiary satisfaction. (See CMS’s “General Comments,” 2 and 3.) 

Rather than defining quality ourselves, we reported the approaches states 

used to assure quality in their waiver programs. By analyzing state 

applications for waivers serving the elderly and state annual waiver 

reports, we identified a broad array of state quality assurance activities, 

including licensing and certification of providers and beneficiary 

satisfaction surveys (see tables 2 and 3). We disagree with CMS’s assertion 

that beneficiaries’ preference for services that allow them to remain in the 

community can be equated with satisfaction for the services delivered. 

Even assuming that beneficiary satisfaction alone is a reliable indicator of 

quality, CMS offered no empirical evidence to support its position. Only 

about half of the state annual waiver reports we reviewed indicated that 

states measured beneficiary satisfaction with services. Moreover, our 

review of quality-of-care problems identified in waiver programs serving 

the elderly demonstrated that failure to provide needed or authorized 

services was a frequently cited problem. For example, as we noted in the 

draft report, a CMS review found that 27 percent of beneficiaries served by 

one state’s HCBS waiver for the elderly did not receive any of their 

authorized personal care services, and 49 percent received only half. 

CMS commented that the draft report failed to recognize that HCBS 

programs require a different approach to quality than their institutional 

alternatives and “leaves the distinct impression that the most effective way 

to assure and improve quality is through the process of inspection and 

monitoring.” CMS asserted that design of an HCBS waiver, as opposed to 

monitoring its implementation, is the most important contributor to 

quality, and the agency’s recent efforts have focused on working with 

states to improve design decisions and design options. (See CMS’s 

“General Comments,” 4 and 7.) 

We disagree with CMS’s characterization of our findings. Our report 

recognizes the importance of maintaining states’ considerable flexibility in 

ensuring quality in HCBS waivers but concludes that insufficient emphasis 

has been placed on balancing this flexibility with measures to ensure the 

accountability called for by both statute and regulations. Contrary to 

Definition of Quality 

Quality Assurance 

Approaches 
Page 37 GAO-03-576 Medicaid Home and Community-Based Waivers 

CMS’s comments, we did not recommend an additional or increased 

federal oversight role or the adoption of oversight systems such as those 

used for institutional providers. Our analysis and conclusions were based 

on the criteria established in both statute and regulations that entail 

federal oversight of waivers and that condition federal approval and 

renewal of waivers on states’ demonstrating to CMS that they have 

established and are fulfilling assurances to protect the health and welfare 

of waiver beneficiaries. We found that CMS currently receives too little 

information from states about their quality assurance approaches to hold 

them accountable, raising a question as to whether the agency has 

adequate information to approve or renew some waivers. While we agree 

that waiver design is important to ensuring quality, a state’s 

implementation of its quality assurance approaches is equally, if not more, 

important. In its protocol for reviewing states’ HCBS waivers, CMS gives 

equal emphasis to both the design and implementation of quality 

assurance mechanisms. Despite its concerns, CMS generally concurred 

with our recommendation to develop and provide states with more 

detailed criteria regarding the necessary components of an HCBS waiver 

quality assurance system. CMS cited its current effort to provide such 

guidance and indicated that it would work to more clearly define its 

criteria and expectations for quality. 

CMS commented that “the report lends itself to the conclusion that the 

federal government ought to be the primary source of quality monitoring 

and improvement, and fails to recognize that the federal statutes convey 

respect for state authority and competence in the administration of HCBS 

programs.” (See CMS’s “General Comments,” 6.) We agree that the states 

and the federal government have distinct quality monitoring roles but 

believe that CMS has mischaracterized our description of those roles as 

defined in statute and regulations. In addition, we believe that CMS has 

understated the importance of federal oversight. 

The report describes states’ statutory and regulatory responsibility to 

(1) include information in their waiver applications on their approaches 

for protecting the health and welfare of HCBS beneficiaries and (2) report 

annually on state quality assurance approaches and deficiencies identified 

through state monitoring. We reported that waiver applications contained 

limited information on state quality assurance approaches and that many 

state annual waiver reports were neither timely nor complete. Eleven of 

the 15 applications for the largest waivers serving the elderly included 

none of the following well-recognized quality assurance tools: complaint 

systems, corrective action plans, sanctions, or beneficiary satisfaction 

State and Federal Roles in 

Ensuring Quality 
Page 38 GAO-03-576 Medicaid Home and Community-Based Waivers 

surveys. Annual reports for more than a third of 70 waivers serving the 

elderly were at least 1 year late, and one-quarter of such reports did not 

indicate whether deficiencies had been identified, as required. CMS 

acknowledged the need for more comprehensive information from states 

at the time of application and at subsequent renewals. Consistent with our 

recommendation, CMS agreed to revise and improve the application 

process and annual state waiver report to include more information on 

states’ quality approaches and activities. 

The report also describes CMS’s statutory responsibility for ensuring that 

states adequately implement their quality assurance approaches—a 

responsibility operationalized in policy guidance to the agency’s regional 

offices. Waiver reviews are expected to occur at least once during the 

initial 3-year waiver period and during each 5-year renewal cycle. We did 

not propose an expanded federal quality assurance role. We reported that, 

in some cases, CMS had an insufficient basis for determining that states 

had met the required assurances for protecting beneficiaries’ health and 

welfare. As of June 2002, almost one-fifth of all HCBS waivers in place for 

3 years or more had either never been reviewed or were renewed without 

a review; 14 of these waivers had 10 or more years elapse without a 

regional office review. Some CMS waiver reviews have uncovered serious 

state oversight weaknesses as well as quality-of-care problems. For 

example, the review of one state’s waiver found both medical and physical 

neglect of beneficiaries because of serious lapses in state oversight, 

resulting in a decision to let the waiver expire. The full extent of such 

problems is unknown because many state waivers lacked a recent CMS 

review. CMS did not comment directly on our conclusion that the agency 

is not fully complying with statutory and regulatory requirements when it 

renews waivers. The agency suggested it would be far more efficient and 

equally effective for federal waiver reviews to focus on only one waiver in 

cases where there are multiple waivers in a state serving subsets of the 

same target group and using the same quality assurance system; however, 

CMS’s own guidance to its regional offices calls for each waiver to receive 

at least one full review during a given waiver cycle, with each waiver 

receiving at least some level of review.40 

 40The only exceptions mentioned in CMS guidance apply to model waivers and those 

waivers serving fewer than 200 participants when the regional office determines there is a 

high probability that no significant quality problems exist by (1) combining the review of a 

smaller waiver with a larger waiver in the same state or (2) conducting an initial minireview with the understanding that a more extensive review could follow if quality 

assurance problems are detected during the mini-review. 
Page 39 GAO-03-576 Medicaid Home and Community-Based Waivers 

CMS commented that the draft report’s recommendations to hold regional 

offices accountable for conducting thorough and timely reviews of quality 

in HCBS waiver programs, including a sampling methodology that 

provides confidence in the generalizability of the review results, would 

require a huge new investment or redirection of federal resources. 

Specifically, CMS commented that the report “does not address the 

significant resources that would need to be found or redirected to 

implement its recommendations” and “fails to acknowledge the lack of 

appropriated funds for HCBS quality.” The agency stated that such funds 

would have to come from CMS’s operating budget. CMS also pointed out 

that it had already taken steps organizationally to ensure that enough 

resources are devoted to quality and that they are appropriately positioned 

within CMS. (See CMS’s “General Comments,” 5, 8, and 9.) 

CMS’s existing waiver review protocol directs regional offices to select a 

sample of waiver beneficiaries for activities such as interviews and 

observations, but it does not adequately address sampling methodology. 

We found that sample selection methods varied with some regional offices 

selecting random samples, some basing their sample on geographic 

location, and others reporting no methodology for sample selection. Given 

that the regional offices are already generalizing their findings to the 

waiver program as a whole, we believe explicit and uniform sample 

selection guidance is imperative. At the same time, we believe that, as 

CMS suggested, samples may appropriately be targeted to certain types of 

participants or services so that, over time, greater assurances are provided 

about the quality of care. In response to our recommendation to develop 

guidance on the scope and methodology for federal reviews of state 

waiver programs, CMS said it is committed to developing additional policy 

guidance. 

We did not recommend significant increases in appropriated funds for 

conducting waiver reviews. Rather, our draft report recommended that 

CMS ensure allocation of sufficient resources and hold regional offices 

accountable for conducting thorough and timely reviews of the status of 

quality in HCBS waiver programs. The CMS Administrator is responsible 

for assessing whether existing funding levels are adequate to satisfy 

statutory and regulatory requirements, including periodic regional office 

review of the states’ assurances. The Administrator may indeed conclude 

that, to carry out these oversight responsibilities for the growing numbers 

of frail beneficiaries who prefer and rely on these services, there may be a 

need to reallocate existing funds or to request additional funds. CMS also 

noted that it had recently redeployed and reorganized headquarters staff 

to incorporate the quality function into each program area, including the 

Resources and Guidance 

for Federal Oversight 
Page 40 GAO-03-576 Medicaid Home and Community-Based Waivers 

operational unit that oversees HCBS waivers. Despite CMS’s concerns 

about the need for significant funding increases, the agency noted the 

importance of further investments to advance both state and federal 

capability to assure quality in waiver programs. 

CMS commented that the draft report had numerous technical 

inaccuracies, but cited only one and provided no additional examples or 

technical comments to accompany its written response (CMS’s “General 

Comments,” 1). Although CMS stated that our characterization of federal 

requirements concerning waiver renewals was inaccurate, its suggested 

changes and our report language were essentially the same. To avoid any 

confusion, however, we have added the statute’s specific language to the 

background section of the report. CMS further commented that our report 

should recognize that the Congress created an enforcement mechanism 

that places great reliance on a system of assurances. Our draft report 

made that point while also describing CMS’s responsibility, as specified in 

its implementing regulations, to determine that each state has met all the 

assurances set forth in its waiver application before renewing a waiver. 

CMS stated that the draft report failed to acknowledge the steps it has 

already taken to ensure quality. (CMS’s “General Comments,” 10.) To the 

contrary, the draft report described each of the efforts CMS referred to as 

under way to monitor and improve HCBS quality and addressed each 

activity: the waiver review protocol, the HCBS quality framework, the 

development of tools to assist states, development of the Independence 

Plus template, and the national technical assistance contractor. However, 

we found that CMS’s waiver review protocol does not address key issues 

relating to the scope and methodology of federal oversight reviews. 

Moreover, the use of the Independence Plus template, which requires 

more specific information on states’ quality assurance approaches, is 

voluntary rather than mandatory. 

In its written comments, Texas stated that it supports proper federal 

oversight of HCBS waivers but stressed the need to maintain flexibility in 

designing waivers to meet the unique needs of residents requiring 

community care. The state believes that such flexibility should not be lost 

in establishing more specific quality assurance criteria. 

Additional CMS Comments 

State Comments 
Page 41 GAO-03-576 Medicaid Home and Community-Based Waivers 

As arranged with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days after its 

issue date. At that time, we will send copies of this report to the 

Administrator of the Centers for Medicare & Medicaid Services and 

appropriate congressional committees. We also will make copies available 

to others upon request. In addition, the report will be available at no 

charge on the GAO Web site at http://www.gao.gov. 

Please contact me at (202) 512-7118 or Walter Ochinko at (202) 512-7157 if 

you have questions about this report. Other contributors to this report 

included Eric Anderson, Connie Peebles Barrow, and Kevin Milne. 

Kathryn G. Allen 

Director, Health Care—Medicaid 

 and Private Health Insurance Issues 
Appendix I: Scope and Methodology 

Page 42 GAO-03-576 Medicaid Home and Community-Based Waivers 

This appendix describes our scope and methodology, following the order 

that our results are presented in the report. 

Data on HCBS Waivers. To identify the universe of state HCBS waivers as 

of June 2002, we asked the CMS regional offices to identify each waiver, 

including the target population and the waiver start date. The regional 

offices identified a total of 263 waivers. Using this information and other 

data, we identified 77 waivers serving the elderly. To identify trends in 

Medicaid long-term care and Medicaid waiver spending, we analyzed data 

covering fiscal years 1991 through 2001 from HCFA reports (HCFA Form 

64) compiled by The MEDSTAT Group. To identify trends in the overall 

number of Medicaid waiver beneficiaries, number of elderly waiver 

beneficiaries, average waiver size, and average per beneficiary 

expenditures for waivers serving the elderly, we analyzed data from state 

annual waiver reports (HCFA Form 372) covering fiscal years 1992 

through 1999 in a database compiled by researchers at the University of 

California, San Francisco.1

State Quality Assurance Mechanisms. In the absence of comprehensive, 

readily available information on HCBS quality assurance mechanisms that 

states use, we analyzed the information available in a subset of state 

waiver applications and annual state waiver reports for waivers serving 

the elderly. Specifically, we analyzed (1) initial and/or renewal 

applications for the 15 largest waivers serving the elderly as of 1999 and 

(2) annual state waiver reports from 70 of the 79 waivers serving the 

 1

See Harrington, Aug. 2001. Researchers collected HCFA Form 372 reports for most HCBS 

waivers from 1992 through 1999. In some cases, where the annual reports were not 

available, state officials provided estimates of the relevant data. In other cases, where 

annual reports were not available and where state officials were unable to provide an 

estimate, University researchers developed their own estimates for the missing data on the 

basis of trend information for the particular waiver. For 1992, participant and expenditure 

data were estimated for 21 of 155 HCBS waivers; 8 of these were waivers serving the 

elderly. For 1999, participant and expenditure data were estimated for 20 of 214 HCBS 

waivers; 3 of these were waivers serving the elderly. Where participant or expenditure data 

for individual states are based on such estimates, we have indicated so in the text. In 

addition, based on information provided by CMS, we identified 7 of the 238 waivers in this 

database that had been misclassified. Four waivers listed as serving the aged or aged and 

disabled actually served other population groups; and 3 waivers listed as serving other 

population groups served either the aged or aged and disabled. Our analyses reflect the 

actual target populations for these 7 waivers. 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 43 GAO-03-576 Medicaid Home and Community-Based Waivers 

elderly.2 The waiver applications are used by CMS, in part, to assess 

whether the quality assurance mechanisms in place warrant waiver 

approval. The annual waiver reports are required to provide a description 

of the process for monitoring the standards and safeguards under the 

waiver and the results of state monitoring. Of the 70 state annual waiver 

reports that we analyzed, 52 contained some information about states’ 

monitoring processes. Eight of the remaining 9 annual waiver reports were 

new waivers for which the state had not yet submitted an annual report, 

and for 1 waiver, a regional office did not provide a copy of the annual 

state report. 

State Oversight and Quality of Care. To assess state oversight issues in 

waivers serving the elderly, we examined regional office waiver review 

reports for 21 waivers and state audit reports related to 5 waivers, the only 

reports we were able to analyze, for a total of 23 discrete waivers.3

 To 

assess quality-of-care problems in waivers serving the elderly, we reviewed 

51 waivers for which we were able to analyze regional office final reports 

and annual state reports. Regional office waiver review reports identified 

problems in 19 waivers, and annual state reports identified problems in 22 

waivers, for a total of 36 discrete waivers.4

 These reports identified no 

quality-of-care problems in the remaining 15 waivers. We were unable to 

analyze findings from 28 additional waivers because they either (1) lacked 

a recent regional office waiver review completed during the period of 

October 1998 through May 2002 or an annual state waiver report, (2) the 

annual state waiver report did not address whether deficiencies had been 

identified, or provided no information on the deficiencies found, or (3) the 

 2

As of June 2002, there were 77 waivers serving the elderly. However, our analysis of 

quality-of-care problems includes 2 additional waivers serving the elderly that had been 

terminated or not renewed as of that date because they had had a regional office review 

during the October 1998 through May 2002 time period we examined. 

3

Five state audit agencies—Connecticut, Delaware, Kansas, Louisiana, and Montana—

provided audit reports of waiver programs serving the elderly. Three of the regional office 

reviews and three of the state audit reports covered the same waivers. 

4

Five of the regional office reviews and five of the annual state reports in which problems 

were identified covered the same waivers. 
Appendix I: Scope and Methodology 

Page 44 GAO-03-576 Medicaid Home and Community-Based Waivers 

waivers were too new to have had a regional office review or to provide an 

annual state report.5

CMS Oversight. To determine the adequacy of CMS regional office 

oversight of states’ waiver programs, we asked all 10 CMS regional offices 

to provide the following information for each of the waivers for which 

they were responsible, including both waivers for the elderly as well as 

those serving other target populations: (1) the waiver start date, (2) the 

current waiver time period, (3) the fiscal year the waiver was last 

reviewed, and (4) whether or not the waiver review report was finalized. 

Of the 263 waivers, 228 had been in place for 3 years or more and therefore 

should have had a regional office review. The other 35 waivers were less 

than 3 years old and would not have yet qualified for a review as of June 

2002. For information on sample sizes and duration of the reviews, we 

analyzed CMS’s HCBS waiver review final reports for waivers serving the 

elderly that were issued during the period of October 1998 through May 

2002. Fifteen of the 21 waiver review reports that we received included 

information on the number of waiver beneficiary records reviewed and on 

the duration of the reviews. Some review reports also provided the 

number of beneficiaries that were interviewed or observed. We also 

discussed regional office oversight activities with CMS headquarters’ staff. 

 5

As of June 2002, there were 77 waivers serving the elderly. However, our analysis of state 

oversight and quality-of-care problems includes 2 additional waivers for the elderly that 

had been terminated or not renewed as of that date because they had had a regional office 

review during the October 1998 through May 2002 time period we examined. 
Appendix II: Suggested CMS Definitions of 

Home and Community-Based Services in 

Waivers Serving the Elderly 

Page 45 GAO-03-576 Medicaid Home and Community-Based Waivers 

Table 8 contains a list of services provided through the HCBS waivers 

serving the elderly and the suggested CMS definitions. However, states 

may provide alternative definitions in their waiver applications. 

Table 8: Services States May Include in Their Medicaid Home and Community-Based Services Waiver 

HCBS waiver service Suggested CMS definition 

Case management Services that will assist individuals who receive waiver services in gaining access to 

needed waiver and other state plan services, as well as needed medical, social, 

educational, and other services, regardless of the funding source for the services to 

which access is gained. 

Homemaker services Services consisting of general household activities (e.g., meal preparation and 

routine household care) provided by a trained homemaker, when the individual 

regularly responsible for these activities is temporarily absent or unable to manage 

the home and care for him- or herself or others in the home. 

Personal care services Assistance with activities of daily living, such as eating, bathing, dressing, or 

personal hygiene. This service may include assistance with preparation of meals, 

but does not include the cost of the meals themselves. 

Respite care services Services provided to individuals unable to care for themselves; furnished on a 

short-term basis because of the absence of or need for relief for those persons 

normally providing the care. These services may be provided in such locations as a 

nursing home, hospital, or waiver beneficiary’s home. 

Adult day health services Services furnished 4 or more hours per day on a regularly scheduled basis, for 1 or 

more days per week, in an outpatient setting, encompassing both health and social 

services needed to ensure the optimal functioning of the individual. Meals provided 

as part of these services do not constitute a “full nutritional regimen” (three meals 

per day). Physical, occupational, and speech therapies indicated in the individual’s 

plan of care will be furnished as component parts of this service. 

Environmental accessibility adaptations Those physical adaptations to the home, required by the individual’s plan of care, 

that are necessary to ensure the health, welfare, and safety of the individual or that 

enable the individual to function with greater independence in the home, and 

without which the individual would require institutionalization. Adaptations may 

include installation of ramps and grab-bars, widening of doorways, modification of 

bathroom facilities, or installation of specialized electric and plumbing systems 

necessary to accommodate the medical equipment and supplies that are necessary 

for the welfare of the individual. 

Skilled nursing services Services listed in the plan of care that are within the scope of the state’s Nurse 

Practice Act and are provided by a registered professional nurse or licensed 

practical or vocational nurse under the supervision of a registered nurse licensed to 

practice in the state. 

Transportation Service offered to enable individuals served on the waiver to gain access to waiver 

and other community services, activities, and resources specified by the plan of 

care. 

Specialized medical equipment and supplies Specialized medical equipment and supplies include devices, controls, or 

appliances, specified in the plan of care, that enable individuals to increase their 

abilities to perform activities of daily living or to perceive, control, or communicate 

with the environment in which they live. 

Chore services Services needed to maintain the home in a clean, sanitary, and safe environment. 

These services include heavy household chores such as washing floors, windows, 

and walls, tacking down loose rugs and tiles, and moving heavy items of furniture in 

order to provide safe entry and exit. 

Appendix II: Suggested CMS Definitions of 

Home and Community-Based Services in 

Waivers Serving the Elderly 
Appendix II: Suggested CMS Definitions of 

Home and Community-Based Services in 

Waivers Serving the Elderly 

Page 46 GAO-03-576 Medicaid Home and Community-Based Waivers 

HCBS waiver service Suggested CMS definition 

Personal emergency response systems Electronic devices that enable certain individuals at high risk of institutionalization to

secure help in an emergency. The individual may also wear a portable “help” button 

to allow for mobility. The system is connected to the person’s telephone and, once 

a “help” button is activated, the telephone is programmed to signal a response 

center staffed by trained professionals. 

Adult companion services Nonmedical care, supervision, and socialization provided to a functionally impaired 

adult. Companions may assist or supervise the individual with such tasks as meal 

preparation, laundry, and shopping but do not perform these activities as discrete 

services. 

Attendant care services Hands-on care, of both a supportive and health-related nature, specific to the needs 

of a medically stable, physically handicapped individual. Supportive services are 

those that substitute for the absence, loss, diminution, or impairment of a physical 

or cognitive function. 

Adult foster care services Personal care and services; homemaker, chore, attendant care, and companion 

services; and medication oversight (to the extent permitted under state law) 

provided in a licensed (where applicable) private home by a principal care provider 

who lives in the home. Adult foster care is furnished to adults who receive these 

services in conjunction with residing in the home. Typically, there is a limit to the 

total number of individuals living in the home. 

Assisted living services Personal care and services, homemaker, chore, attendant care, and companion 

services; medication oversight (to the extent permitted under state law); and 

therapeutic social and recreational programming, provided in a home-like 

environment in a licensed (where applicable) community care facility, in conjunction 

with residing in the facility. This service includes 24-hour on-site response staff to 

meet scheduled or unpredictable needs in a way that promotes maximum dignity 

and independence, and to provide supervision, safety, and security. 

Private duty nursing Individual and continuous care (in contrast to part-time or intermittent care) 

provided by licensed nurses within the scope of state law. These services are 

provided to an individual at home. 

Extended state plan services Includes physician services, home health care services, physical therapy services, 

occupational therapy services, speech, hearing and language services, and 

prescribed drugs—services available through the approved state plan but without 

limitations on amount, duration, and scope. 

Source: CMS. 

Note: Definitions contained in current streamlined Medicaid 1915(c) waiver application format, OMB 

form 0938 0449. 
Appendix III: Medicaid Long-Term Care 

Expenditures, by Type and State, Fiscal Year 

2001 

Page 47 GAO-03-576 Medicaid Home and Community-Based Waivers 

 Percent of expenditures by service or setting 

 Institutiona

 care Home and community-based care 

State 

Medicaid longterm care 

expenditures (in 

millions) Nursing homes ICF/MR HCBS waivers Personal careaHome healthb

Alabama $927 73% 7% 17% 0% 4%

Alaska 156 46 0 48 5 0

Arizona 15 n.a. n.a. n.a. n.a. n.a.

Arkansas 647 57 15 15 10 4

California 5,066 51 8 10 27 3

Colorado 768 47 2 42 0 10

Connecticut 1,842 56 13 23 0 8

Delaware 195 57 16 24 0 3

District of Columbia 253 63 31 1 0 6

Florida 2,648 64 11 21 1 3

Georgia 1,099 69 10 16 0 4

Hawaii 210 71 4 25 0 1

Idaho 258 46 24 23 5 3

Illinois 2,533 59 26 14 0 1

Indiana 1,307 63 23 11 0 4

Iowa 756 49 27 17 0 6

Kansas 887 54 8 34 1 3

Kentucky 935 60 10 17 0 13

Louisiana 1,677 69 21 8 0 1

Maine 411 49 11 37 1 2

Maryland 1,061 66 6 20 3 6

Massachusetts 2,450 58 9 21 10 3

Michigan 2,385 73 1 17 8 1

Minnesota 1,916 47 11 32 7 3

Mississippi 646 64 26 8 0 2

Missouri 1,677 62 11 18 9 0

Montana 215 52 10 27 11 0

Nebraska 579 64 8 23 1 3

Nevada 162 57 18 17 4 4

New Hampshire 358 59 1 38 1 1

New Jersey 3,192 69 13 10 6 2

New Mexico 410 40 4 39 16 0

New York 13,469 47 16 15 14 8

North Carolina 2,037 43 20 22 11 4

North Dakota 251 60 19 20 0 1

Ohio 3,643 64 22 13 0 2

Oklahoma 811 53 14 29 5 0

Oregon 1,058 51 1 45 3 0

Appendix III: Medicaid Long-Term Care 

Expenditures, by Type and State, Fiscal Year 

2001 
Appendix III: Medicaid Long-Term Care 

Expenditures, by Type and State, Fiscal Year 

2001 

Page 48 GAO-03-576 Medicaid Home and Community-Based Waivers 

 Percent of expenditures by service or setting 

 Institutiona

 care Home and community-based care 

State 

Medicaid longterm care 

expenditures (in 

millions) Nursing homes ICF/MR HCBS waivers Personal careaHome healthb

Pennsylvania 5,114 72 10 17 0 1

Rhode Island 420 58 2 39 0 1

South Carolina 789 47 21 28 0 3

South Dakota 237 66 8 25 0 1

Tennessee 1,203 65 19 15 0 0

Texas 3,288 49 22 21 8 0

Utah 241 38 23 37 0 1

Vermont 191 44 1 49 2 3

Virginia 1,010 52 19 29 0 0

Washington 1,427 43 9 36 11 1

West Virginia 531 55 9 28 5 4

Wisconsin 1,813 53 11 27 6 3

Wyoming 113 35 13 48 0 4

U.S. Total 75,288 57 14 19 7 3

Source: CMS. 

Notes: GAO analysis of HCFA Form 64 data as reported by Brian Burwell, Steve Eiken, and Kate 

Sredl in Medicaid Long Term Care Expenditures in FY 2001, The MEDSTAT Group, May 10, 2002. 

Arizona does not have any HCBS waivers as it operates its Medicaid program as a demonstration 

project under a section 1115 waiver. Percentages in table may not add to 100 due to rounding. 

a

Personal care is an optional Medicaid state plan service. 

b

Home health care is a mandatory Medicaid state plan service. 
Appendix IV: Number of Beneficiaries Served 

by HCBS Waivers for the Elderly and in 

Nursing Homes, by State, 1999 

Page 49 GAO-03-576 Medicaid Home and Community-Based Waivers 

 Number of Medicaid beneficiaries 

State 

Served by HCBS 

waivers for the elderly Served in nursing homes 

Percent of beneficiaries 

 served by waivers 

for the elderly 

Alabama 5,826 24,576 19.2% 

Alaska 712 929 43.4 

Arizonaa not applicable not applicable not applicable 

Arkansas 8,158 20,699 28.3 

California 8,671b 117,843 6.9 

Colorado 11,481 18,918 37.8 

Connecticut 8,978 38,862 18.8 

Delaware 734 3,109 19.1 

District of Columbiac not applicable 4,359 not applicable 

Florida 16,915 91,985 15.5 

Georgia 14,018 39,720 26.1 

Hawaii 923 4,274 17.8 

Idaho 1,000 5,014 16.6 

Illinois 17,396 81,791 17.5 

Indiana 2,338 47,988 4.6 

Iowa 3,994 21,882 15.4 

Kansas 6,701 17,644 27.5 

Kentucky 13,339 27,739 32.5 

Louisiana 872 35,508 2.4 

Maine 1,395 9,236 13.1 

Maryland 132 27,920 0.5 

Massachusetts 5,132 60,044 7.9 

Michigan 6,328 44,180 12.5 

Minnesota 7,838 38,925 16.8 

Mississippi 2,540 23,909 9.6 

Missouri 20,821 39,762 34.4 

Montana 1,514 5,549 21.4 

Nebraska 2,357 16,487 12.5 

New Hampshire 1,367 7,147 16.1 

New Jersey 4,587b 51,747 8.1 

New Mexico 1,404 7,074 16.6 

Nevada 1,235 3,821 24.4 

New York 19,732 139,509 12.4 

North Carolina 11,159 42,382 20.8 

North Dakota 347 5,570 5.9 

Ohio 26,135b 92,133 22.1 

Oklahoma 9,042 25,758 26.0 

Appendix IV: Number of Beneficiaries Served 

by HCBS Waivers for the Elderly and in 

Nursing Homes, by State, 1999 
Appendix IV: Number of Beneficiaries Served 

by HCBS Waivers for the Elderly and in 

Nursing Homes, by State, 1999 

Page 50 GAO-03-576 Medicaid Home and Community-Based Waivers 

 Number of Medicaid beneficiaries 

State 

Served by HCBS 

waivers for the elderly Served in nursing homes 

Percent of beneficiaries 

 served by waivers 

for the elderly 

Oregon 26,410 12,031 68.7 

Pennsylvania 2,383 72,481 3.2 

Rhode Island 2,304 13,297 14.8 

South Carolina 14,361 17,458 45.1 

South Dakota 522 5,950 8.1 

Tennessee 511 37,311 1.4 

Texas 27,978 95,812 22.6 

Utah 574 5,513 9.4 

Vermont 1,014 3,745 21.3 

Virginia 11,835 27,746 29.9 

Washington 25,718 24,620 51.1 

West Virginia 3,470 11,788 22.7 

Wisconsin 13,900 41,341 25.2 

Wyoming 982 2,609 27.3 

Total U.S. 377,083 1,616,663 18.9% 

Source: CMS. 

Notes: GAO analysis of (1) annual state waiver report data (HCFA Form 372) as reported by 

Harrington, Aug. 2001, and (2) data on beneficiaries in nursing homes from Centers for Medicare & 

Medicaid Services, MSIS Statistical Report for Fiscal Year 1999. 

a

Arizona does not have any HCBS waivers for the elderly as it operates its Medicaid program as a 

demonstration project under a section 1115 waiver. 

b

Author’s estimate. See Harrington, Aug. 2001. 

c

In 1999, the District of Columbia did not have any HCBS waivers for the elderly in operation. 
Appendix V: Number of HCBS Waivers for the 

Elderly, Beneficiaries, Expenditures, and per 

Beneficiary Expenditures by State, 1999 

Page 51 GAO-03-576 Medicaid Home and Community-Based Waivers 

State 

Number of HCBS 

waivers for the elderly 

Number of beneficiaries 

served by waivers for the 

elderly Total expenditures 

Average expenditures 

per beneficiary 

Alabama 1 5,826 $37,488,861 $6,435 

Alaska 1 712 8,554,566 12,015 

Arizonaa 0 not applicable not applicable not applicable 

Arkansas 1 8,158 24,788,949 3,039 

Californiab 3 8,671 26,128,332 3,013 

Colorado 1 11,481 57,968,202 5,049 

Connecticut 1 8,978 54,432,244 6,063 

Delaware 1 734 6,528,330 8,894 

District of Columbiac 0 not applicable not applicable not applicable 

Florida 4 16,915 80,073,234 4,734 

Georgia 1 14,018 48,483,972 3,459 

Hawaii 2 923 13,905,438 15,065 

Idaho 1 1,000 6,300,645 6,301 

Illinois 1 17,396 46,272,565 2,660 

Indiana 1 2,338 15,477,320 6,620 

Iowa 1 3,994 10,052,900 2,517 

Kansas 1 6,701 40,359,505 6,023 

Kentucky 1 13,339 44,471,778 3,334 

Louisiana 3 872 8,402,786 9,636 

Maine 1 1,395 14,751,242 10,574 

Maryland 1 132 678,589 5,141 

Massachusetts 1 5,132 9,849,893 1,919 

Michigan 1 6,328 16,655,463 2,632 

Minnesota 1 7,838 34,845,022 4,446 

Mississippi 1 2,540 11,645,303 4,585 

Missouri 1 20,821 46,311,315 2,224 

Montana 1 1,514 14,454,089 9,547 

Nebraska 1 2,357 13,813,410 5,861 

New Hampshire 1 1,367 11,977,955 8,762 

New Jerseyb 2 4,587 46,294,225 10,092 

New Mexico 1 1,404 19,868,387 14,151 

Nevada 2 1,235 5,179,673 4,194 

New York 1 19,732 23,845,013 1,208 

North Carolina 1 11,159 153,752,548 13,778 

North Dakota 1 347 3,328,323 9,592 

Ohiob 1 26,135 134,200,340 5,135 

Oklahoma 1 9,042 34,905,750 3,860 

Oregon 1 26,410 168,138,603 6,366 

Appendix V: Number of HCBS Waivers for the 

Elderly, Beneficiaries, Expenditures, and per 

Beneficiary Expenditures by State, 1999 
Appendix V: Number of HCBS Waivers for the 

Elderly, Beneficiaries, Expenditures, and per 

Beneficiary Expenditures by State, 1999 

Page 52 GAO-03-576 Medicaid Home and Community-Based Waivers 

State 

Number of HCBS 

waivers for the elderly 

Number of beneficiaries 

served by waivers for the 

elderly Total expenditures 

Average expenditures 

per beneficiary 

Pennsylvania 1 2,383 13,752,684 5,771 

Rhode Island 2 2,304 11,650,696 5,057 

South Carolina 1 14,361 63,652,223 4,432 

South Dakota 1 522 1,376,800 2,638 

Tennessee 2 511 4,536,477 8,878 

Texas 1 27,978 266,376,586 9,521 

Utah 1 574 1,672,476 2,914 

Vermont 2 1,014 8,988,080 8,864 

Virginia 3 11,835 80,772,354 6,825 

Washington 1 25,718 194,129,285 7,548 

West Virginia 1 3,470 38,908,487 11,213 

Wisconsin 1 13,900 114,878,732 8,265 

Wyoming 1 982 4,420,108 4,501 

U.S. Total 64 377,083 $2,099,299,758 $5,567 

Source: CMS. 

Note: GAO analysis of annual state waiver report data (HCFA Form 372). See Harrington, Aug. 2001. 

a

Arizona does not have any HCBS waivers for the elderly as it operates its Medicaid program as a 

demonstration project under a section 1115 waiver. 

b

With the exception of the number of waivers for the elderly, the data for this state are based on 

author’s estimates. See Harrington, Aug. 2001. 

c

In 1999, the District of Columbia did not have any HCBS waivers for the elderly in operation. 
Appendix VI: CMS HCBS Quality Initiatives 

Page 53 GAO-03-576 Medicaid Home and Community-Based Waivers 

CMS has undertaken a series of initiatives to generate information and 

dialogue on existing systems of quality assurance in HCBS waivers and to 

provide a range of assistance to states in this area. Approximately $1 

million was budgeted for these HCBS quality initiatives in fiscal year 2001 

and $3.4 million in fiscal year 2002. Through its HCBS quality initiatives, 

CMS intends to more closely assess the status of quality assurance efforts 

currently in place and to provide direct assistance to states in this area. 

CMS’s initiatives include (1) developing a conceptual framework for 

defining and measuring quality, (2) creating tools for states to adapt and 

use in assessing quality, such as model consumer experience surveys, and 

(3) providing technical assistance and resources for quality assurance and 

improvement. These initiatives, while important, do not address the lack 

of detailed requirements for states on the necessary components of an 

acceptable quality assurance system or the weaknesses in regional office 

oversight of state HCBS waivers that we identified elsewhere in this 

report. 

Quality Framework and Expectations. CMS sponsored the development 

of a framework for quality in home and community-based services that 

focuses on outcomes in several key areas including beneficiary access to 

care, safety, satisfaction, and meeting beneficiary needs and preferences.1

The next phase involves identifying strategies that states are currently 

using to monitor and improve quality within these key areas. While the 

expectations contained in the quality framework have not been specified 

in CMS regulations, they are reflected in the application template for 

CMS’s new consumer-directed HCBS waiver, Independence Plus.2

 States’ 

use of the template for the Independence Plus waiver is voluntary. The 

template asks states for a detailed description of their quality assurance 

and improvement programs—something not currently required as part of 

the general HCBS waiver application. Guidance for using the template 

notes that the description should include (1) information on the frequency 

of quality assurance activities, (2) the dimensions that will be monitored, 

(3) the qualifications of persons conducting quality assurance activities, 

 1

The quality framework was developed with input from a variety of organizations and 

individuals including national aging and developmental disabilities organizations, CMS 

officials from headquarters and regional offices, and state directors for Medicaid, aging and 

developmental disabilities. 

2

Independence Plus is CMS’s new demonstration program for family or individual-directed 

community-based services. Under this consumer-directed care model, beneficiaries are 

provided greater decision-making authority regarding their service needs, their provider of 

services, and how quality of care will be assessed. 

Appendix VI: CMS HCBS Quality Initiatives 
Appendix VI: CMS HCBS Quality Initiatives 

Page 54 GAO-03-576 Medicaid Home and Community-Based Waivers 

(4) the process for identifying problems, including sampling 

methodologies, (5) provisions for assuring that problems are addressed in 

a timely manner, and (6) the system to receive, review, and act on critical 

incidents or events. 

Quality Assurance Mechanisms. CMS is also developing quality 

assessment and improvement mechanisms for states. For example, to 

develop a guide for states and CMS regional offices, a contractor reviewed 

the literature on quality measurement and improvement in home and 

community-based care, convened an expert panel, and conducted 

interviews with state officials. As of April 2003, the guide was undergoing 

final clearance within CMS. It is expected to include (1) benchmarks for 

effective quality assurance programs in home and community-based care, 

(2) a discussion of the knowledge and mechanisms needed to design, 

implement, and assess quality activities in home and community-based 

care, and (3) suggestions for addressing limitations and problems in 

assuring quality in home and community-based care. Another contractor 

has developed and field-tested consumer experience surveys for use in 

waiver programs for the elderly and for persons with developmental 

disabilities. This contractor is also developing a set of performance 

indicators for states to use in guiding development and assessing quality in 

new self-directed HCBS waivers. 

Technical Assistance and Resources. Other CMS efforts focus on 

providing technical assistance and resources to states. One contractor has 

assembled a team of professionals with expertise in home and communitybased services that can serve as a resource for both states and the CMS 

regional offices.3

 Services available from these teams are expected to 

include conducting targeted reviews of waiver programs; providing 

suggestions to states regarding their quality assurance activities; 

consulting with CMS staff regarding quality aspects of specific waivers; 

and providing resource materials on quality assurance monitoring and 

improvement tools. This contractor is also assessing the types of data 

currently gathered by a sample of states that is, or could be, used for 

quality measurement and improvement; compiling information on selected 

data-driven state quality efforts; and providing technical assistance to the 

states. Finally, CMS sponsored a national conference on HCBS quality 

 3

The MEDSTAT Group is managing the overall contract with CMS. 
Appendix VI: CMS HCBS Quality Initiatives 

Page 55 GAO-03-576 Medicaid Home and Community-Based Waivers 

measurement and improvement in May 2002. This day-and-a-half-long 

conference—attended by state officials, CMS staff, and others—offered 

training and information on strategies and techniques for quality assurance 

and improvement in home and community-based care. 
Appendix VII: Beneficiary Samples for and 

Duration of Regional Office Reviews of 15 

State Waivers Serving the Elderly 

Page 56 GAO-03-576 Medicaid Home and Community-Based Waivers 

 Beneficiary samplesa 

State Target population 

Number of 

waiver 

beneficiaries

Record 

reviews 

Interviews or 

observation

Duration of on-site 

review (days)

Boston regional office 

Connecticut Elderly 7,300 21 21 5

Vermont Residential care 73 14 14 5 

Philadelphia regional office 

Virginia Consumer-directed 

personal attendant 

services 

99 15 b C 

Virginia Elderly and 

persons with 

disabilities 

9,000 20 b 5

Virginia Assisted living 

waiver 

1,166 39 20 5

Dallas regional office 

Oklahoma Elderly and 

persons with 

disabilities 

10,000 40 5 5

Kansas City regional office 

Kansas Frail elderly 4,500 17 11 4

Nebraska Elderly and adults 

and children with 

disabilities 

2,357 25 14 4

Denver regional office 

Montana Elderly and 

persons with 

physical disabilities 

1,514 36 18 5 

North Dakota Elderly and 

persons with 

disabilities 

 390 36 17 5 

South Dakota Elderly 638 28 17 5

Wyoming Elderly and 

persons with 

physical disabilities 

850 38 22 5

San Francisco regional office 

California Disabled, frail, and 

elderly 

16,335 19 10 10 

Seattle regional office 

Oregon Elderly and 

persons with 

disabilities 

36,000 52 b 22.5

Washington Elderly and 

persons with 

disabilities 

24,000 100 b 22.5

Average 7,615 33 15 8

Source: CMS. 

Appendix VII: Beneficiary Samples for and 

Duration of Regional Office Reviews of 15 

State Waivers Serving the Elderly 
Appendix VII: Beneficiary Samples for and 

Duration of Regional Office Reviews of 15 

State Waivers Serving the Elderly 

Page 57 GAO-03-576 Medicaid Home and Community-Based Waivers 

Note: GAO analysis of CMS regional office final waiver review reports for HCBS waivers serving the 

elderly that included information on sample size for beneficiary record reviews or interviews, issued 

from October 1998 to May 2002. 

a

Fifteen of the 21 CMS regional office waiver review reports for HCBS waivers serving the elderly 

included information on sample size of the regional office reviews of waiver beneficiary records. This 

appendix provides a summary of the 15 waiver review reports that included this information. The 

number of waiver beneficiaries is based on those reported in the regional offices’ waiver review 

reports. To the extent that the information was included in the waiver review reports, we have 

provided details on the number of beneficiaries interviewed or observed during the reviews. 

b

The regional office review contained no information on beneficiary interviews or observations. 

c

This waiver review was conducted at the regional office rather than on-site at the relevant state 

agencies. 
Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 

Page 58 GAO-03-576 Medicaid Home and Community-Based Waivers 

Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 
Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 

Page 59 GAO-03-576 Medicaid Home and Community-Based Waivers 
Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 

Page 60 GAO-03-576 Medicaid Home and Community-Based Waivers 
Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 

Page 61 GAO-03-576 Medicaid Home and Community-Based Waivers 
Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 

Page 62 GAO-03-576 Medicaid Home and Community-Based Waivers 
Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 

Page 63 GAO-03-576 Medicaid Home and Community-Based Waivers 
Appendix VIII: Comments from the Centers 

for Medicare & Medicaid Services 

Page 64 GAO-03-576 Medicaid Home and Community-Based Waivers (290105) 
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