CMS-2337-F DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 441 [CMS-2337-F] RIN 0938-AQ35 Medicaid Program; Community First Choice Option
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
SUMMARY: This final rule implements section 2401 of the Affordable Care Act, which establishes a new State option to pr ovide home and community-based attendant services and supports. These services and supports are known as Community First Choice (CFC). While this final rule sets forth the requirements for implementation of CFC, we are not finalizing the section concerning the CFC setting.
DATES: These regulations are effective [OFR--I nsert date 60 days after the date of publication in the Federal Register ].
FOR FURTHER INFORMATION CONTACT: Kenya Cantwell, (410) 786-1025.
SUPPLEMENTARY INFORMATION: I. Executive Summary and Background A. Executive Summary 1. Purpose This final rule implements section 2401 of the Affordable Care Act of 2010, as amended by the Health Care and Educati on Reconciliation Act of 2010, which adds section 1915(k) to the Social Security Act (the Act). The Community First ChoiceOption established a new State plan opti on to provide home and community-based attendant services and supports at a 6 per centage point increase in Federal medical assistance percentage (FMAP). While this final rule sets forth the requirements for implementation of CFC, we are not fi nalizing §441.530, “Setting,” at this time. 2. Summary of the Major Provisions

• This final rule sets out our interpretation of the statutory requirements for eligibility under the Co mmunity First Choice (CFC) Option. Specifically, this final rule clarifies that under the statute, individuals should be determin ed to need an institutional level of care to be eligible for CFC services. This rule also provides States with the option to permanently waive the annual recertif ication requirement for individuals if it is determined that there is no reasonable expect ation of improvement or significant change in the participant’s condition because of the severity of a chronic condition or the degree of impairment of functional capacity.

• This rule specifies the services that must be made available under the CFC State plan option. States el ecting this option must make available home and communitybased attendant services and supports to assi st in accomplishing activ ities of daily living, instrumental activities of daily living, and health-rel ated tasks through hands-on assistance, supervision, and/or cueing. A dditionally, the following services may be provided at the State’s option: Transition costs such as re nt and utility deposits, first month’s rent and utilities, purchasing bedding, basic kitchen supplies, and other necessities required for transition from an inst itution; and the provisi on of services that increase independence or substitute for humanassistance to the extent that expenditures would have been made for the human assist ance, such as non-medical transportation services or purchasing a microwave.• States are required to use a person-cente red service plan that is based on an assessment of functional need and allows for th e provision of services to be self-directed under either an agency-provider model, a se lf-directed model withservice budget, or other service delivery model defined by the St ate and approved by the Secretary. States may offer more than one service delivery model.

• The final rule also implements the requirement that for the first full twelve month period in which a CFC State plan amendment is implemented, the State must maintain or exceed the level of expenditure s for home and community-based attendant services provided under the State plan, waiv ers or demonstrations, for the preceding 12- month period.

• States will receive an additional 6 pe rcentage point in Federal Medical Assistance Percentage (FMAP) for the pr ovision of CFC services and supports. 3. Summary of Costs and Benefits Provision Description Total Costs Total Benefits Provision of home and community based attendant services and supports The Federal and State impacts for FY 2012 are estimated at $820 million and $480 million, respectively. This final rule provides States with additional flexibility to finance home and community-based services attendant services and supports. We anticipate this provision will likely increase State and local accessibility to services that augment the quality of life for individuals through a person-centered plan of service and various quality assurances, all at a potentially lower per capita cost relative to institutional care settings.

B. Section 2401 of the Affordable Care Act The Patient Protection and Affordab le Care Act of 2010 (Pub. L. 111-148, enacted on March 23, 2010), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted March 30, 2010) (collectively referred to as the Affordable Care Act) es tablished a new State plan option to providehome and community-based attendant serv ices and supports. Section 2401 of the Affordable Care Act, entitled “CommunityFirst Choice (CFC) Option,” adds a new section 1915(k) of the Soci al Security Act (the Act) that allows Stat es, at their option, to provide home and community-based attendan t services and supports under their State plan. This option, available October 1, 2011, a llows States to receive a 6 percentage point increase in Federal matching payments for medical assistan ce expenditures related to this option. Under section 1915(k)(1) of the Ac t, States can provide home and community-based attendant serv ices and supports for indivi duals who are eligible for medical assistance under the State plan whos e income does not exceed 150 percent of the Federal Poverty Level (FPL) or, if greater, the income level a pplicable for an individual who has been determined to re quire an institutional level of care to be eligible for nursing facility services under the State plan and for whom ther e has been a determination that, but for the provision of such services, the in dividuals would require the level of care provided in a hospital, a nursing facility, an intermediate care facility for the mentally retarded, or an institution fo r mental diseases, the cost of which could be reimbursed under the State plan. The individual mu st choose to receive such home and community-based attendant se rvices and supports, and the State must meet certain requirements set forth in sect ion 1915(k)(1) of the Act. Section 1915(k)(1)(A) of the Act requires States electing this option to make available home and community-based attendant services and supports to eligible individuals, under a person-centered service plan agreed to in writing by the individual, or his or her representative , that is based on a functional needs assessment. This assessment will determine if the individual requires assistance with activities of daily living (ADL s), instrumental activities of daily living(IADLs), or health-related tasks. The serv ices and supports must be provided by a qualified provider in a home and community-b ased setting under an agency-provider model, or through other methods for the provision of consum er controlled services and supports as referenced in section 1915(k)(6)(C ) of the Act. Section 1915(k)(1)(B) of the Act requires that States make available a dditional services and supports including the acquisition, maintenance, and enhancement of skills necessary fo r the individual to accomplish ADLs, IADLs, and health-related ta sks, backup systems or mechanisms to ensure continuity of services and supports and voluntary training on how to select, manage, and dismiss attendants. Section 1915(k)(1)(C) of the Act prohibits States from providing services and supports excluded from section 1915(k) of the Act, including room and board costs for the individual; special educati on and related servi ces provided under th e Individuals with Disabilities Education Act (Pub. L. 1 01-476, enacted on October 30, 1990) (IDEA) and vocational rehabilitation services prov ided under the Rehabilitation Act of 1973 (Pub. L. 93-112, enacted on September 26, 1973); assistive technology devices and services other than backup systems or mechanisms to ensure continuity of services and supports, medical supplies and equipment, or home modifications. However, some, although not all, of these services can be covered by Medicaid unde r other authorities. Section 1915(k)(1)(D) of the Act sets fort h services and supports permissible under section 1915(k) of the Act that States can provide, including expe nditures for transition costs such as rent and utility deposits, firs t month’s rent and utilities, bedding, basic kitchen supplies, and other nece ssities required for an individu al to make the transition from a nursing facility, institution for mental diseases, or intermediate care facility for the mentally retarded to a community-based home se tting where the individual resides. Statescan also provide for expenditures relating to a need identified in an individual’s personcentered plan of services that increase inde pendence or substitute for human assistance, to the extent that expenditures would othe rwise be made for the human assistance. Section 1915(k) (2) of the Act provides that States offering this option to eligible individuals during a fiscal year quarter occurring on or after October 1, 2011 will be eligible for a 6 percentage point increase inthe Federal medical assistance percentage (FMAP) applicable to the State for amounts expended to provide medical assistance under section 1915(k) of the Act. Section 1915(k) (3) of the Act sets fo rth the requirements for a State plan amendment. States must develop and have in place a process to implement an amendment in collaboration with a Devel opment and Implementation Council established by the State that includes a majority of member s with disabilities, el derly individuals, and their representatives. States must al so provide consumer controlled home and community-based attendant servic es and supports to individuals on a statewide basis, in a manner that provides such services and supports in the most integrated setting appropriate to the individual’s needs, without regard to the individual’s age, type or nature of disability, severity of disabi lity, or the form of home and community-based attendant services and supports the i ndividual requires to lead an independent life. In addition, for expenditures during the fi rst full fiscal year of implementation, States must maintain or exceed the level of State expenditures for medical assistance attributable to the preceding fiscal year fo r medical assistance provided under sections 1905(a), 1915, or 1115 of the Act, or otherwise provided to individuals with disabilities or elderly individuals. States must also establish and maintain a quality assurance system for community-based attendant services and s upports that includes standards for agency-based and other delivery models for traini ng, appeals for denials and reconsideration procedures of an individual plan, and other factors as dete rmined by the Secretary. The quality assurance system must incorporat e feedback from individuals and their representatives, disability organizations, providers, families of disabled or elderly individuals, and members of the communit y, and maximize consumer independence and control. The quality assurance system must also monitor the health and well-being of each individual who receives section 1915(k) services and supports, including a process for the mandatory reporting, investigation, and re solution of allegations of neglect, abuse, or exploitation in connection w ith the provision of such servic es and supports. The State must also provide information about the provi sions of the quality a ssurance required to each individual receiving such services. States must collect and report informati on for the purposes of approving the State plan amendment, permitting Federal oversig ht, and conducting an evaluation, including data regarding how the State provides home an d community-based attendant services and supports and other home and community-based se rvices, the cost of such services and supports, and how the State provides individu als with disabilities who otherwise qualify for institutional care under the State plan or under a waiver the choice to receive home and community-based services in lieu of institutional care. Section 1915(k)(4) of the Act requires that States ensure, regardless of the models used to provide CFC attendant services and s upports, such services and supports are to be provided in accordance with the requirements of the Fair Labor Standards Act of 1938 and applicable Federal and State laws regarding the withholding and payment of Federal and State income and payroll taxes; the provision of unemployment and workerscompensation insurance; maintenance of gene ral liability insurance; and occupational health and safety. Section 1915(k)(5) of the Act sets forth the requirements that States provide data to the Secretary for an evaluation and Report to Congress on the provision of CFC home and community-based attendant services and supports. States must provide information for each fiscal year for which CFC attendant services and supports are provided, on the number of individuals estimated to receive these services and supports during the fiscal year; the number of individua ls that received such serv ices and supports during the preceding fiscal year; the specific number of i ndividuals served by type of disability, age, gender, education level, and employment st atus; and whether the specific individuals have been previously served under any other home and community-based services program under the State plan or under a wa iver. Section 1915(k )(5) also requires the Secretary to submit to Congress an interi m report no later than December 31, 2013 and a final report no later than December 15, 2015. These reports must be available to the public. Finally, section 1915(k) (6) of the Act sets forth the de finitions of specific terms as they relate to CFC. C. Background of Home and Community-B ased Attendant Services and Supports The CFC option expands Stat es’ and individual’s Me dicaid options for the provision of community-based long-term care se rvices and supports. Consistent with the decision of the United States Supreme Court in Olmstead v. L.C. , 527 U.S. 581 (1999), this option will support States in their effo rts to develop or enhance a comprehensive system of long-term care services and supports in the community that provide beneficiary choice and direction in the most integrated se tting. Since the mid- 1970s, States have hadthe option to offer personal care services unde r their Medicaid Stat e plans. The option was originally provided at th e Secretary’s discretion, had a medical orientation and could only be provided in an individual’s place of residence. Personal care services were mainly offered to assist individuals in activit ies of daily living, and, if incidental to the delivery of such services, could include other forms of assistance (for example, housekeeping or chores). In the 1980s, some States soughtto broaden the scope of personal care services to include community settings for the provi sion of services to enable individuals to participate in normal day-to-day activities. Through the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66, enacted on August 10, 1993) (OBRA 93), the C ongress formally included personal care as a separate and specific optional service under the Federal Medica id statute and gave States explicit authorization, under a new section 1905(a)(24) of the Act, to provide such services outside the individual’s residence in addition to providi ng personal care to eligible individuals within their homes. Th is provision was implemented by a final rule published in the September 11, 1997 Federal Register (62 FR 47896) that added a new section at §440.167 describing the option for Stat es to provide a wide range of personal assistance both in an individual’s residence and in the community. In 1999, we released additional guidance as an update to the Stat e Medicaid Manual (SMM ) to clarify that personal care services may include ADLs and I ADLs that all qualified relatives, with the exception of “legally responsible relatives”, could be paid to provide personal care services and that States were permitted to offer the option of consumer-directed personal care services. Additionally, the Omnibus Reconcilia tion Act of 1989 (Pub. L. 101-239, enacted on December 19, 1989) (OBRA 89), revised the Early and Periodic Screening, Diagnosisand Treatment Benefit to include the require ment that all section 1905(a) services are mandatory for individuals under the age of 21 if determined to be medically necessary in accordance with secti on 1905(r) of the Act. Furthermore, before 1981, the Medicaid program provided limited coverage for long-term care services in non-institutional, community-based settings. Medicaid's eligibility criteria and other factors made institutional car e much more accessible than care in the community. Medicaid home and community-based se rvices (HCBS) were established in 1981 as an alternative to care provided in Medica id institutions, by permitting States to waive certain Medicaid requirements upon approval by the Secretary. Sec tion 1915(c) of the Act was added to title XIX by the Omnibus Budget Reconciliation Act of 1981 (Pub. L. 97-35, enacted on August 13, 1981) (OBRA 81). Programs of HCBS under section 1915(c) of the Act are known as "waiver programs", or simply "waivers" due to the authority to waive certain Medicaid requirements. Since 1981, the section 1915(c) HCBS wa iver program has afforded States considerable latitude in designing services to meet the needs of people who would otherwise require institutional care. In 2010, approximately 315 approved HCBS waivers under section 1915(c) of the Act served nearly 1 million elderly and disabled individuals in their homes or alternative residential co mmunity settings. Stat es have used HCBS waiver programs to provide numerous services designed to foster independence; assist eligible individuals in integrating into th eir communities; and promote self-direction, personal choice, and control over services and providers. The Deficit Reduction Act of 2005 (Pub. L. 109-171, enacted on February 8, 2 006) (DRA) added sec tion 1915(i) of theAct which affords some of the same flexib ility and service cove rage through the State plan without a waiver. The section 1915(k) benefit does not diminishthe State’s ability to provide any of the existing Medicaid home and community-bas ed services. States opting to offer the CFC Option under section 1915(k) of the Act can continue to provide the full array of home and community-based services unde r section 1915(c) waivers, section 1115 demonstration programs, mandatory State plan home health benefits, and the State plan personal care services benefit. CFC provides States the op tion to offer a broad service package that includes assistance with ADLs, IA DLs, and health-related tasks, while also incorporating transition costs and supports that increase inde pendence or substitute for human assistance. Additional important aspects of this background are th e passage of the Americans with Disabilities Act of 1990 (Pub. L. 101-336, enacted July 26, 1990) (ADA), and the Olmstead v. L.C. , U.S. Supreme Court decision. In particular, Title II of the ADA prohibits discrimination on the basis of disability by Stat e and local governments and requires these entities to administer their se rvices and programs in the most integrated setting appropriate to the need s of qualified individua ls with disabilities. In applying the most integrated setting standard, the U. S. Supreme Court ruled in Olmstead that unnecessary institutionalization of individuals with disabiliti es constitutes discrimination under the ADA. Under Olmstead , States may not deny a qualified individual with a disability a community placement when: (1) community placement is appropriate; (2) the community placement is not opposed by the in dividual with a disa bility; and (3) the community placement can be reasonably accommodated.Finally, the self-direction service delivery model is another important aspect to the background of this provision and a key component of the CFC option. Two national pilot projects demonstrated the success of self-directed care. During the 1990’s, the Robert Wood Johnson Foundation funded these projects which evolved into Medicaid funded programs under section 1915(c) of the Act and the “Cash and Counseling” national section 1115 demonstrat ion programs. Evaluations were conducted in both of these national projects. Results in both pr ojects were similar – persons directing their personal care experienced fewer unnecessary in stitutional placements, experienced higher levels of satisfaction, had fewer unmet need s, experienced higher continuity of care because of less attendant care provider tur nover, and maximized the efficient use of community services and supports. The DRA al so established secti on 1915(j) of the Act which provided a State plan option for States to utilize this self-direction service delivery model without needing the authority of a section 1115 demonstration. This rule finalizes many of the provisi ons set forth in the February 25, 2011 proposed rule, modifies some such provi sions and allows that one provision, §440.530 “Setting”, will be subject to further comment. II. Analysis of and Responses to Public Comments on the Proposed Rule We received a total of 141 timely items of correspondence from home care provider representatives and other professional associations, State Medicaid directors, unions, beneficiaries, and other individua ls. We received hundreds of individual comments within these items of correspondence, which range d from general support or opposition to the proposed rule, to specifi c questions and detailed comments and recommendations regarding the proposed ch anges. A summary of our proposals, the public comments and our responses are set forth below.A. General
Comment: Many commenters expressed support for the rule. Several commenters strongly believe that everything must be done to he lp keep indivi duals out of nursing homes and in the community. The commenters stated doing so will save taxpayer’s money and increase th e quality of life for individu als who receive services. The commenters believe individu als are valuable to communities and they deserve to have the “cheaper” option of staying home. Another co mmenter indicated that CFC could provide needed assistance to children with special health care needs and their families who wish to remain in their commun ities where they can direct their own service plan. Another commenter indicated that personal care is more humanely provided and more cost effective in the home rather thanin an institution. The commenter believes infrastructure cost of running an instituti on and the need to prot ect the administration detracts from patient care efforts, and be lieves patient care becomes secondary to administrative function. Another commenter re quests the CFC rule be implemented so that all disabled persons, such as the co mmenter’s 31-year old son who is partially paralyzed by a stroke, have a choice of livi ng their own life. Another commenter stated community-based reimbursed services provi de access for the growing group of aging baby boomers. The commenter believes that CFC will support individuals in the setting appropriate to the individual’s need and allow them to lead a more independent lifestyle. The commenters urged CMS to implement the final rule. One commenter was pleased the rule recognized the need for flexibility to “meet States where they are” with regard to the provision of home and community-based services with an eye toward expanding opportunities for consumers. Response : We appreciate the commenters’ perspectives.Comment: A few commenters expressed oppo sition to the proposed rule. One commenter requested limiting excessive rules th at would burden the St ates financially or would be time-consuming to implement. A nother commenter believes CFC violates the
10 th amendment of the United States Constitution by requiring States to perform services that the Federal Government is prohibited from doing by the Constitution. The commenter believes the regul ation should be withdrawn. Response : We disagree with the commenters’ statement that the CFC program violates the 10 th amendment of the United States Constitution. Section 1915(k) of the Act sets forth an option, not a mandate, for St ates to include such services in their Medicaid program. We do not believe the regulation places ex cessive requirements on States, rather it provides States with the necessary guidan ce to implement section 1915(k) of the Act successfully. We also believe the regulation provides partic ipant protections to ensure individuals exercise maximum control of hom e and community-based attendant services and supports.
Comment : One commenter expressed concer n that section 1.B, Background of Home and Community-Based Attendant Serv ices and Supports, omits the section 1930 Community Supported Living Arrangements program, which influenced the development of home and community-based services. The commenter believes this is an important cornerstone of the new program and s hould be included in the final rule. Response : We agree that the sectio n 1930 Community Supported Living Arrangement program has influenced the de velopment of home and community-based services. However, we do not believe th at its specific influence on the CFC option warrants inclusion in the final rule.Comment : One commenter indicates that to implement CFC for the population eligible to receive home and community-based attendant services and supports, as well as to implement the array of services availabl e to eligible indivi duals would be overly expansive. The commenter believes States w ould need additional staffing to assess the needs of the eligible CFC populations, deve lop and maintain the quality assurance systems, and report data. Another commenter expressed concern th at the proposed rule creates some uncertainty about whether States can build upon existing State structures in delivering services under CFC. Response : We recognize that Stat es that do not currently have the infrastructure necessary to support implementation of CFC may experience higher init ial administrative burdens and costs when desi gning their CFC program. We believe the enhanced FMAP provided under CFC will lessen the burden on States, allowing them to serve the population eligible for CFC. Additionally, Stat es may use existing infrastructure, such as a current advisory c ouncil to act as the Developmen t and Implementation Council, as long as the statutory requirements for the structure, composition, and collaborative and consultative role of the council are met.
Comment: One commenter wanted to know the impact CFC will have on the Early Periodic Screening Diagnosis and Treatment (EPSDT) benefit Response: The EPSDT mandate under section 1 905(r)(5) of the Act requires that any medically necessary health care service listed at section 1905(a) of the Act be provided to a Medicaid benefici ary under the age of 21 even if the service is not available under the State's Medicaid plan to the rest of the Medicaid population. CFC services are provided under section 1915(k) of the Act, which is outside the scope of section 1905(a) of the Act and therefore are not required under the EPSDT pr ogram. We note that thisdoes not preclude a State from providing CFC services to any indi vidual who meets the criteria to receive CFC services, regardless of age, and from receiving the added Federal support associated with providi ng CFC services. Furthermore, in addition to meeting EPSDT requirements through the provision of the section 1905(a) services, a State may also meet a particular child’s needs under EPSDT through servi ces that are also available through the section 1915 (k) benefit.
Comment: One commenter expressed concern that the rule should include appeals for reductions in service based on a nything other than a documented change in need. The commenter indicated that his State allows requests for hearings, but stated that they are routinely denied. The commenter stated that the State’s assurances with regard to due process are not reliable and recomme nded that there be a higher standard for the CFC option and other waivers with regard to appeals. Response : We acknowledge the importance of a beneficiary’s ability to appeal service reductions. States ar e required to adhere to the re quirements specified in 42 CFR 431 subpart E for the Medicaid program in ge neral, and for CFC specifically. It is important to note, however, that CFC is a St ate plan option and not an HCBS waiver.
Comment: One commenter explained that th eir State asserts they have no obligation to meet the client’s needs in the community – only that the services authorized be indexed to actual needs. The comme nter also stated that the risk of re-institutionalization is controlled by cl osing institutions, resulting in clients being placed into community placements without th e same level of support provided in an institutional setting. The co mmenter believes that CMS “turns a blind eye” to these issues and that all waivers shoul d respect the clients’ rights to have their needs met in the community. Another commenter expressed co ncern that their State is intentionallylimiting services and that the State has decl ared that they have no obligation to, or intention of, meeting the needs of vulnerable adults in the community. The commenter is concerned the choice guaranteed in the Olmstead decision is not upheld, and wonders why the Federal government goes through thes e pro-forma rulemaking processes when there is no intent to follow-up or enforce the “reassuring words.” Response : We want to clarify that the CFC is a State plan option, not a waiver. We respect the commenter’s opinions, but do not agree with the commenter with regard to the Federal government not enforcing regu lations or ignoring th ese important issues noted above. We also believe that the rule making process is a meaningful process that allows the public to have a voice in how laws passed by th e Congress are implemented by CMS. We echo throughout the regulation that in implementing CFC, States must ensure that individuals are served in the most integrat ed settings appropriate to their needs. We have also worked closely with Medicaid benefi ciaries, as well as States, over the years to assist in determining how the Medicaid program can support them in meeting their Olmstead obligations. This regulation will establish the parameters States must follow in implementing CFC. Additionally, the Data collection requirements described at §441.580, and the Quality assurance system re quirements described at §441.585, require States to provide CMS with information rega rding the provision of CFC services. We encourage all stakeholders to collaborate with States and CMS to ensure these parameters

are met. Comment : One commenter stated that to be consistent with Olmstead , personal choice is required to participate in the CFC option, and the proposed rule should be amended to expressly indicate this right a nd take care not to limit expressions of beneficiary choice to community options.Response : We agree that personal choice is an important part of CFC and have taken steps throughout the regulation to illust rate its importance. Based on feedback received through the comment process, we have decided to amend language in the “assessment of need” and “person-centered serv ice plan” sections, as described below, to strengthen this principle.
Comment : Another commenter stated that the current focus of their State’s Home and Community-Based Services (HCBS) plans is on lowering costs, not meeting all the needs of individuals. The commenter is conc erned that States have too much power and the CFC rule does not correct the imbalance between saving taxpaye r money while still serving the needs of vulnerable adults. Response : The Medicaid program is a State/Fe deral partnership. States have the flexibility to design and administer their Me dicaid programs as long as they meet the Federal requirements set forth in the regulati ons. In addition, States have the choice of providing an array of optional services. The pur pose of CFC is to afford States another option to provide home and community-based serv ices as an alternative to institutional placement. This benefit is not like a waiver pr ogram in that it is not required to be cost neutral in terms of community versus nursing facility costs. While this program should not be viewed individually as the key to ensuring community access, it is an important tool for States to consider as they stri ve to meet their obligations under Olmstead

. Comment: We received many comments asking if CFC can be delivered through managed care under a section 1915(b) waiver authority, or a section 1915(b)/(c) waiver. One commenter expressed concern that the proposed rule does not reference the ability for States to deliver this ru le’s services through Medicaid health plans under a section 1915(b) waiver. The commenter believes that Medicaid hea lth plans have demonstratedtheir ability to provide coordination across a ra nge of services essential to facilitate the choice of community setting for individua ls with disability. The commenter recommended CMS confirm in the preamble that States have the option of implementing the CFC option through Medicaid managed care programs. Another commenter requested States not be subject to additional lim itations or restrictions if they elect to have a managed care organization ad minister their program. Response : We are willing to consider th e implementation of the CFC option through Medicaid managed care programs with a State interested in doing so; however, the State would need to ensure that the delivery system implemented through the (b) waiver would not impede the provision of serv ices as specified in section 1915(k) of the Act. Therefore, we are not revising the regulation text.
Comment: One commenter requested clar ification whether the additional 6 percentage point increase in Federal medical assistance percentage (FMAP) is for expenditures related to both dir ect services and administration. Response : The 6 percentage point increase in FMAP is related to direct services only and does not apply to administrative costs.
Comment: One commenter expressed concern that regulatory requirements for CFC may be duplicative of, or in conflict w ith PACE regulations applicable to PACE organizations. The commenter requested clar ification on the relatio nship of the PACE program and CFC for PACE participants who also meet the eligibility criteria for CFC. Specifically, the commenter questioned if hom e and community-based attendant services may be provided in a manner consistent w ith the PACE benefit under section 1934 of the Act. The commenter also questioned if PACE organizations may provide services under CFC under the agency-provider model or under another model established by a State.Response : Section 1915(k) of the Act does not preclude PACE organizations, or any entity, from providing CFC services as a separate line of business, as long as provider qualifications established by the State are met. However, CFC is a separate and distinct program, with its own statutory a nd regulatory requirements, and may not be provided under the PACE authority.
Comment: One commenter requested CMS include a direct reference to a State’s obligation, in establishing processes for public notice and input, to comply with section 5006(e) of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5, enacted on February 17, 2009) (ARRA) prior to submission of a State plan amendment or other action under section 2401 of the Affordab le Care Act that would have a direct effect on Indians or Indian health pr oviders or urban I ndian organizations. Response : The consultation requirements of section 5006(e) of ARRA require solicitation of advice prior to s ubmission of any State plan amendment, waiver request, or proposal for a demonstration project that is lik ely to have a direct effect on Indians, Indian Health Programs or Ur ban Indian Organizations, in any State in which one or more Indian Health Programs or Urban I ndian Organizations furnishes health care services. These requirements apply to but ar e not unique to CFC. Therefore, we do not believe it is appropriate to in clude these requirements in this regulation specifically. CMS reviews State plan amendments, waiver requests, and demonstration proposals for compliance with the ARRA 5006(e) provisions.
Comment : One commenter requests Medicare expand options to allow individuals to stay at home. Response : This rule implements section 2401 of the Affordable care Act, which is limited to the Medicaid program.Comment : One commenter recommended CMS in corporate provisi ons within the CFC regulation to enable States to implement data systems to monitor the direct-care workforce. Response : We believe the implementation of data systems to monitor the direct-care workforce would be an acceptabl e component of a State’s Quality Assurance System. However, we do not believe there is a need to reference this specifically.
Comment : One commenter requests the term “mentally retarded” be replaced throughout the final document in its entirety with a term such as “developmentally disabled”, “individual with an intellectual disa bility” or other more appropriate language. Response : We appreciate the commenter’s c oncern and note that the rule does not include the term “mentally retarded”, but rather, includes the statutory term “Intermediate Care Facility for the Mental ly Retarded (ICF/MR).” While CMS supports using the term “individuals withintellectual disabilities,” itwould be beyond the scope of this regulation to change the statutory name of ICFs/MR. Since we are only using this term to refer to this specific setting, wh ich has not been renamed in law, we do not believe we can make this change. However, in the October 24, 2011 Federal Register, we proposed in the Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction proposed rule to re place the term “mentally retarded” with “intellectually disabled” throughout our regulations. B. Basis and Scope (§441.500) We proposed to implement section 1915(k) of the Act, known as the CFC Option, to provide home and community-based attendant services an d supports through the Medicaid State plan. We proposed the scope of the benefit include the provision of home and community-based attendant services and su pports to eligible indi viduals, as needed,to assist in accomplishing ADLs, IADLs, and health-related tasks through hands-on assistance, supervision, or cueing.
Comment : One commenter indicated that CFC should be a mandatory benefit. Response : Section 1915(k) of the Act amends the Medicaid statute to add CFC as an optional State Plan benefit, not a mandato ry benefit. It is beyond the scope of a regulation to expand CFC to a mandatory benefit.
Comment : Many commenters stated that this section of the regulation should acknowledge that CFC is in tended to make availabl e home and community-based attendant services and supports to people with di sabilities of all ages as an alternative to institutional placement. Another comment er stated the same, but also included individuals with serious mental illness. Response : We agree with the commenters that the scope of CFC is to provide home and community-based services and suppor ts as an alternative to institutional placement. Furthermore, we received comment s supporting Congressional intent that all individuals receiving CFC services must meet an institutional level of care, consistent with the view that CFC is to provide se rvices and supports as an alternative to institutional placement. We discuss this i ssue in further detail in the response to comments on Eligibility, §441.510. We have revised the eligibility sectio n to clarify that under the statute all individuals receiving CFC services must meet an institutional level of care; however, we do not believe it is nece ssary to revise the basis and scope section explicitly.
Comment : One commenter wanted to know if th ere is State flexibility to focus on a single modality (hands-on or supervision or cueing) or must all three modalities be covered.Response : We believe the statutory language requires that a ll three modalities must be available to individuals.
Comment : One commenter stated that the re gulation should allow for different “benefit” packages for people with different needs; for example, populations such as children versus adults, young adu lts versus older adults. Response : Section 1915(k)(3)(B) of the Act requires that services must be provided without regard to the individual’s age, type or nature of di sability, severity of disability, or the form of ho me and community-based attendant services and supports the individual requires to lead anindependent life. Therefore, States may not differentiate the benefit package; however, services must be provided to individuals based on their needs.
Comment : A few commenters expressed concern with a State’s ability to limit the amount, duration, and scope of CFC. One commenter believes St ates make arbitrary and capricious reductions in services due onl y to budget constraints. These reductions result in an individual’s re liance on “informal care contract s” paid by the individual’s small income to fill the gap of needed services. Another commenter expressed concern that States who take advantage of this new option may impose unn ecessary restrictions on families (such as limiting in-home nursing supports to children who are on ventilators). Response : CFC is a State plan optional serv ice and States may set limits on the amount, duration and scope of services, as long as the amount, duration and scope are sufficient to reasonably achieve the purpose of the service. In addition, these limits must be applied without regard to th e individual’s age, type or natu re of disability, severity of disability, or the form of ho me and community-based attendantservices and supports thatthe individual requires to lead an indepe ndent life. We will be reviewing all State proposals to implement CFC under the State pla n. Our review will include a review of any proposed limitations.
Comment : One commenter requested clarificat ion of what is meant by “severity of disability” and asked if this defini tion would preclude limiting the CFC to the “severely impaired” population. In addition, this commenter raised the concern that if the definition does preclude limiting CFC popula tion, States would lo se the ability to “effectively utilize CFC to se rve unique populations.” Response : As stated above, sect ion 1915(k)(3)(B) of the Act indicates that the services must be provided on a statewide ba sis without regard to the individual’s age, type or nature of disability, severity of disability, or the form of home and community-based attendant serv ices and supports that the in dividual requires to lead an independent life as specified in §441.515. Based on this requirement, the CFC population cannot be limited based on type or severity of disability, as long as the individual meets the eligibili ty requirement set forth in §441.510. States cannot refuse access to CFC, or the ability to self-direct CFC services and supports, because of the severity of an individual’s needs. After consideration of the pub lic comments, this section is being finalized without revision. C. Definitions (§441.505) We proposed several definitions specific to CFC.
Comment : Many commenters applauded CMS for prefacing the list of ADLs with “including, but not limite d to.” The commenters believ e this language recognizes that individuals may have a dditional needs for support.Response : The intent of CFC is to assist individuals with receiving services necessary to have a lifestyle th at is integrated into their co mmunity. Therefore, we do not believe it is appropriate to specify a prescrip tive list that may not address each person’s individualized needs.
Comment : One commenter wanted to know if States are allowed to define ADLs more expansively by adding activities since the definition of ADLs includes the phrase “but not limited to.” Response : Through the State Plan Amendment (SPA) process, States have the flexibility to propose additional factors to be included as components of ADLs.
Comment : A few commenters suggested remo ving the term “self-directed” from the definition of “agency-provider model.” Th e commenters believe the use of this term with the agency-provider model implies that se rvices will be restrict ed to individuals who can fully manage services and supports, and wi ll not allow individua ls who are unable to fully manage them, or who do not wish to do so, from receiving services under the agency-provider model. Response : We believe the commenter is ap plying a different definition of “self-direction” than what is specified within this rule. Section 1915(k)(6)(B) of the Act used the term “consumer controlled” to mean a method of selecting and providing services and supports that allow the indivi dual, or where appropr iate, the individual’s representative, maximum control of the hom e and community-based attendant services and supports, regardless of who acts as the employer of record. In the preamble of the proposed regulation, we elected to use the te rm self-directed rather than consumer controlled to be consis tent with terminology in other Me dicaid provisions. We interpret this to mean that all CFC services are self -directed and it is up to the individual todetermine the level of self-dir ection they want to have. Th erefore we are not adopting the commenter’s suggestions.
Comment : Several commenters requested mo re clarification around the “agencyprovider model.” A few commenters wanted to know if the agency-provider model is the same as what is sometimes referred to as a “co-employment” model. One commenter disagreed with the proposed definition stat ing that an agency-provider model does not mean that an entity contract s for the provision of services and supports. The commenter states the agency-provider model has to do with who the employer is. The commenter also states that under an ag ency-provider model, the indi vidual can still select, train, manage, and dismiss an attendant care provi der. When the attendant care provider is dismissed, the attendant care provider is still employed by the agency and can be selected by someone else. Response : The definition in the rule is from section 1915(k)(6)(C)(i) of the Act. In the preamble of the Servi ce Model section of the propos ed rule, we construed the “agency-provider model” to mean “traditi onal agency model” and an “agency with choice” model. Under the traditional agency model, the individual retains hiring and firing authority of personal care attendants, w ith regard to the receipt of services from a specific personal care attendant. In other words, the employmentrelationship between the personal care attendant and the agency does not change. The agency with choice model utilizes a co-employment relationship between the individual and an agency. We acknowledge that not all agen cy-provider models utilize a contractual relationship between the agency-provider entity and the State Medicaid agency for the provision of services. Rather, it is more common for a provi der agreement to be used. Therefore, we are modifying the agency-provider definition to better reflect the various arrangementsthrough which the provision of personal attenda nt services may occur. We will also modify the language at §441.545(i) to reflect this change. Additionally, we acknowledge the confusion caused by our use of the terms “hire” and “fire.” We will replace such terms with “select” and “dismiss” thr oughout the regulation, as appropriate. We appreciate the commenter’s description of anagency-provider model and believe it is one example of an agency-provider model that fa lls within the definition in the rule. We believe the definition in the rule is broad enough to encompass the various agency-provider types that exist.
Comment : We received a few comments requesting that we define the agency-provider model in a way that clearly in cludes States that provide long term care services and supports directly through public authority entities instead of private contractual arrangement. Response : It is our understanding that the structure of the long-term care services and supports provided through publ ic authority entities vari es among States. It is possible that one State’s public authority entitie s could meet the definition of an agencyprovider type while another State’s public aut hority entities meet th e definition of “other model.” For this reason, we are requesting Stat es to provide a descri ption of such entities during the SPA process.
Comment : One commenter suggests we a dd “as defined by the State and approved by the Secretary” into the definiti on of “backup systems or supports” to ensure consistency with other home and community-based service programs. Response : We do not agree the suggested langu age is necessary. All State plan amendments will require adherence to this regulation’s service definitions and will be approved by CMS.Comment : Some commenters suggested medi cation management be included to the definition of “backup systems.” Othe r commenters requested the definition be revised to ensure coverage of a broad variety of health s upport technologies, such as telehealth, independent living technologies , and remote patient monitoring. The commenter advised that currently 44 States reimburse for Personal Emergency Response Systems (PERS), 16 States reimburse for medication management technology, 1 State reimburses for home telecare/remote mon itoring, and 7 States reimburse for home telehealth/telemonitoring under sections 1905( a), 1915, or section 1115 of the Act. The commenter states that it is im portant that all these technologie s that ensure continuity of services and supports are also available under CFC. One commenter requested that PERS, medication management technol ogy, telecare/remote monitoring and telehealth/telemonitoring should be included in the definition of “backup systems and supports.” Response : Section 1915(k) of the Act indica tes the purpose of backup systems or mechanisms is to ensure continuity of services and supports. We do not believe medication management complies with the intent of backup systems and supports; however, it could be a component of persona l attendant services, or another Medicaid service. We agree with the commenters that telemedicine could be a useful method of providing backup systems or supports. We are av ailable to discuss a State’s interest in using such technology for this purpose, but do not believe the rule s hould be revised to specifically indicate this. Th erefore, we are not revising th e definition of backup systems to include explicit reference to medication management and telemedicine technologies.
Comment : We received many comments reques ting that we expand the definition of “backup systems and supports” to include other approaches, such as written backupplans, action plans such as calling emergenc y agencies or personal emergency contacts, contacting other systems that support indivi duals in identifying backup attendant care providers when regularly scheduled attend ants are unavailable, or other necessary planning to deal with a variety of possible situations which re quire additional services or supports. The commenters also added that backup systems should a pply to all service models, stating that although backup systems ar e most often considered in the context of self-directed services they also apply to services and supports delivered through an agency-provider model. Response : We agree with the commenters th at backup systems and supports may include approaches in additi on to electronic devices. Th is belief is supported by the inclusion in the definition described in th e proposed rule of allowing people to be included as backup supports. Additionally, we agree that e ach individual, regardless of service delivery model, should have a b ackup plan to address how emergencies and unplanned events affecting the continuity of services will be handle d. This belief is supported in the requirement of backup stra tegies as a measure of risk mitigation included in the person-centered service plan, which is required for all CFC participants regardless of service delivery model. We are modifying the requirements of the personcentered service plan to remove the “as needed ” language, to indicate that all individuals should have an indivi dualized backup plan.
Comment : One commenter noted that the rule requires backup systems be made available but excludes assist ive technology devices and assistive technology services. Response : Section 1915(k)(1)(C)( iii) of the Act indicates that assistive technology devices and assistive technology serv ices are excluded, other than those under section 1915(k)(1)(B)(ii) of the Act. This authorizes th e coverage of such devices andservices when used as part of a backup syst em or mechanism to en sure continuity of services and supports.
Comment : One commenter asked that CMS clarify in both the preamble and regulatory text, whether cell phones, hand- held communication devices such as smartphones, and computers that allow partic ipants to communicate with providers of home and community-based attendant servi ces would be allowable expenditures. Another commenter recommended the definition include language explicitly stating that smartphones and more generally, any useful em erging applications or technologies which will become available, are allowable. Response : We do not believe it is necessary to mention specific types of technology. To allow for the inclusion of future developments, we will replace the term “pager” with “an array of av ailable technologies.” We believe the broad definition will support the inclusion of technological advances as they are developed.
Comment : One commenter requested clarificat ion regarding the circumstances in which it would be appropriate for a State to reimburse expenditures for CFC services furnished by a person who is an identifi ed backup support. The commenter also requested that CMS provide guidance on what back up support se rvices a person can provide. Response : The State may reimburse for any CFC service identified on the approved person-centered serv ice plan, including those provided by a backup support person. However, the backup support person woul d need to be recognized by the State as an appropriate provider of CFC services a nd supports, for the Stat e to reimburse those expenditures.Comment : One commenter requested clarific ation regarding how the definition of “health-related tasks” as tasks that can be delegated or assigned by licensed professionals might interact with a State’s statutory exemption from the Nurse Practice Act delegation requirements for health ma intenance activities under a self-directed model. Specifically, the commenter questioned if the State is required to conform to the delegation expectation as defined. Anothe r commenter suggested the definition for “health-related tasks” should include tasks that are exempted from State law and/or licensure requirements. Response : The definition of “health-related tasks” specifies that tasks delegated or assigned by licensed prof essionals may be provided under CFC as long as the task being delegated is done in accordance with the State law governing the licensed professional delegating the task. Recogni zing the variance among State laws governing the specific tasks licensed h ealth-care professionals may de legate, we do not believe we should impose requirements that could cause a licensed professi onal to be out of compliance with the State law in which theyprovide services. We do acknowledge that this State variance will lead to a varied scope of activities meeting the definition of “health-related tasks.”
Comment : One commenter questioned if a State can offer more than one selfdirected option under different authorities of section 1915 of the Act where an item of specific difference is the delegation requirement. Response : In addition to the section 1915(k) authority, self-directed services may be provided under other section 1915 author ities such as the section 1915(c) HCBS waiver authority, sect ion 1915(j) Self-directed Persona l Assistance Services Program State Plan Option, and section 1915(i) HCBS Pl an Option. Each of these authorities hasits own regulatory requirements that must be met, and each may be operated simultaneously with CFC as part of a State’ s Medicaid program. However, the 6 percent additional FMAP only pertains to services authorized under CFC.
Comment : One commenter requested clarificat ion as to whether the definition of “individual’s representative” would allow a St ate to select a self-direction model that limits direction by representatives, for ex ample, to parents of minor children. Response : Section 1915(k)(1)(A)( iv)(II) of the Act requires that services are controlled, to the maximum extent possible, by the individual or wh ere appropriate, the individual’s representative. Itis an expectation that this control exists regardless of whether the individual is pers onally able and has chosen to make his or her own decisions and direct his or her own services and s upports, is represented by someone such as a guardian or parent who is aut horized to make decisions for him or her under the laws of the State, or has selected or appointed a representative. Th is is true regardless of the service delivery model. The State may not place a limit on this statutory requirement.
Comment : Many commenters suggested th e definition of “individual’s representative” explicitly incl ude spouse and partner. The commenters also suggested the definition specify that an au thorized individual is someone who has been designated by the participant or family to represent the participant to the extent the participant wishes. One commenter requested the definition include paid and unpaid individuals chosen by the individual or family. One commenter requested the language be clear that the designation made by the individual does not require a formal process (such as guardianship). One commenter requested that we revise the defini tion of “individual’s representative” to include a broad definiti on of “family” that recognizes a same-sex partner or a child of a partne r as members of the individual’s family. The commenteralso requested the rule use the Office of Personnel Management’s definition of “family member.” Response : In defining the term “individual’s representative” we are aware that States have a variety of laws regarding selection, appointment, designation, or recognition of surrogate decision-makers with respect to personal, financial, and health care matters. We are not requiring a formal pr ocess for the appointment of an authorized representative for the purposes of CFC, but are aware that States may have procedures and requirements that may apply. We do not agree with the suggestions to amend the definition further to list speci fic relationships an individual may have, as we believe this could be inconsistent with the laws of the St ate, or overly prescriptive on an issue that is deeply personal and highly individualized. We believe the definition we proposed is broad enough to allow indivi duals the opportunity to exer cise maximum choice with respect to the individual who w ill act as their representative. In some instances, the individual’s representative unde r State law would have the authority to designate another individual as the representative for the purpose of participating in the planning and direction of services and supports under CF C. We expect the State to recognize the representative chosen by the individual if th at choice is not inconsis tent with State laws unless the State is aware of and can document through evidence that the representative is not acting in the best intere st of the individual or is unable to perform the required functions. To reduce redundancy throughout the regulatory language, we are adding a definition for the term “individual” to mean th e eligible individual and, if applicable, the individual’s representative. We are not requiring in this rule that an authorized representative be chosen using a formal process, such as a court-appoin ted guardian, or the ex ecution of a Power ofAttorney. The authorized representative may be any person an individual chooses to assist him or her in making decisions regard ing his or her care unless that choice is prohibited by State law. We also note that §435.908 provides that the single State Medicaid agency must allow an individual of the applicant’s choi ce to accompany, assist and represent the application in the Medicaid eligibility application or renewal process. The individual assisting in the Medicaid app lication or renewal process need not be the same individual chosen in connection with the provision of serv ices under section 1915(k) of the Act.
Comment : Many commenters requested the rule specify that the authorization of an individual’s representative s hould be in writing or in some other verifiable manner. The commenters expressed concern that so meone may say they are the authorized representative when they are not. The comm enters believe a written authorization is necessary to assure a purposef ul and clear authorization, as well as to eliminate confusion if several individuals state that they represent a person with a disability. Response : We agree with the commenters that a written authorization is generally an appropriate safeguard to ensure indivi duals have an active role in electing a representative of thei r choice. Accordingly, we have re vised the definition of individual representative as follows: “a parent, fam ily member, guardian, advocate, or other authorized representative of the individual with written authoriza tion, when feasible, by the individual to serve as a representative.” We note that a legal guardian would not need to obtain written authorization by the individual to serve as a representative. Likewise, it is not practical to require a minor child to provide written authorization for a parent to serve as a representative. Stat es must have methods in place to ensure the individual wasmaximally involved in the choice of his or her representative, particularly in instances in which the individual is unable to provide written authorization.
Comment : One commenter questioned if an in dividual’s represen tative assisting the individual to self-direct and manage their services can be paid as part of the service plan. Response : Individuals acting as a represen tative are not paid to do so. Individuals acting as a representa tive also should not be a paid caregiver of an individual receiving CFC services and supports. This arrangement was prohibited in the section 1915(j) regulation, to avoid a conflict of inte rest. We are modifying the definition of “Individual’s representative” to continue this prohibition.
Comment : One commenter indicated that th e proposed language broadens the definition of IADLS from the definition inthe SMM. The commenter recommends the rule use the SMM definition, and added that if we do not align the definition with the SMM, we clarify what is meant by “traveling around and participating in the community.” Response : We defined IADLs from the langu age used in section 1915(k)(6)(F) of the Act. We believe “traveling around and participating in the community” alludes to the premise that CFC services and supports should facilitate an individual’ s desire to be fully integrated into their community and not limit the provision of services to an individual’s residence.
Comment : One commenter suggested the defi nition for IADLs include activities such as work life, parenting and basic home maintenance. Response : We appreciate the commenter’s suggestion, however, since the IADL definition includes the language, “ but is not limited to” which allows for the inclusion ofadditional activities determined appropriate for the individual, we do not agree that a change to the definition is needed.
Comment : One commenter stated that the definition of IADLs includes the phrase “but not limited to” and asked if States be allowed to define these terms more expansively by adding activi ties to the definitions. Response : Through the SPA process, States have the flexibility to propose additional services to be include d as components of IADLs.
Comment : One commenter requested confirma tion that since the definition of IADLs include managing finances, the financial management services defined at §441.545(b)(1) can be included as an IADL. Th e commenter also adds that if these activities are permissible IADLs, then it is a required service under §441.520(a)(1) and (2), meaning that States must provide them. Response : Managing finances as an IADL activity pertains to assisting an individual with the management of personal finances. We believe such assistance is beyond the scope of the financial management activities defined at §441.545(b)(1) which is for the exclusive purpose of assisting an individual to ensure CFC service budget compliance with regulatory requirements, and is only for those individuals in a “self-directed model with se rvice budget” delivery system.
Comment : One commenter stated the definition for “other models” is not clear. The commenter asked for clarification as to whether States whos e self-direction model recognizes the consumer as the employer, w ith the authority to hire and terminate employees, and makes available consumer and attendant care provider training opportunities, would meet the de finition of “other models.”Response : Section 1915(k)(6 )(C)(ii) of the Act defines other models as methods other than an agency-provider model, for the provision of consumer controlled services and supports. Such models may include the provision of vouchers, direct cash payments, or use of a fiscal agent to assist in ob taining services. Under the “Service Models” section of the preamble, we interpreted “other models” to mean “self-directed model with service budget.” We further described se lf-directed model withservice budget in §441.545(b)(1), (b)(2) and (b)(3). Based upon the commenter’s information, it is difficult for us to determine if the model described would meet an agency-provider model or the self-directed model with service budget. We recognize th at States utilize various models to provide individuals with different levels of self-direction to r eceive personal attendant services. It is possible for States to use ex isting models under either category, as long as the models meet the requirements of §441.545. To eliminate any confusion, we are addi ng a definition of “Self-directed model with service budget” to mean “methods of pr oviding self-directed se rvices and supports using an individualized service budget. Su ch models may include the provision of vouchers, direct cash payments and/or the use of a fiscal agent to assist in obtaining services.” To permit States to propose additional se rvice delivery models not envisioned in this regulation, we will amend the definition of “other models” to mean “methods other than an agency-provider model or the self-d irected model with se rvice budget, for the provision of self-directed serv ices and supports, as approved by CMS.” We will work with States through the SPA review pro cess to review proposed models.
Comment : One commenter requested the regul ation provide a definition for the term “vouchers.”Response : For the purpose of CFC, vouchers are given a specific monetary value to be used for a specific good or service. Theyare used in various forms, such as tokens, or tickets. We believe the use of vouche rs is common among State programs and the form varies greatly. We believe the term “vouc her” should be defined by the State if they elect to use this structure.
Comment : Several commenters shared thei r support of the “self-directed” definition included in the rule. One comme nter recommended the definition of “selfdirected” should specifically say that the individual or repres entative has control to hire, train, supervise, schedule, determine duties, and fire the attendant care provider. Response : The definition reflects the language at section 1915( k)(6)(B) of the Act. However, we agree with the commenter the definition should include the specific tasks an individual should have authority to do when self-directing CFC services. Therefore, we have revised the definition to say: “Self-directed means a consumer controlled method of selecting and providing services and supports that allow the individual maximum control of the home and community–based attendant services supports, with the individual acting as the empl oyer of record with necessary supports to perform that function, or the individual havi ng a significant and mean ingful role in the management of a provider of service when the agency-provider model is utilized. Individuals exercise as much control as desired to select , train, supervise, schedule, determine duties, and dismiss the attendant care provider.” Upon consideration of th e public comments receive d, we are finalizing §441.505 with revision to the definition of “ind ividual” to incorporate the individual’s representative as applicable, to add the definition of “Self- directed model with servicebudget” and to modify the definitions of “ag ency-provider model”, “backup systems and supports”, “individual’s representative”, “other models” and “self-directed.” D. Eligibility (§441.510) Section 1915(k)(1) of the Act requires that to receive services under CFC, individuals must be eligible for Medicaid und er an eligibility group covered by the State plan. This section does not create a new eligibility group but rather a new benefit option. Individuals who are not elig ible for Medicaid under a group covered under the State Medicaid plan are not eligible for the CFC, even if they otherwise meet the requirements for the option. The proposed rule interprete d the statute as provi ding that individuals eligible under the State Medicaid plan whos e income does not exceed 150 percent of the FPL are eligible for CFC without requiring a de termination of institutional level of care. In determining whether the 150 percent of the FPL requirement is met, the regular rules for determining income eligib ility for the individual’s e ligibility group under the State plan apply, including any income disregards used by the State for that group under section 1902(r)(2) of the Act. We proposed that individua ls eligible under the State Medicaid plan whose income is greater than 150 percent of the FPL are eligible for CFC if it has been determined such individuals need the level of care required under the State Medicaid plan for coverage of institutiona l services. Specifically, we proposed that States must determine that, but for the provision of the home and community-based attendant services and supports , the individual would require the level of care provided in a hospital, a nursing facility, intermediate car e facility for the mentally retarded or an institution for mental diseases, the cost of which would be reimbursed under the State plan. Additionally, we proposed that individu als who are eligible fo r Medicaid under the special home and community-based wa iver eligibility group defined atsection 1902(a)(10)(A)(ii)(VI) of the Act could be eligible to receive CFC services. We stated that these individuals would have to receive at le ast one section 1915(c) home and community-based waiver service per month. As we interpreted the statute in the proposed rule, the need for a level of care dete rmination would be dire ctly related to an individual’s income level in section 1915(k)(1) of the Act. Thus we proposed to require an annual verification of income for all indi viduals receiving serv ices under the section 1915(k) State plan option. We proposed to implement this requirement at §441.510.
Comment : We received many comments both in support and opposition of the proposed language specifying the institutio nal level of care requirement. Two commenters supported the proposed eligibility language because they believe it gives States the opportunity to prev ent or delay institutional ca re, and that providing better integration and coordination of services in le ss costly settings creates the potential for significant cost savings. Some of the co mmenters believe that by not requiring all individuals to meet the standards for an institutional level of care, States would have the option of using CFC program funds for less n eedy individuals who co st less to serve. One commenter believes the eligibility langua ge furthers the spirit of the Olmstead decision. Several commenters indicated that so me States use nursing facility level of care assessments that do not consider the cognitive impairments of individuals, such as those with traumatic brain injury or Alzheimer’s Di sease and that these individuals may not be able to conduct ADLs without cuing or compensatory stra tegies. Several commenters supported the provision specifying that the institutiona l level of care standard should only be applied to individuals with incomes above 150 percent of the FPL, and such a limiting requirement should not be applie d to individuals with income s at or below 150 percent. One commenter indicated that this population is especially vulnerable, with the pooresthealth status and the least resources to pay for services and supports. Some commenters expressed concern with the re quirement that the level of care determination only applies to individuals whose income is above 150 percent FPL. Commenters indicated that section 1915(k) of the Act is based u pon the Community Choice Act [legislation introduced in the 110 th (H.R. 1621/ S. 799) and 111 th (H.R. 1670/ S. 683) Congress, but not enacted] which required all el igible individuals to have an institutional level of care. The commenters believe that re quiring States to serve indivi duals with both institutional and non-institutional care needs could have the un intended effect of dr iving up the cost of implementing this program, and expressed concern that this will be a major deterrent for States to elect CFC. While many of the commenters ac knowledged the statutory language is confusing, these commenters believe the in terpretation provided in the regulation does not reflect Congressional intent. They indicated that the intent of the provision was to make CFC available only to individuals requiring an institutional level of care with the goal of deterring institutionalization or en couraging transitions for institutionalized individuals back to the comm unity. Some commenters provi ded legislative history to support this conclusion. The co mmenters indicated the income eligibility was intended to match the State’s income eligib ility for institutional placement, stating that 150 percent of the poverty line is established as a baseline fo r all States, but if a State allows a higher income level for nursing facility services then the higher income eligibility is what applies. The commenters indicat ed that the intent was to as sure that if an individual could be income eligible for institutional pl acement then the indivi dual would be income eligible for this benefit. The commenters be lieve this interpretation is underscored by the requirement in the statute thatindividuals be given a choi ce to receive the transitionalservices, described in section 1915(k)(1)(D)(i) of the Act , which only applies to the population who would be otherwise elig ible for institutional placement. One commenter requested we not apply aninstitutional level of care to anyone. Another commenter believes the requiremen t for individuals with incomes above 150 percent of the FPL to meet a nursing facility level of care is more restrictive than some State’s existing financial crit eria for some eligibility groups (for example, working disabled). Because of this, the commenter be lieves that many individuals eligible for State plan services would not be eligible for CFC. The commenter requested we reconsider requiring individuals to meet a nursing facility leve l of care so that those who are in need are not left out. Some commenters recommended the rule be amended to require States to limit eligibility to individu als with income of up to 300 per cent of the maximum Federal SSI benefit and an institutional level of care nee d. The commenters suggested that only after a State addresses this eligibil ity group, may a State opt to expand the eligibility to serve lower income persons who do not have an institutional level of care need. Furthermore, the commenters recommended amending the regula tion to allow States the option to only cover individuals who have an in stitutional level of care need. Several commenters requested clarificati on on the flexibility States have to limit who can receive CFC services. Several commen ters expressed concern that States should not be allowed to establish a CFC program th at only serves low income individuals who do not have to meet an institutional level of care. One commenter indicated th e eligibility language in §441.510(b)(2) appears to be inconsistent with the eligib ility language in the “Backgr ound” section. The commenter stated that being eligible for nursing facilityservices in Medicaid differs from requiringan institutional level of care. For example, an individual with a developmental disability may require an institutional level of care at anICF/MR, but that individual would not be eligible for nursing facility services. The commenter recommended the regulation expressly state that an individua l must be eligible for nursing facility services or require an institutional level of car e. Another commenter requ ested clarification around the institutional level provided in an institution for mental diseases (IMD). The commenter stated that IMDs are a payment exclusion, not a f acility type, service or level of intensity. One commenter indicated that it appears that the first reference to eligibility for NF services may be redundant in §441.510 (b)(2 ), and requests we remove or provide clarification as to its purpose. Response : The statute specifically sets forth the eligibility requirements for CFC. In our proposed rule, we interpreted the stat ute based on reading the clause “...and with respect to whom there has been a determin ation that, but for th e provision of such services, the individuals woul d require the level of care pr ovided in a hospital, a nursing facility, an intermediate care f acility for the mentally retarded , or an institution for mental diseases...” to pertain only to the phras e immediately preceding it, which describes individuals with incomes greater than 150 perc ent of the poverty line. However, based on many comments, including those from the Congressional sponsors of CFC and from advocacy groups from the disability community, we have reconsider ed the interpretation of the statute discussed in the proposed rule. We believe that the language, purpose, and history of the statute require a different interpretation. Commenters outlined the detailed historical efforts to have simila r legislation passed since the 105 th Congress and cited statements made during the 111 th Congress’ health reform de bate, that the intent of section 1915(k) is to develop a program that improves access to community-basedalternatives for individuals requiring services at an institutional level of care. Thus, the requirement in section 1915(k)(1) of the Act that the individual require an institutional level of care should be read as an independent requirement, and not as a requirement that modifies only the higher income level. Afte r careful review and consideration of the comments, we agree that secti on 1915(k)(1) of the Act should be read to require that an institutional level of care dete rmination apply to all individu als who would be eligible for community-based attendant servic es and supports. Thus, we ar e issuing this interpretive rule to clarify that under the statute the institutiona l level of care requirement applies to those described earlier in the paragraph whos e income does not exceed 150 percent of the poverty line, as well as to thos e with higher incomes. For individuals whose income is above 150 percent of the FPL, the individual mu st be part of an eligibility group that provides access to the nurs ing facility benefit. We are revising §441.510 to state that, regardless of income, for individuals to receive CFC services, it must be determined, on an annual basis, that but for the provision of CFC services, the individual would meet aninstitutional level of care. We are also revising §441.510 to allow States, at their option, to waive the annual level of care requirement if the State, or designee, determines that th ere is no reasonable expectation of improvement or significant change in the participant’s condition because of the severity of a chronic condition or the de gree of impairment of functional capacity. Lastly, we acknowledge the confusion created byusing the term “level of care furnished in an IMD”. We are revising §441.510 to sp ecify that this means a level of care furnished in “an institution providing psychi atric services for individuals under age 21” and “an institution for mental diseases for indi viduals 65 or over”. This clarification is now expressed at §441.510(d).Comment : One commenter questioned whether CFC is an entitlement program. Response : The CFC program is an optional service available under the Medicaid program. States have the choice of whether to include this service in their Medicaid State plan. As an optional service, States also ha ve the flexibility of offering this service to individuals qualifying for Medicaid under the categorically needy group only, or to both the categorically and the me dically needy under the Medica id State plan. Once the service is offered under a State plan, all elig ible individuals who qualify for the service must be provided the care.
Comment : We received many comments reque sting clarification on whether CFC established a new elig ibility group. Several commenters specifically requested that we allow States, at their discretion, to make the CFC population a separate categorical population for the purposes of automatically qualifying for Medicaid. The commenters stated this would allow people in need of CFC services to qualify for Medicaid in the same way individuals qualify for nursing faci lity services, HCBS waiver services, and HCBS State plan (section 1915(i)) servi ces. The commenters believe the proposed regulation’s language for access to CFC is mo re limited. The commenters do not believe that the Congress intended the e ligibility pathways to CFC to be inferior to the pathways of other similar services and programs. Additionally, commenters noted that a separate CFC eligibility category is needed to allow in dividuals who could qualify for Medicaid in the medically needy category to receive CFC se rvices in States that do not provide State plan services to the medically needy elig ibility category. Another commenter believes the statutory language author izes eligibility fo r a special-income level categorical population. Specifically the commenter be lieves the following statutory language “individuals who are eligible for medical a ssistance under the State plan whose incomedoes not exceed 150 percent of th e poverty line, or, if greater, the income level applicable for an individual who has been determined to require institutiona l care” is a clear reference to the special income level categ orical populations aut horized by 42 U.S.C §1396a(a)(10)(A)(ii)(V) and (VI) (r elating to institutionali zed individuals and HCBS waiver recipients, respectivel y). The commenter believes this language demonstrated Congressional intent to allow States to make the CFC bene fit available to individuals with incomes up to 300 percent of the Federal SSI benefit rate, the same way that States may make nursing facility serv ices, HCBS waiver services, and HCBS State plan benefit services available to them. In addition to the CFC statutory language, the commenter believes that the statutory language in the De ficit Reduction Act and the Affordable Care Act show that the Congress intended to create a new, income-based ca tegorical eligibility population for HCBS State plan and CFC bene ficiaries. The commenter believes that failure to create a separate categorical elig ibility for CFC would result in unfair outcomes for beneficiaries. The commenter believes CMS has discretion to authorize separate eligibility categories. Another commenter requests clarification of the meaning of “eligible for medical assistance under the Stat e plan” with regard to States that have opted to use the special inco me standard at section 1902(a )(10)(A)(ii)(V) of the Act for institutionalized individuals. The commenter believes the CFC statute and the proposed regulation would prohibit access by those who w ould only be eligible for Medicaid by virtue of residing in a medical institution. Response : Section 1915(k) of the Act did not amend section 1902(a)(10) of the Act to the establish a new e ligibility group of individuals receiving 1915(k) services. Section 1915(k) of the Act cr eated new pathways for Medica id eligible individuals to receive home and community-based attendant services and supports. To receive servicesunder 1915(k), individuals must be eligible for medical assistance under the State’s Medicaid plan, must meet an institutional level of care, and be in an eligibility group under the State plan that include s nursing facility se rvices. If the individual is in an eligibility group under the State plan that does not provide co verage of nursing facility services, the individual must have income that is at or below 150 percent of the federal poverty line.
Comment : One commenter believes that i ndividuals must only be eligible for section 1915(c) HCBS waivers or section 1115 de monstrations, rather than be enrolled and receiving waiver services, to be eligible for CFC. Response : Section 1915(k)(1) of the Act provides that individuals must be eligible for Medicaid under an eligibility group covered by the State plan. As noted above, to be eligible for Me dicaid under the special H CBS waiver group, individuals must receive at least one section 1915(c) waiver service per month.
Comment : One commenter requested with re gard to §441.510(b)(3), we confirm that there is not an eligib ility group specific to waiver programs, but that section 1902(a)(10)(A)(ii)(V) of the Act a llows individuals ininstitutions to be eligible under the 300 percent Special Income Gr oup and section 1902(a)(10)(A)(i i)(VI) of the Act allows for application of the 300 percent Special In come Group to those individuals receiving HCBS as an alternative to institutional care. Response : We included the reference to th e special income group in the CFC regulation to highlight that St ates may offer section 1915(k) services to individuals who qualify for Medical assistance under the sp ecial home and community-based waiver eligibility group defined at section 1902(a)(10 )(A)(ii)(VI) of the Act and who receive at least one home and community-based waiver service per month. The special incomegroup is an example of an eligibility group States may cover under the special home and community-based waiver group. It is our inte nt to permit people in section 1915(c) home and community-based waiver programs to rece ive section 1915(k) services also. We are moving this language to §441.510( e), removing paragraph (b)(3), and making a technical correction to replace the te rm “Medicaid assistance” w ith “medical assistance.”
Comment : One commenter requested we clar ify whether an individual qualifying for Medicaid under the Family and Children’s and Medicare savings e ligibility categories are eligible to receive CFC services. Response : Individuals must be eligible fo r Medicaid under aneligibility group covered by the State plan. If these are el igibility groups the St ate covers under its Medicaid State plan, they could be eligible to receive services under CFC as long as the individuals meet all other eligibility cr iteria. However, we note that Medicare beneficiaries eligible for Medicaid only fo r Medicare cost-sharing, such as Qualified Medicare Beneficiaries, would not be eligible for CFC services unless they are eligible for full Medicaid benefits under another State plan group.
Comment : Some commenters requested we clar ify whether a State is required to cover all of the income levels define d at §441.510 or whether a State could limit eligibility to only one or two of the income levels. One commenter questioned if a State could exclude State plan individuals qua lifying under the medically needy group from receiving CFC services. Response : If an individual is eligible for medical assistance under the State plan, meets an institutional level of care; and is part of an eligibility group with access to the nursing facility benefit (or if part of an eligibility gr oup without access to the nursing facility benefit with an income at or be low 150 percent FPL) then the State must allowthe provision of CFC services if the State elec ts to include the CFC st ate option as part of its State plan. Please note that CFC is an op tional service, therefore, as with any other optional service available under the State plan, it is at the State’s discretion to provide these services to the medically needy group in addition to the categor ically eligible group.
Comment : Some commenters questioned if a State has the flexibility to limit CFC recipients to their current FPL or whethe r they would have to expand to 150 percent FPL. Another commenter questioned if a State could impose stricter eligibility than 150 percent of the FPL. Response : Section 1915(k) of the Act does not permit States to increase income standards or to impose stricter income standards for covered eligibility groups. If the income standard for a covered group is less than 150 percent of the FPL, States may not increase it or decrease it for individu als who will receive CFC services.
Comment : One commenter requested clarific ation regarding eligibility groups that are automatically eligible for Medicaid without regard to income, and the application of the 150 percent limit above which institutional level of care is requ ired. For example, some States provide eligibility without an income test to children eligible for foster care or adoption assistance, women receiving treatment for breast or cervical cancer, and individuals with section 1619(a) or (b) status. The commenter requests clarification as to whether States are required to identify income for these groups to determine eligibility for CFC services, or whether States shoul d assume that all individuals in these “automatic” categories are eligible, regardless of level of care status. Response : As indicated above, we have re vised the regulation to require all individuals receiving CFC services to meet an institutional leve l of care. Individuals who meet the eligibility requirements for a Me dicaid group for which the State provides fullState plan services may receive CFC services if : (a) they satisfy th e institutional level of care requirement; and (b) they are in an e ligibility group that includes nursing facility services under the State plan, or, if their eligibility group does not include nursing facility services under the State pla n, their income is at or be low 150 percent of the FPL.
Comment : One commenter requested clarific ation on what is considered a “special population.” Response : We did not use the term “special population” in the preamble or regulatory text. If the commenter is referri ng to our reference to the “special home and community-based waiver eligibility” group de fined at section 1902(a)(10)(A)(ii)(VI) of the Act and our use of the term “special income level group”, we are referring to individuals eligible for Me dicaid through meeting the el igibility for HCBS waivers services under institutional rules.
Comment : One commenter questioned how an i ndividual’s assets are considered in determining financial elig ibility for the CFC option. Response : An individual receiving servic es under the CFC option must be eligible for Medicaid under the State pla n. Therefore, the State’s usual Medicaid eligibility rules would determine whether and how the individual’s assets are counted in determining eligibility for Medi caid. This may vary from group to group. There are no additional special CFC rules regarding assets.
Comment : Several commenters recommende d the regulation allow individuals who would qualify for Medicaid under the medi cally needy eligibilitygroup to qualify in the low-income category. The commenters believe individuals with income over 150 percent FPL in the medically needy gr oup should be included in the low-income group because the medically needy group is required to spend down to 75 percent of FPLto qualify for Medicaid. Th e commenters believe it would be costly and administratively burdensome for States to implement two sets of eligibility criteria for CFC. Several commenters indicated that as written, the pr oposed rules potentiallyexclude individuals who would otherwise qualify fo r a Medicaid-funded nursing facility placement because their gross income would be too high. Th e commenters recommend the regulation be revised to have language clar ifying that individuals who may spend down to Medicaid eligibility under the medically needy category w ould also be eligible for the CFC benefit. Response : The rule does not preclude States from providing 1915(k) services to individuals who are Medicaid elig ible as medically needy. If a State covers the medically needy eligibility group under its State plan, th e State can elect to provide section 1915(k) services to the medically needy. In determin ing Medicaid eligibility for medically needy individuals receiving section 1915(k) services, the State must use the same income and resource methodologies approved under its State plan (for the medically needy), including spend down and any methodologies approved under secti on 1902(r)(2) of the
Act.
Comment : One commenter recommends paragraph §441.510(c) be amended to add language articulating that the regular rules for determini ng income eligibility for an individual’s eligibility group under the State plan apply wh en determining whether the individual’s income is below 150 percent of FPL. Response : We agree with the recommendation made by the commenter and will revise this provi sion accordingly.
Comment : One commenter indicated that ca sh payments to purchase personal attendant services or used to purchase servi ces that substitute fo r human assistance should not be counted as income or resources whendetermining eligibility for public benefitprograms or income tax purposes. The commen ter indicated that problems could arise if the cash benefit is treated as income, that when added to the indi vidual’s actual income would disqualify the individual from the public benefit programs. Response : Disbursement of cash to individuals in accordance with §441.545(b)(2) is for the sole purpose of pur chasing program approved services and supports identified in an indi vidual’s person cente red service plan. Therefore, for the purpose of determining an individual’s Medi caid eligibility, receipt of such monies should not be considered income, nor shoul d it have any effect on an individual’s eligibility for Medicaid. Determining the treatment of income for the income tax purposes is beyond the scope of this rule, as such, we do not have the authority to opine on tax related issues.
Comment : Many commenters recommended th e regulation be modified to explicitly address the Affordable Care Act’ s modification to the spousal impoverishment statute that goes into effectJanuary 1, 2014. The commenter s expressed concern that if CFC is limited strictly to individuals w ho qualify under an eligibility group covered under the State plan before they may receiv e coverage for the be nefit, the community spouse resource allowance will be meaningless for most CFC benefici aries, because most CFC beneficiaries will have been screened against the more limited “couple” resource standard applicable to the category under wh ich they originally qualified. Additionally, commenters requested the full spousal impove rishment protection be extended. Response : The rule does not need to be m odified to reflect section 2404 of the Affordable Care Act because eligibility for the CFC services hinges on independent eligibility under an e ligibility group in the State’s plan. Guidance on section 2404 of the Affordable Care Act is outside the scope of this regulation.Comment : One commenter stated that the e ligibility criteria included in the regulation does not include a needs assessmen t element. The commenter believes that CFC services and supports are not medical and as such it is not appropriate for a State to set “medical necessity” criteria to establish who can receive CFC services. The commenter recommends CMS consider adding a new eligibility element to specifically assess an individual’s need for attendant services. Response : We disagree with the comme nter. Section 441.535 requires an assessment of functional need for each individual receiving CFC services. The information gathered in the assessment must support the determination that an individual requires CFC services.
Comment : One commenter requested the regulation clarify whether both noninstitutional and institutional in dividuals must be served. Response : Although the eligibilit y criteria require indi viduals to meet an institutional level of care, se rvices are only available to i ndividuals residing in a home and community-based setting. Recognizing the purpose of these services includes providing individuals living in institutions the opportunity to transition to a home and community-based setting, we understand that indi viduals may be residing in an institution during the assessment process of the program. However, CFC may not be provided until the individual is residing in the community, with the exception of transitional services.
Comment : A few commenters recommended revising the regulation to add a paragraph to §441.510, clarifying that the CFC op tion is not mutually exclusive and can be provided to eligible Medicaid enrollees in the State who are receiving other non-CFC services and supports under another waiver program. Specifically, the commenters recommend that a paragraph (d) should be added to §441.510 providing that “Individualsreceiving services through CFC will not be precluded from receiving other home and community-based long term care services through other waiver or State plan authorities.” Response : We agree with the commenter and have included the recommended language in a new paragraph (e).
Comment : Several commenters requested we clarify whether States have the flexibility to establish medical or functional el igibility criteria. One commenter asked if a State can impose the same functional eligibil ity requirements that exist for a State’s personal care State plan option. Several other commenters reque sted we allow States to establish medical eligibility criteria that would limit eligibility for the program to individuals who have an inst itutional level of care, regardless of their income. The commenters believe that without this clarification, States could perceive the option as too expensive to adopt if they have to serv e both non-institutional and institutional level beneficiaries. Alternatively, one commenter recommended the regulations require that any medical or functional criteri a States establish for CFC not be more restrictive than the State’s nursing facility or other instit utional level of care requirements. Response : As indicated in an earlier respons e, we are interpre ting the statute to include a requirement that States make dete rminations for all indi viduals receiving CFC services that an institutional level of care w ould be required but for the provision of home and community-based services.
Comment : One commenter supports the eligibility and statewideness requirements in the regulation, indicating th at this will prevent States from limiting services to a numeric amount or to a geographic area, withthe result being increased access to home and community-based services by those in need. The commenter stated that States still have flexibili ty to set medical necessity. The commenter requested CMSmonitor State efforts to educate all beneficiar ies of the program, expr essing concern that States may tailor public relations activities, such as limiting ou treach efforts, to certain geographic areas of the State. Response : States must offer CFC services on a statewide basis. As indicated in an earlier response, all i ndividuals must meet an institutio nal level of care to receive CFC services. Thus, there is no need for States to establish separate medical necessity criteria, for the purpose of determining who may receive CFC services.
Comment : Some commenters recommended th e rule be amended to require States to limit eligib ility to individuals with income of up to 300 percent of the maximum Federal SSI benefit and an institutional leve l of care need. The commenters suggested that only after a State addr esses this eligibility group, ma y a State opt to expand the eligibility to serve lower income persons who do not have an institut ional level of care need. Furthermore, the commenters recommended amending the regulation to allow States the option to only cove r individuals who have an institutional level of care need. Response : As we have stated, we are set ting forth in this final rule our interpretation that under the statute all individuals must meet an institutional level of care to receive CFC services.
Comment : One commenter does not want the institutional level of care requirement applied to the special income group. Response : The special income group is aninstitutional eligibility group. Therefore, States must follow the rules pert aining to the eligibility requirements for the special income group defined at section 1902(a) (10)(A)(ii)(V) of the Act, which includes the requirement that individuals must meet an institutional level of care.Comment : With regard to the special income group, commenters questioned if case management or monthly monitoring would satisfy the requirement that individuals must receive at least one home and comm unity-based waiver service per month. Additionally, the commenters requested the la nguage be revised to say “is receiving at least one home and community-based waiver service per month or monthly monitoring.” Response : The purpose of this language is to ensure that people in the special income group maintain their eligibility fo r Medicaid, thereby adhering to the CFC eligibility criteria that people must be eligible for the State plan. If monthly monitoring is an approved waiver service in the Stat e, this would satisfy the requirement.
Comment : A few commenters requested clarification on whether States had to extend CFC services to individuals in the waiver program. The commenters recommended revising §441.510(b)(3) to state “elig ible if the State elects to expand CFC service coverage to its waiver program.” Another commenter expressed concern about the potential overutilization of se rvices if individuals eligible for waivers are required to continue to receive one waiver servi ce to maintain eligibility for CFC. Response : Individuals enrolled in section 1915 (c) waivers are elig ible to receive any State plan service. Individuals in th e special home and community-based waiver group are required to receive atleast one waiver service pe r month. Section 1915(k) of the Act did not change this requirement. We expect States to implement policies and procedures to prevent overutili zation and duplication of servic es when individuals receive services through a 1915(c) waiver an d the CFC State plan option.
Comment : We received many comments both opposed to and in support of the annual income requirement set forth in §441.510. Some commented on the methods for verification, such as recommending “Passive redetermination” and that incomerecertification for CFC should not be more burdensome, for indi viduals or for States, than the existing Medicaid programs. Response : As explained above, in the final ru le, we are modifying our regulations to make clear that the 150 percent of FPL income determination would only be necessary in cases where an individual is not in a Medicaid eligibility gr oup under the State plan that already provides coverage for nursing faci lity services. In such cases, there would need to be an annual verification of in come for the purpose of determining an individual’s eligibility for CFC services. States that employ passive eligibility re-determination methods for the purpose of Medicaid eligibility could continue to do so. Additionally, we believe it is appropriate for the State to align this CFC requirementwith the annual recertification process for Medicaid. Upon consideration of public comments received, we are modifying §441.510, and are issuing an interpretive rule to clarif y the statutory requirements for eligibility. We are revising the language in §441.510(b) as originally proposed. We are clarifying the statutory requirement that individuals must be in an eligibility group under the State plan that includes nursing facility services. Individuals in an e ligibility group that does not include such nursing facility services must have an income at or below 150 percent of the FPL. We added the language pro posed at §441.510(c) to §441.510(2) with clarification that in determin ing whether 150 percent of the FPL requirement is met, State must apply the same methodologies as woul d apply under their Medicaid State plan, including the same income disregards in acco rdance with section 1902(r)(2) of the Act. We replaced the language proposed at §441.510(c) with the provision that all individuals meet an institutional level of care, removing the term “an institution for mental diseases”and replacing it with “an institution providing psychiatric services for individuals under age 21” and “an institution for mental diseases for individuals age 65 or over,” and adding §441.510(c)(1) and (2) to allow for Stat e administering agencies to permanently waive the annual level of care recertification if certain conditions are met. We have relocated the language proposed at 441.510 (b)(3 ) to a new paragraph (d), and removed the term “Medicaid assistance” and replaced it with “medical assistance.” We are also adding a new paragraph (e) to indicate that receipt of CFC services does not impact receipt of other long-term care services provided through other Medicaid State Plan, waiver, or grant authorities. E. Statewideness (§441.515) To reflect the requirement at section 1915(k)(3)( B) of the Act, we proposed that States must provide CFC services and suppor ts on a statewide basis, in a manner that provides such services and supports in the mo st integrated setting appropriate to the individual’s needs, and without regard to the individual’s age, type or nature of disability, or the form of home and comm unity-based attendant services that the individual requires to have an independent life.
Comment : Many commenters supported the provisions under §441.515. One commenter applauded CMS for recognizing th at people should receive services and supports based on their need rather than a predetermined assumption based on characteristics, such as age or disability. Several commenters further emphasized the ability of this program to enhance State adherence to the Olmsteaddecision and providing services in the most in tegrated setting appropriate to the individual’s needs. Response : We appreciate the perspectives these commenters had in support of this provision of the rule.Comment : One commenter asked CMS to clarify how we will define the “most integrated setting appropriate to the individual’s needs.” Response : This requirement is not defined in the statute and we do not believe that is it appropriate to define this phrase in this re gulation. Rather, we expect States implementing CFC to have meaningful interactions with each individual electing to receive CFC services and supports. Through the assessment of functional need and the development of the person-centered service plan , individuals should be made aware of all living arrangements available for their cons ideration. As indicated below at “Personcentered service plan” (§441.540), a requirement of the service plan is a description of these options and a reflection of the indivi dual’s choice. These protections represent significant advances in facilitati ng individuals’ rights to live in the most integrated setting appropriate to their needs. We plan to pub lish a separate proposed rule to define home and community based settings and issue addi tional guidance which should further assist States in these efforts.
Comment : One commenter recommended that CMS clarify that it is within the State’s discretion to limit the amount, duration, and scope of the required services within
CFC. Response : As indicated in the responses to questions received in the “Basis and Scope” (§441.500) section of the regulation, CF C is an optional benefit and a State may set limits on the amount, duration and scope of the services provi ded under the option, consistent with the regulation at §440.250. However, section 1915(k)(3)(B) of the Act indicates that the services must be provide d on a statewide basis w ithout regard to the individual’s age, type or nature of disabilit y, severity of disability, or the form of home and community-based attendant services and su pports that the individua l requires to leadan independent life. There requirements are reflected at §441.515. A State cannot set limits on the amount, duration, and scope ba sed on any elements listed above.
Comment : A few commenters indicated th at the language in §441.515(c), “in a manner that provides the supports that the individual requires to lead an independent life” is broad. One commenter suggested removing the language, but offered the suggestion of defining such supports in §441.520, “Required Serv ices,” if the language is not removed. Another commenter asked if a State could se t reasonable parameters on the level of support commitment such as an annual serv ice budget amount limit or a cap on the hours of paid care per day. Response : As noted above, States maintain the flexibility to set limits on the amount, duration and scope, except based on the individual’s age, type or nature of disability, severity of disabi lity, or the form of home and community-based attendant services and supports that the i ndividual requires to lead an independent life. While the majority of the language in §441.515(c) was ta ken from the statute, we realize that making this language separate from the language in §441.515(b) could create confusion, so we are taking this opportunity to rem ove §441.515(c) and incor porate its language in §441.515(b) to more directly a lign with the statute.
Comment : One commenter encouraged CMS to issue guidance or add language to the regulation to ensure that CFC is provi ded to all qualified applicants in the State regardless of sexual orientation, gender identity or expression, or marital status. Response : Section 441.500(b) addresses this concern specifying that CFC is designed to make available services and suppor ts to eligible indi viduals. It is not permissible for a State to deny the provision of medical assistance services to eligibleindividuals based on sexual or ientation, gender identity or expression, or marital status. We do not agree that additional language needs to be added to the regulation to clarify.
Comment : A few commenters asked whether States would be afforded the flexibility to target sp ecific populations. Response : As noted above, States electing CFC must provide CFC services and supports on a statewide basis and without regard to the individua l’s age, type or nature of disability, severity of disabi lity or the form of home a nd community-based services and supports that the individual re quires to lead an independent life. This requirement does not allow States to targ et any specific population.
Comment : One commenter requested clarification regarding the statewide implementation of the CFC. Specificall y, the commenter asked if CFC can be implemented throughout the Stat e incrementally over time or if the option must be statewide upon implementation. Response : If a State chooses to implement CFC, it must be implemented on a statewide basis, not phased-in incr ementally throughout the State. After consideration of th e public comments, we are revising this section to remove §441.515(c) and incorporate its langua ge in §441.515(b) to more directly align with the statute. F. Included Services (§441.520) We proposed to reflect the requirements at sections 1915(k)(1)(A) and (B) of the Act that States electing CFC must provide:

● Assistance with ADLs, IADLs, and health-related ta sks through hands-on assistance, supervision, or cueing;● The acquisition, maintenance and enha ncement of skills necessary for the individual to accomplish ADLs, IA DLs, and health-related tasks;

● Backup systems or mechanisms to ensure continuity of services and supports; and

● Voluntary training on how to sele ct, manage, and dismiss attendants. We also proposed to require that Stat es choosing to provide for permissible services and supports as set forth at secti on 1915(k)(1)(D) of the Act, must offer at a minimum, expenditures for transition costs such as rent and utility deposits, first month’s rent and utilities, bedding, basic kitchen s upplies, and other necessities required for an individual to transition from a nursing facili ty, institution for mental disease, or ICF/MR to a community-based home setting where the individual resides. States choosing to provide for permissible services and supports set forth at section 1915(k)(1)(D) of the Act may also include expenditures that increase independence or substitute for human assistance, to the extent that expenditures w ould otherwise be made for human assistance.
Comment : One commenter indicated that the proposed rule is not clear regarding whether all services and supports listed at §441.520(a) must be provided to all individuals served under CFC, and the commenter provi ded cost estimates if each potential participant were provided a pager (including device and monthly serv ice charges). The commenters indicated that it would be cost prohibitive for their State to provide each participant all the services and recommended it be made clear that the services and supports listed in (i) through (iii ) are to be made available based on parameters indicated in each State Medicaid plan. For example, backup systems that include electronic devices may only be needed by persons who have high level of care needs, while personswith greater functioning across ADLs or IADLs may simply require advance planning in case their attendant fails to show up for work. Response : The “Background” and the “Provisionof the Proposed Rule” sections both indicated that the services listed under Required Services must be made available by States electing CFC. This does not mean that each and every individual participating in CFC would receive each of these services. Eachindividual’s needs must be assessed, and only those required services needed by the in dividual must be provi ded. As indicated above, States have the flexibility to decide what backup systems and supports will be offered in their CFC programs as long as thes e systems will sufficiently meet the needs of individuals served under CFC.
Comment : One commenter asked if States could design a CFC program where each participant may not receiv e all of the four required se rvices in paragraph (a). Response : All services listed in §441.520(a) must be made available by any State that elects the CFC. The se rvices authorized for indivi duals must be based upon their individualized assessment of functional need.
Comment : One commenter specifically asked if CFC could be used to support consumers’ employment goals. Response : As indicated at section 1915( k)(1)(C) of the Act, vocational rehabilitation services under the Rehabil itation Act of 1973 are specifically excluded by the statute; however, we affirm that atte ndant services and supports under the CFC could be utilized by an individual wh ile at their place of employment.
Comment : One commenter urged CMS to pr ovide additional guidance regarding the frequency with which required services may be provided stating th at individuals with mental illness may not require assistance w ith ADLs and IADLs 24 hours a day/7 days aweek as these individuals are often able to accomplish these tasks independently, particularly when personal assistance is supplemented by skills training. The commenter suggested that CMS clarify at §441.520(a)(1) th at assistance need not be furnished on a constant, 24/7 basis. Response : While we agree with the commenter that individuals may not require assistance with ADLs and IADLs 24 hours a day/7 days a week, we do not agree that this needs to be clarified in th e regulation. The amount of supports and services provided under this option are determined based on an individualized assessment of functional need.
Comment : One commenter requested that CMS clarify “health-rel ated tasks” and asked if these include medication administra tion and other paramedical tasks such as g-tube feeds, ostomy care, wound care, etc. a nd if so, for individuals self-directing their personal care, would these tasks be furnishe d by personal care attendant care providers who are employed by the individual (respons ible for training and supervising the attendant care provider) where there is no nurse involvement. The commenter also inquired how assistance with medications is accounted for. Another commenter added that State Nurse Practice Acts vary greatly and have very specific requirements regarding what types of health-related tasks may be delegated and/or overseen by licensed medical professionals, such as registered nurses. In addition, the commenter requested that CMS add language acknowledging that the scope of the health-related tasks may vary by State and added that for health serv ices that are not delegated under a State Nurse Practice Act or in States without nurse de legation, such services woul d have to be delivered under State plan home health or wa iver skilled nursing benefits.Response : The statute specifically defines “h ealth-related tasks” as “specific tasks related to the needs of an individual, which can be delegated or assigned by licensed health-care professionals under State law to be performed by an attendant.” Given this definition, activities that ar e not able to be delegate d or assigned by a licensed professional under State law are not “health-r elated tasks.” Recognizing the variance among State laws governing the specific task s licensed health-care professionals may delegate, we recognize that the scope of “health-related tasks” will differ by State. This will be the case regardless of the service de livery model utilized by the State, including self-direction. We agree with the commenter that activities outside the scope of “healthrelated tasks” may continue to be clai med, as appropriate, through other Medicaid authorities such as home health, rehabilita tive services, services provided by other licensed practitioners, etc.
Comment : One commenter indicated strong su pport for inclusion of the phrase “hands on assistance, supervision, or cueing” in §441.520(a)(1), as persons with different disabilities require different types of assistance. Anot her commenter urged CMS to consider whether the use of “and/or” in “ha nds on assistance, s upervision, or cueing” would make it clear that a combination of methods may be used for any particular individual, depending on what is needed. One commenter asked if there is State flexibility to focus on only a single modality (h ands-on or supervision or cueing) or if all 3 modalities must be covered. Response : We understand that what is neededto assist with ADLs, IADLs, and health-related tasks will vary from individual to individual an d expect that any one, or a combination of, hands on assistance, superv ision, or cueing coul d be necessary to accomplish these tasks. As such, all three moda lities must be available, however, it is anindividual’s assessed needs and person centered plan that wi ll determine which will be provided. We agree with the co mmenter and have revised the rule to include “and/or” to make our intent clear.
Comment : A few commenters asked if there was any additional guidance regarding what services constitute the “ac quisition, maintenance, and enhancement of skills necessary for the indivi dual to accomplish ADLs, IADLs, and health-related tasks.” Several commenters indicated that States s hould have the same di scretion they already exercise in structuring thei r waiver programs and recommen ded that CMS make explicit that States will have the discretion to define the services that will be provided to assist consumers with the “acquisition, maintenan ce and enhancement of skills necessary for the individual to accomplish ADLs, IADLs, and health-related tasks” and suggested the following language be added to the rule: “a s defined by the State and approved by the Secretary. ” Another commenter adde d that to assure consistency with other home and community-based services programs and to al low States to define services, CMS should revise paragraph (a) to add “If a State el ects to provide the Community First Choice Option, the State must provide all of the follo wing services as defined by the State and approved by the Secretary.” Response : The “acquisition, maintenance, and enhancement of skills necessary for an individual to accomplish ADLs, IADLs, and health-related ta sks” is a direct provision of the statute and we agree with the commenters that States should have the same discretion they currently have to define their programs, particularly, since CFC is an optional benefit. We have chosen not to specifically define this component of the CFC benefit to facilitate State flexibility. States will n eed to define how they will implement thiscomponent through their SPAs. States coul d choose several methods to meet their obligations for this component of the benef it, including, but not limited to, incorporating functional skills training and/or the use of perm issible services and supports that facilitate the acquisition, maintenance, and enhancem ent of skills through the purchasing of services and/or supports that increase independence or subst itute for human assistance. We are available to provide technical assistan ce to States in determining alternative ways to satisfy this requirement.
Comment : A commenter noted that for the acquisition, maintenance and enhancement of skills, such services may be unrealistic or unnecessary for elderly persons in extremely fragile health, or whos e health is deterior ating (such as cancer patients), but appropriate for other persons with disabilities. The commenter believes that the statute gives States fl exibility in these cases by identifying the acquisition, maintenance and enhancement of skills as an “included service and support” and recommends the CMS clarify in the regulations that States provide these services to individuals likely to benef it from them, based on the asse ssment of functional need and individual service plan, and consistent with the CFC philosophy of self-direction. Response : We appreciate the perspective of this commenter. Ultimately, each individual’s assessment of functional need shou ld determine whether or not an individual needs the acquisition, maintenance, and enhancement of skills necessary for accomplishment of ADLs, IADLs, and health-relat ed tasks. If it is determined that an individual needs them, a State would be required to provide them, according to the parameters of the person-centered servic e plan discussed at §441.540. However, we do reiterate a State’s ability to put limits on th e amount, duration and scope of CFC services, as long as these limits are not based on the indi vidual’s age, type or nature of disability,severity of disability, or the form of hom e and community-based attendant services and supports that the individual re quires to lead an independent life, as prohibited in the

statute. Comment : A commenter stated strong suppor t for both the inclusion of backup systems or mechanisms to ensure continuity of services and supports, and the training of how to select, manage and dismiss attenda nts referenced at §441.520(a)(3) and (4), respectively. One commenter questioned if cell phones funded under Federal programs (for example, Safe Link) can be considered for use to meet backup system requirements. Another commenter recommended amending this rule to allow for plans of action in case of emergency, such as identifying a friend or relative who coul d be called upon if a provider does not show up, or calling fo r emergency backup through a local public registry. One commenter suggested that the pl an for continuity of services (if existing services are disrupted) should be flexible and participant-driven, much like the plan for services. Response : There are various options for b ackup systems. We agree with the commenters that backup systems and supports may include approaches in addition to electronic devices. This belief is supported by the inclusion in the definition described in the proposed rule of allowing people to be in cluded as backup supports. We agree that a cell phone funded under another program (Federal or otherwise) could be used as part of a backup system, assuming doing so does not violate any terms of use required by the other program. However, it is important to note that items or services provided through another program or benefit are not eligible for Federal financial participation (FFP) under
CFC.Comment : One commenter voiced concern th at States will develop a “canned” “one size fits all” voluntar y training package or program specified in §441.520(a)(4), and suggested that the voluntary training needs to be very fl exible and individualized. Another commenter recommended that training be a required step in demonstrating that the individual has the tools to select, mana ge, and dismiss attendants. One commenter indicated that, consistent w ith the philosophy of self dire ction, this training must be voluntary and not a mandatory requirement fo r the individual to receive services under CFC, and requested that CMS allow States to provide established, existing consumer training programs already available to cons umers/employers. Another commenter stated that, it is important that all training content and procedures be driv en by the participants themselves, and while the proposed rule specif ies that training be “developed” by States, the commenter pointed out that various trai ning curricula already exist, and suggested that one method to control costs would be to modify and adopt existing training approaches, as long as such training is agr eed upon by participants and the methods are sensitive to the training needs of the targeted groups (for example, accessible format, at no cost, web-based, etc.). Another commenter encouraged CMS to allow States to retain the authority to develop this training with a le vel of flexibility that would be appropriate to meet the needs of all potential CFC participants. Response : As the commenters indicated, ma ny States currently have existing consumer training programs available that coul d potentially be levera ged or modified to meet this requirement. These training programs should be able to meet the needs of individuals at varying levels of need with regard to se lecting, managing, and dismissing attendants. As we stated in the proposed ru le, consistent with the philosophy of self direction, and in keeping with the statute set forth at section 1915(k )(1)(B)(iii) of the Act,this training must be voluntary, and may not be a mandatory requirement for the individual to receive se rvices under this option.
Comment : A few commenters suggested that CMS create a separate section for permissible purchases to reduce confusion. One commenter added that since §441.520(b) begins a list of optional serv ices, CMS should begin a new se ction here to clarify that these services are not require d services. The commenter added that CMS should clarify at (b)(1) that “the waiver” would not cover rent as this is excluded. Response : We are renaming §441.520 as “Included Servic es” to reduce confusion and to highlight that permissible se rvices and supports inparagraph (b) are at the State’s option. We also reiterate that CF C is not a waiver program, but rather a new optional service authorized under the Medicaid State plan. With regard to the commenter’s suggestion about the exclusi on of rent, while “room and board” are excluded services, expenditures related to tr ansition costs, including the first month’s rent, are the exception. Theref ore, we do not agree that revisions are necessary.
Comment: One commenter asked whether anindividual receiving services through CFC and a section 1915(c) waiver coul d receive assistive de vices if they are covered services in the waiver. Response : Assistive devices a nd assistive technology se rvices may be provided under CFC if the requirements under §441.520(b) are met. It would be up to the State to choose whether to provide these items through a waiver, or through CFC, if an individual is participating in both programs.
Comment : One commenter asked that CMS clarify the minimum services that must be offered if a State chooses to provide permissible services.Response : While we proposed to require that States offering permissible services and supports must at a minimum provide for tran sition costs, we realized that the statute does not provide a basis to require such serv ices and supports. Ther efore, the provision of permissible services and supports are at the State’s op tion. We strongly encourage States to consider providing for the transition services and supports at paragraph (b)(1) under §441.520.
Comment : One commenter indicated that States need to have the flexibility in permissible purchases to set limitations on these costs includ ing the total amount, recurrence, etc. Response : States have the flexibility to de sign their CFC benefit as long as all requirements are met. States maintain the flexibility to set reasonable limitations on the costs of permissible services and supports. We encourage States to consider the ability of beneficiaries to actually return to the community when establishing limits on these services and supports. We will work with St ates on an individual basis to ensure the intent of the legislation is me t, while acknowledging the realitie s of State fiscal situations.
Comment : One commenter voiced concern th at permissible purchases, including expenditures necessary for an individual to transition from institutional care and expenditures for items that could increase independence or substitute for human assistance, are considered optional for Stat es electing to offer CFC. The commenter added that these optional services in many cases would make the difference between whether an individual can live successfully in the community or not and suggested that CMS should more strongly encourage States to allow the purchase of these services, perhaps by providing some additional incentive for States to do so, financ ial or otherwise.Response : We agree with the commenter that transition costs can be crucial for an individual as it relates to being able to transition from an institution to the community. We also agree that many items that incr ease independence or s ubstitute for human assistance have the potential to make a significant difference in an individual’s life while also being cost-effective. We hope that th e enhanced match included in CFC, and the potential for cost savings, will be an incentive to States to include permissible services and supports in their CFC programs. We ar e also revising the language in paragraph (b)(1) under §441.520 to reference a “home and co mmunity-based setting” rather than a “community-based home setting.”
Comment : One commenter suggested that expe nditures related to transition costs should include funding for basic home modifi cations to expand the supply of physically accessible housing options. Such modifications to entrances or bathrooms, for example, could make an otherwise inaccessible unit accessible at a reasonable cost. This commenter also indicated that while the propos ed rule states thatindividuals are not required to save an amount in a budget to purchase items that increase independence or substitute for human assistance, it should be made clear that individuals should not be pressured to purchase items if it would unduly reduce the hours of personal assistance in a manner that negatively imp acts overall service needs. Response : At the State’s option, and consistentwith the statute, where a service is based on a need identified in the pers on-centered service plan, qualifying home modifications may be provided either as a tran sitional costs or as a way to increase an individual’s independence or as a substitute for human assistance. We further address this in §441.525(e). We also agree that individuals should not be pressured to purchaseany items if such purchases would reduce the number of hours of assistance in a manner that would negatively impact them.
Comment : One commenter suggested that institutions other than nursing facilities, IMDs, or ICF-MRs should be incl uded among the list of institutions from which individuals could transiti on, as often individuals with se rious mental illness reside in smaller institutional settings such as adult homes or large group homes. The commenter indicates that these funds woul d be necessary for transitions from those settings. The commenter suggested that paragraph (b)(1) be amended to include “adult homes for people with mental illness and group homes with over four residents.” Response : Section 1915(k)(1)(D)( i) of the Act sets forth requirements that expenditures for transition costs are available “f or an individual to make the transition from a nursing facility, and inst itution for mental diseases, or intermediate care facility for the mentally retarded.” Therefore, we are not revising the regul ation as suggested.
Comment : One commenter asked if States can limit the CFC transition benefit to individuals not eligible for tr ansition services under either section 1915(c) of the Act or Money Follows the Person (MFP) program. The commenter also asked whether the transition benefit can differ from what is already offered in the State through section 1915(c) of the Act. Response : CFC services must be provided with out regard to the individual’s age, type, or nature of disability, severity of disability, or th e form of home and communitybased attendant services and supports the individual requires to lead an independent life. Thus, a State may not propose to provide a se rvice to only to a s ubset of the population eligible for CFC services. We recognize ther e may be instances in which individuals are eligible for similar services under more than one Medicaid authorit y. As indicated in§441.510(e) individuals receiving CFC services will not be precluded from receiving other home and community-based long-term care services and supports through other waiver, State plan or grant authorities. To prevent duplication of the provision of services to the same individual, steps mu st be taken when developing the personcentered service plan, to prev ent the provision of unnecessary or inappropriate care, as required at §441.540(b)(12).
Comment : One commenter asked if States will need to contemplate and detail in the State plan amendment, all potential supports/services th at may be allowed (presumably under permissible services) and wh ether or not States can define specific exclusions. Another commenter asked that CMS clarify wh ether permissible purchases are only available under the self -directed service model or if it applies to the agency model as well. Response : A State would not be required to detail each item they would allow under permissible services and supports. States will need to indicate in the State plan amendment electing CFC whether they will be offering such services and supports, and any limitations they propose to include. States will also be asked to identify whether they will include items that increase independence or substitute for human assistance as permissible services and supports. Permissibl e services and supports are available at the State’s option regardle ss of service model.
Comment : Several commenters strongly supported the first component of section 1915(k)(1)(D)(ii) of the Act that permits States to make expenditures available for individuals to acquire items that increase independence or substitute for human assistance and also supported the inclusi on of this flexibility in the CFC proposed rule, but stated that the second component of this statemen t (“to the extent that expenditures wouldotherwise be made for human assistance and are related to a need identified in an individual’s person-center ed plan”) may actually lead to mo re restrictions than necessary. The commenters stated that the purchase of innovative goods and services may not replace human assistance, but rather make su ch assistance more effective (for example, the use of devices to support transferring individuals from their bed to a wheelchair) and suggested that addressing independence or substituting for human assistance is more appropriate. The commenters also stated that it is also important to recognize that some people who require CFC will not have the benefit of increasing independence, but rather may be successful at sustaining current functi onal ability or minimizi ng the restriction of independence that is occurring due to changes inhealth status and s uggested that the CFC rule should be reflective of this reality. Response : We appreciate the points made in this comment and fundamentally agree with them. The language in the proposed regulation was taken directly from the authorizing legislation. Howeve r, we believe that “increas e independence or substitute for human assistance” is sufficiently broad to encompass all the scenarios identified by the commenter. We do not interpret the term “substitute” to mean only the total replacement of human assistan ce; therefore, the regulation would allow the purchase of items that just decrease the need for human a ssistance. We also agree that independence may be viewed to be “increased” by purc hases aimed at preventing its decline.
Comment : One commenter questioned in cluding the same language at §441.520(b)(3) as in §441.525 regard ing the potential for providing some otherwise excluded services if they are based on a n eed in the service plan, as the language in paragraph (b)(3) is broad when applied to all permissible servi ces, and this languagecould put a difficult burden on consumers to identify all possible future support needs during the care assessment phase. Response : We do not anticipate a burdenbeing placed on individuals to determine possible future needs during the f unctional need assessment or development of the person-centered plan. Boththe assessment and the plan must be revised, as indicated in §441.535(c) and §441.540(e), respectively, atleast every 12 months, when the individual’s circumstances or needs change significantly, and at the request of the individual or the individual’s representative. These protec tions are sufficient to address any future needs.
Comment : One commenter asked specifically who coordinates the assessment and person-centered plan and whether there is a requirement that a separate Targeted Case Management service accomplish these task s. The commenter also asked if these coordination services would be eligible fo r the enhanced match. Another commenter encouraged the addition of care coordination as a permissible service as this is essential for individuals with long-term care needs, and added that States may be more inclined to utilize CFC if this is a component that would also receive the enhanced FMAP. Response : Targeted Case Management is a Me dicaid service separa te and distinct from CFC. There is no Targeted Case Mana gement requirement in CFC. States may choose to use Targeted Case Management to assist with coordination and linkage functions for individuals participating in CFC, as long as all Targeted Case Management requirements are met. While we agree that care coordination is a beneficial service component for individuals with long-term care needs, care coordination was not a component that was included in the CFC statute, and therefore, would not be eligible for the enhanced FMAP.Comment : One commenter indicated that St ates should be allowed to provide services in CFC that are currently allowable under section 1915(c) waiv ers, such as home delivered meals, adult day services, and non me dical transportation if these services are an identified need in the service plan, as these services allow seniors and those with disabilities to live as independently as po ssible in their own homes and communities. Response : States that choose to offer permissi ble services and supports have the option to provide for items that increase independence or substitute for human assistance, to the extent that expenditures would have been made for human assistance, as long as the item meets the requir ements at §441.520(b). Upon consideration of public comments received, we are finalizing §441.520 with revision, changing the title of this section to “Included Services”, modifying paragraph (a)(1) to refer to “... hands-on assistance, supervision, and/or cueing”, modifying paragraph (b) to indicate thatitems covered under transition costs must be linked to an assessed need and adding the phrase “At the St ate’s option” to clarify that paragraphs (b)(1) and (2) that follow are both at th e State’s option, revising the language in paragraph (b)(1) to reference a “home and community-based setting” rather than a “community-based home setting.” and rem oving paragraph (b)(3) and relocating the language to 441.520(b). G. Excluded Services (§441.525) Consistent with section 1915( k)(1)(C) of the Act, we proposed to exclude the following services from CFC:

• Room and board costs for the individual, except for allowable transition services described in §441.520(b)(1) of this subpart.• Special education and rela ted services provided unde r the Individuals with Disabilities Education Act that are related to education only, and voc ational rehabilitation services provided under the Rehabilitation Act of 1973.

• Assistive devices and assist ive technology services othe r than those defined in §441.520(a)(3) of this subpart (incorrectly specified as §441.520(a)(5) in the proposed rule, which does not exist) or those that are based on a specific need identified in the service plan when used in conjunction withother home and community-based attendant services.

• Medical supplies and equipment.

• Home modifications. Consistent with section 1915( k)(1)(D) of the Act, we proposed to allow certain otherwise excluded items if theyrelated to an identified need in an individual’s service plan that increase an individual’s independence or substitute for human assistance, to the extent that expenditures would otherwis e be made for the human assistance.
Comment : One commenter noted that the ru le required backup systems to be made available, but excluded assistive t echnology and assistive technology services. Response : We appreciate this commenter’s perspective. The statute provides that the excluded services and supports are “subj ect to subparagraph (D)” which defines permissible services and supports to include expenditures relati ng to a need identified in an individual’s person-centered service plan that increases indepe ndence or substitutes for human assistance. From our experience with Cash and Counseling demonstrations, section 1915(j) and 1915(c) authorities, we know that assis tive technology devices and services often fall under the category of items that increas e independence or substitute for human assistance. Therefore, we proposed in the rule that some ite ms or services thatcould be classified as assistive technology de vices or services coul d be covered, but only when based on a specific need in the person-ce ntered service plan. We are maintaining this flexibility in the final rule.
Comment : Several commenters recommended that CMS include in the final regulation that Medicaid reimburse ment for room and board for a personal attendant is an allowable expenditure as this is consiste nt with the SMD letter included with the section 1915(c) waiver guidance and CFC should be consistent with current CMS policy. Response : We appreciate the commenters ’ suggestion and acknowledge that section 1915(c)(1) of th e Act indicates that excluded “room and board” costs shall not include amounts States may defi ne as rent and food expenses for an unrelated personal caregiver residing in the same household with the individual. Such amounts are part of the cost of delivering the service; they are not room and board for the individual. No such clarification was included in the statute for section 1915 (k) of the Act; it speaks only to excluded room and board cost s “for the individual.” To continue efforts to align CMS policy across Medicaid authorities whenever appropriate, we agree with the commenter. Room and board costs attributable to an unrelated attendant re siding in the same household would be considered appropriate for reimbursement as a CFC service, as these costs are part of service delivery for “assistance in accomplishing ADLs, IADLs, and health-related tasks.”
Comment : Multiple commenters stated that it is appropriate to pay for assistive technology, medical equipment, and home modi fications when coverage is based on an identified need in a service plan and used in conjunction with other home and community-based attendant services. One co mmenter added that th e proposed regulation was in keeping with the intent of CFC to be primarily an attendant services benefit andindicated that it made sense to allow States to balance the use of these items in relation to attendant services. Multiple commenters supported the proposal to only exclude coverage of assistive devices, medical equipment, and home modifications in circumstances where they would be the sole needed service in an individual’s service plan. Another commenter added that coverage of other services and supports encourages increased independence which is a key goal of person-centered services and is cost effective. Multiple commenters commended the inclusion of the language referencing the exclusion of services “that are related to education only” in paragraph (b). One commenter indicated that they understood th e reasoning behind allowing some items that increase independence or substitute for hum an assistance, but were unclear how the requirement that they be used in conjuncti on with another CFC service furthered that goal, as there are many forms of assistive technology that, independent of all other services, can reduce dependency and substitute for human assistance. Response : We agree that it is appropriate to pay for items that increase independence and substitute for human assist ance. However, after reviewing comments and further consideration of the statute, we do not believe it is necessary to require that such items must be used in conjunction w ith other home and community-based attendant services. Section 1915(k)(1)(C) of the Act indicates that excl uded services are subject to subparagraph (D) which indicate s that States may cover “expe nditures relating to a need identified in an individual’s person-centered plan of servi ces that increase independence or substitute for human assistance...” There is no statutory requireme nt that these items be provided “in conjunction with other home and community-based attendant services.” We are concerned that maintaining this re quirement could result in an individual not receiving needed services. Therefore, we are revising §441.525(c) to remove therequirement that assistive devices and assis tive technology services meeting the requirements of §441.520(b)(2) have to be used in conjunction w ith other home and community-based attendant services.
Comment : Several commenters urged CMS to ensure that the actual text of the regulation reflect the intent expressed by CMS to allow assistive technology, medical equipment, and home modifications when covera ge is based on an identified need in the service plan. Response : We have revised §441.525(d) and (e) to clarify the treatment of medical supplies, medical equipment, and home modifications. We believe this flexibility for assis tive technology devices and assistive technology services is already clear.
Comment : Multiple commenters indicated that the preamble language on page 10740 of the proposed rule stating that CF C “would not include services furnished through another benefit or section under the Ac t” is overly broad and should be amended to read “would not include certain specific types of servi ces furnished through another benefit or section under the Act.” Response : The language in the preamble ex cluding services from CFC when furnished through another benefit or section und er the Act was not incl uded in the actual regulation text. Since section 1915(k) of the Act specifies the services that are available under the CFC State plan option, and such a proh ibition was not specified in statute, we have decided to not include such a prohibi tion in the CFC regulation. As indicated earlier, steps must be taken wh en developing the person- center ed service plan to prevent the provision of unnecessary or inappropriate care, as requ ired at §441.540(b)(12). Tomeet this requirement, we expect States to implement policies and procedures to prevent the duplication of services thatmay be available under more than one Medicaid benefit.
Comment : One commenter indicated thatthe statute excludes assistive technology devices and services and acknowledged that the pr oposed rule noted that the statute does not define the terms, which coul d be read broadly to exclude devices or services allowed under sections 1915(k)(1)(D)(i) or(ii) of the Act. The commenter stated that because CMS only excludes devices and serv ices that do not serve a specific need in the person-centered service pl an, the implementation of this regulation may become too restrictive as advances in technology may be accommodated too slowly because individuals may have imperfect information on the devices and services that may suit their particular needs. Response : The statute is clear at section 1915(k)(1)(D)(ii) of th e Act that these expenditures must be related “to a need identi fied in an individual’s person-centered plan of services.” If advances in technology result in an item th at would meet an individual’s identified need, it would potentially be allo wable as a permissible service or supports. Both the assessment and the service plan mu st be revised, as i ndicated in §441.535(c) and §441.540(e), respectively, at least every 12 mont hs, when the individual’s circumstances or needs change significantly, and at the re quest of the individua l or the individual’s representative. These protections are sufficient to address any future needs. It is also important to note that States have the flexib ility to choose whether or not to provide for permissible services and supports as they are not a required service.
Comment : One commenter asked CMS to clarify whether examples such as a walk-in shower to allow for a wheeled show er chair to be used for bathing, kitchen adjustments to permit someone with functional limitations to prepare his or her ownmeals, or moving a washer/d ryer upstairs may qualify unde r such a definition. One commenter urged CMS to include additional examples of eligible assistive technology devices and services that could be in cluded including medication management technology, home telecare/remote monitoring, and telehealth/telemonitoring, as these may assist personal attendant and health-rel ated services under CFC in the future. Another commenter strongly suppo rted inclusion of items such as environmental controls and telecare, stating that these could be ve ry cost-effective and improve the independence of persons with disabilities as such tec hnology or devices could reduce the need for human assistance. Other commenters provided additional examples of items that increase independence or substitute for human assistan ce such as adaptive utensils that allow a participant to eat meals and a voice activated system that allows a participant with quadriplegia to control various aspects of the home environment (lights, windows, door locks, etc.) and added that the exceptions to the excluded services as outlined in the proposed rule are of the utmost importance to glean the benefits of the Cash & Counseling model. Another commenter request ed that CMS clarify the actual scope of services under this exception that could be provided. Response : We appreciate the commenters’ requests for clarification and suggestions regarding what items may be allowable under permissible services and supports. We do not believe it is appropriate for CMS to define a finite list of items that can be provided as a service or support. As we noted above, the statute set forth that “expenditures relating to a need identified in an individual’s pers on-centered plan of services that increase independence or substitu te for human assistance, to the extent that expenditures would other-wise be made for the human assistance” are allowable aspermissible services and supports. States have the choice to provide any of the permissible services and supports th at meet the requirements at §441.520(b).
Comment : Another commenter noted that th e prohibition on home modifications seems extreme as access to keyless entries and accessible bathrooms are important to increase both access to affordable and acces sible housing and quality of life. The commenter added that “Assistive Technology services” seems too narrowly defined to address important supports suchas bathroom modifications. Response : The term “assistive t echnology services” is taken directly from statute as an excluded service. S ection 1915(k)(1)(C) of the Act in dicates that excluded services are subject to subparagraph (D) which indi cates that States may cover “expenditures relating to a need identified in an individua l’s person-centered plan of services that increase independence or substitute for hum an assistance....” Therefore, we believe some services that would otherwise be ex cluded may be covered when related to an identified need for items that increase indepe ndence or substitute for human assistance.
Comment : Several commenters supported CMS’ proposal to provide for coverage of assistive devices in certain ci rcumstances while at the same time promoting appropriate allocation of resources withinthe service plan an d the program. The commenters noted that under the self-directe d service delivery model proposed for CFC, the State must approve a service budget or cap that meets specified requirements, including specifying a dollar am ount that an individual may use for services and supports under the program. The commenters added that St ates must also satisfy criteria for the budget methodology that it employs including a process for describing any limits the State places on CFC services and supports and the basis for the limits. The commenters believe that these provisions work in c oncert with §441.525(c) to provide a frameworkfor coverage that is compatible with im plementation of the required exclusion and recommended that CMS point out this linkage in the preamble to the final rule. Response : We appreciate comments but do not believe that it is necessary to point specifically to the linka ge of these particular provi sions in the final regulation.
Comment : One commenter voiced concern that explicitly indicating that States may determine at what point the amount of funds to purchase such devices and adaptations places them in the statutorily excl uded categories will lead to an unreasonable limitation on this category with an over-emphasis on cost rather than need and relation to the other home and community-based attendan t services. Another commenter added that the regulation does not contain any language re lated to the proposal to allow States to determine the point at which the funding am ount would place items into the statutorily excluded categories and is con cerned that regulator y language might confuse the cost of the service with the type or purpose of the service and th at States should not have absolute discretion to target exclusions strictly based on co st. One commenter suggested that there should be some a nnual spending limits on the more costly and technologically advanced of the available a ssistive technologies such as an annual monetary limit per individual. Another commenter recommended that there be guidelines for the States to determine the cost threshold which would plac e the services and modifications into the excluded categories. The commenter asked if this was a onetime expenditure measured against the cost savings from reducing human assistance over the period of a month/year, or multiple years. The commenter noted c oncern that if the State sets a cap on the amount of funding that can be used to pur chase devices and adaptations, this could prevent people from getting those supports ev en if it increases independence and saves money over the long term.Response : As noted above, States have the choi ce to provide permissible services and supports. While we encourage States to allow for transition cost s and for items that increase an individual’s indepe ndence or substitute for human assistance, States have the flexibility to determine which, if any, permissibl e services and supports they will provide. All determinations regarding c overage of allowable items th at meet the criteria in the final regulation, including the costs associated with the items, are the State’s to make. We acknowledge that the preamble langua ge regarding the proposal to allow States to determine the point at which th e funding amount would place items into the statutorily excluded category did not carry over into the regulation. We are not incorporating this language into the final regulation, but we ar e clarifying here that States retain the ability to estab lish amount, duration and scope limitations relative to the provision of these items, as long as such lim its are not prohibited by the statute, which among other requirements, specifies that they must not be based on the individual’s age, type or nature of disability, severity of di sability, or the form of home and communitybased attendant services and s upports that the individual requi res to lead an independent life. With regard to the costs measures and timeframes for the determination of cost savings related to the substitution for human a ssistance, we do not intend to set forth the methodology for determining this threshold as this is also at the State’s discretion.
Comment : One commenter interpreted the proposal to allow for coverage of assistive technology, equipment or home modifications whenused in conjunction with other attendant services as in tegrated with the general prin ciple that coverage under CFC is available only when there is no other covera ge available under Medicaid or otherwise, and noted that at first impr ession, the proposal would seem to be inconsistent withsection 1915(k)(1)(D) of the Act. The commenter stated that if this is not the case, it would be helpful if CMS could offer an estimate as to the potential cost of these services if included in the program. Response : The correlation between the commenter’s interpretation and the request for a potential cost esti mate is not clear. We note th at there is nothing included in the final regulation that woul d make coverage under CFC av ailable only when there is no other coverage available under Medicaid or othe rwise. As noted earlier, we have also removed the requirement that these items mu st be used in conjunction with other home and community-based services.
Comment : One commenter noted that medical equipment and home modifications are an essentia l component of any person-centered plan and that these items may assist a person in the transition fr om institutionalized care to community care. The commenter questioned why they were listed as excluded services in the first place and recommended that they be added to th e list of included se rvices at §441.520. Response : These items were listed as excluded services in the statute at section 1915(k)(1)(C) of the Act, subject to section 1915(k)(1)( D). We agree that these items may assist an individual in the transi tion from an institution into the community and we also believe that these items may also assist an individual choosing to remain in their own homes. As such, and consistent with section 1915(k)(1)(D) of the Act, we proposed to allow States to cover such items as permissible services and supports long as the criteria described in §441.520( b)(1) or (b)(2) are met.
Comment : Several commenters noted that while the exclusion of vocational rehabilitation services provided under the Rehabilitation Act of 1973 is well understood given its existence in other Medicaid program s, CMS and States should be reminded ofthe importance of allowing CFC participants to utilize their CFC services and supports within employment settings. Response : We agree that individuals requi ring attendant services and supports should be allowed to receive those servi ces as needed/required in any home and community-based setting in which normal life activities take the individual, including the workplace.
Comment : One commenter indicated that acces s to State vocational rehabilitation services is extremely limited for indivi duals with serious mental illness and recommended that services excluded from CF C should be limited to those services that vocational rehabilitation agencies are, in fact , paying for and not services for which they might pay, but are not providing to the specifi c individual. The commenter added that the regulation as written creates a “catch- 22” for people with seve re disabilities whom vocational rehabilitation agencies reject, and encouraged CMS to am end paragraph (b) to clarify that the intent is to prevent Medicaid paying for serv ices already covered and paid for under vocational rehabilitation. Response : The statute specifically excludes vocational rehabilitation services (direct services to individuals with disabi lities which teach specific skills required by an individual to perform tasks a ssociated with performing a job to help them to become qualified for employment) from being provided under CFC. Therefore, we disagree with the suggestion to amend paragraph (b) as thes e services are not related to the services provided under CFC and should not impact vo cational rehabilitati on services being provided to an individual.
Comment : A few commenters noted that the proposed rule indicates at §441.525 (c) that assistive t echnology devices and assistive tec hnology services are excluded, otherthan those defined in §441.520(a)(5), but poi nted out that the pr oposed regulation does not include a §441.520(a)(5). Response : We have revised the regula tion to reference §441.520(a)(3). Upon consideration of public comments received, we are finalizing §441.525 with revision, modifying paragraph (c) to correct a reference to paragraph (a)(3) and to remove the requirement that assistive devices a nd assistive technology se rvices meeting the requirements of §441.520(b)(2) have to be prov ided in conjunction with other home and community-based attendant services, and m odifying paragraphs (d ) and (e) to allow medical supplies, medical equipment and home modifications when coverage is based on an identified need in the service plan. H. Setting (§441.530) We proposed that States must make availa ble attendant services and supports in a home and community setting and specified that such settings did not include the following:

• A nursing facility;

• An institution for mental diseases;

• An intermediate care facility for the mentally retarded;

• Any settings located in a build ing that is also a public ly or privately operated facility that provides inpatient institutional treatment or custodial care; or

• A building on the grounds of or immediat ely adjacent to, a public institution or disability-specific housing complex, designed expressly around an individual’s diagnosis that is geographically segregated from the larger community, as determined by the Secretary.We received multiple thoughtful comments re lated to this section of the proposed regulation. These comments provided a rich and varied array of perspectives for our consideration. Several commenters were s upportive of CMS’ efforts to add parameters regarding home and community-based settings and some were supportive of the proposed language. Several commenters were str ongly supportive of th e proposed setting exclusions specifically. Multiple commenters expressed their concerns related to the proposed regulation and offered suggestions for revision of the criteria. These comments are reflected as follows:

● One commenter indicated the need fo r a more specific definition of setting adding that facilitating resident s’ engagement with and participation in the community is an essential component of services provide d in a home and community-based setting.

● One commenter noted that the ambi guity surrounding the definition of home and community-based desperately needed to be remedied.

● One commenter noted that CMS proposed to adopt the stat utory definition at section 1915(k)(1)(A)(ii) of the Act and recommended that CMS rely on this definition for purposes of CFC.

● One commenter recommended that CMS c ontinue exploring how to clarify that certain settings are “outside of what woul d be considered home and community-based because they are not integrated into the community.” The commenter suggested that CMS consider that such clarification coul d be process-based and service-based and explore which processes and services characterize integration. The commenter recommended that CMS ensure that any clarif ication of the definition does not eliminate important community-based options for Medicaid beneficiaries, incl uding assist ed living communities, group homes, and settings that happen to be located near institutionalsettings. The commenter also suggested th at when a clarifica tion is developed, CMS should initially limit the use to one HCBS progr am until it is determined that there are no unintended or unanticipated pr oblems caused by the clarif ication. Another commenter requested we clarify if CFC services may be provided in other residential communitybased settings such as Assisted Living F acilities. The commenter believes the criteria should ensure participant independence and choi ce in residential settings that meet the unique needs and preferen ces of each individual.

● Several commenters reque sted that CMS convene meetings of stakeholders to address the definition of ho me and community-based.

● Other commenters encouraged CMS to ensure that the regulation recognizes that some populations need and choose to reside in settings that ar e similar to assisted living, so that they can maximize their indepe ndent living while still being able to access support services to keep them healthy and sa fe, and that some people with disabilities with very particular functional limitations ne ed to receive support services in more structured environments.

● Another commenter added that any criteriafor setting should allow individuals to access services that aim to integrate individuals into community life and that organizations that are accredi ted by a national accreditation group that meet standards for person-centered planning and community in tegration as established by the accrediting body for programs serving people with disabi lities should be eligible providers.

● One commenter indicated that “commun ity” is defined as a unified body of individuals; people with comm on interests living in a partic ular area; a fellowship; a social state or condition, and pointed out th at a community is more than a place or a location, and is defined not just by wher e people live but how they interact. Thecommenter added that in many States the word “inclusion” means that adults with special needs live in isolated setti ngs like group homes, separated by a radius of 1000 feet where there is little or no contact with neighbors but is neverthe less considered being in the community and thus “included.” The comm enter stated that i ndividuals and their families are the primary decision makers regard ing where and with whom to live and that they should be able to choose where they want to be rather than where they are forced to be included. The commenter pointed out that the stated values of CMS include “promoting initiative and choice in daily living,” yet HCBS waiv er funding would be denied to those who would benefit from the choice of residential options, and recommended that Medicaid waiver funding should be person-centered, choice based, consumer driven and the money should fo llow the person, not “idealist ideology.” Finally, the commenter stated that “inclu sion” must not exclude individuals with developmental disabilities from the rights a fforded to all other citizens, including the right to live next to peer s in a setting of choice.

● Another commenter indicated that as proposed, these exclusions, which they believe to be based on artificial considerations , might actually lead to greater isolation of individuals. The commenter i ndicated that despite the locat ions where some individuals reside, the sense of community there is much greater than the indivi dual might have if they were living by themselves in an apar tment with limited social opportunities, access to assistance and amenities, and vulnerable to exploitation. The commenter added that as written, this apartment would be considered “integrated” while a planned residential retirement community where individuals and th eir friends live alongs ide one another with access to services would not be considered a community setting.● One commenter recommended a more robust set of standards to evaluate the “quasi-institutional” setting to determine whether they are to be excluded and suggested that these standards include whether the se tting is segregated from the community at large, whether the residents are limited in te rms of meal times, meal sources, and visitors, whether the setting limits the choice of caregiv ers, whether the setting controls or limits the resident’s abode in terms of normal acti ons as furniture, food storage, paint colors, and use of TVs etc., and whethe r the facility has any contractual or other obligation to provide personal care to residents.

● One commenter indicated that there is a limited supply of affordable, handicap accessible housing that is available for low income individuals and that establishing a strict definition of settings could ha ve a negative impact on access to CFC
.

● Several commenters voiced concern regarding whether services will still be authorized in settings if these proposed crit eria are adopted broadl y across Medicaid. One commenter indicated that their organizati on serves frail elderly individuals, most of whom are Medicaid beneficiaries, on a cam pus that includes 6 buildings (1 with 20 nursing care beds, 1 with 16 memory care be ds, 3 assisted living buildings, and one building of independent living with 12 apar tments). The commenter added that the nursing care beds are the only nursing beds in the entire county and they were moved to this location when the rural cr itical access hospital closed down due to funding issues. The commenter voiced concern as they have been involved with the waiver program since its inception and as written, these excl usions would have a negative impact on the lives of many elderly individuals currently being served.

● One commenter requested that CMS re gulations and State Plan Amendments assure that a State’s decision to access CF C does not adversely impact assisted livingsettings for American Indians and Alaska Na tives (AI/AN) in dividuals who reside in/near Indian communities where living settings may differ according to the cultural norms of those communities. The commenter indicated th at certain assisted living settings, even though they may be large congregate settings , should be considered appropriate home

and community

‐ based settings under certain conditions. The commenter recommended

that the regulation affirmatively state that those culturally appropriate settings in/near Indian communities, including assisted living settings for persons of retirement age, without regard to disability, where the individua l is to be served is an Indian or resides in/near an Indian community where group liv ing arrangements are culturally acceptable,

are not excluded from home and community

‐ based settings.

● One commenter suggested that CMS ha d not gone far enough to assure that settings are truly community-based, stating th at the language only lists three types of institutions, and proposed language, similar to that used in the Money Follows the Person (MFP) program, that provides an exclusion that they felt would capture an institutional setting regardless of its licensure categor y. Other commenters suggested using the definition of “community housing” developed for the MFP program to clarify whetherand what type of Assisted Living Facility wi ll or will not be allo wed as a setting under CFC. Several other commenters suggested using the 2011 MFP application definition of “qualified residence” and one commenter adde d that this would pr event HCBS dollars from being used to house people on congr egate campuses. Another commenter suggested further clarifying th e community nature of the se tting where services may be provided to ensure that States are not using this option to further entrench institutional placements in the State and suggested defini ng “community setting” in the definition section using guidelines similar to those us ed in MFP: a home owned or leased by the recipient or that individual's family; a resi dence in a community-based residential setting in which no more than four unrelated individu als reside; or assisted living facilities or settings that offer a lease, as long as those residences in clude living, sleeping, bathing and cooking areas, offer residents lockable access and egress and cannot require that services be provided as a condition of tenancy or from a specific company. One commenter indicated that “inpatient inst itutional treatment” , “custodia l care” and “provides” were not defined in the proposed regulations and a dded that it is importa nt that CMS clarify the meaning of these terms, as how they ar e defined could have a significant impact on the settings where individuals may receive CF C services. The commenter also pointed out the definition of custodial care in the Medicare Benef it Policy Manual and added that some of the services offered under CFC are these same services. Another commenter asked if individuals who live in any building that provides custodial care by the Federal definition would be precluded from receiving services under CFC.

● One commenter asked what was meant by using the phrase “publicly or privately operated facility that provides cu stodial care” while several commenters voiced concern that the reference in subparagraph (d ) to “custodial care”, depending on how it isdefined, could preclude individuals who live inany building that provides assistance with activities of daily living from receiving CF C. Another comment er indicated that depending how terms in both paragraphs (d) and (e) are defined and interpreted, the current proposed language could prevent the pr ovision of CFC services in any residential setting where personal care is provided other than an individual’s own private home. One commenter added that States have innova tive housing with services models of care that promote consumer choice for home and co mmunity-based services and that at times, HUD funded section 202 and 811 housing are lo cated on the same campus as a nursing home. The commenter stated that many times these programs provide “custodial care” to help older individuals and pers ons with disabilities age in place. The commenter also stated that as part of their rebalancing effo rts, some States are encouraging nursing homes to decertify beds and establish independent li ving for older individuals and persons with disabilities and because this independent living is located in a nursing home, the consumers would not be eligible for CFC, even though their residences are currently considered independent living. The commenter indicated that the definition of setting in the proposed rule for CFC could be a barrier in many States where ol der frail individuals with chronic diseases and persons with disabil ities choose to live inthe least restrictive setting in their community that offer the servic es that they need to remain independent.

● Another commenter added that if effort s are made to dismantle settings that would now be excluded, that people with disabilities incongregate housing complexes “in the community” be provided with ample pha sing-in time or consid er grandfatheringin settings for people who do not wish to m ove to continue receiving their services as people should not have to choose between housing and supports.● One commenter indicated that indivi duals receiving self-directed services generally must live in a setting that is not provider owned and operated and asked if such settings are excluded under the CF C program as it is not clear.

● One commenter indicated that denyi ng access to CFC funds for an individual who resides “in a building on the grounds of, or immediately adjacent to, a public institution or disability-s pecific housing complex” does not reflect the purpose of section 1915(k) of the Act, which is to impr ove access to personal attendant services, and other services required under §441.520 for individuals in the community. The commenter added that there was no statement in the Olmstead ruling that required that the setting for care delivery cannot be loca ted in a building on the grounds of, or immediately adjacent to, a public institution or disability-specific housing complex. One commenter suggested that terms in paragr aph (e) like “disabil ity specific housing complex” be clarified while another sugge sted that it be removed altogether as individuals living in these set tings are currently eligible to receive home and communitybased services and supports. One commenter requested that community-based settings not be excluded based on proximity to congr egate care or the fact that they only serve individuals with disabilities as community integration is a large part of their programs.

● Several commenters voiced concer n about the defini tion excluding those settings that are geographically segregated from the community and urged that size alone not become part of the definition. The comm enter indicated that small campus settings can provide rich staffing and supervision and a continuum of care model needed for individuals with traumatic brai n injuries etc. Another comme nter expressed concern that the proposed definition of home and commun ity-based setting might exclude important options for services that assist people with disabilities, especially cognitive disabilitiesrelated to severe brain injuries, to live in a nd be part of the community. Specifically, the commenter is concerned that services could be denied to individuals currently receiving Medicaid benefits from post-acute brain injury rehabilitation service programs that are enrolled in Medicaid and other State programs serving people with brain injury. Another commenter with a family member in a facility for individuals with traumatic brain injury stated that this setting was much better for her daughter than a nur sing home and that she is part of community there.

● Other commenters indicated that so me companies have various settings ranging from a campus to group homes and ap artments and individuals as well as families and guardians choose these settings. Another commenter suggested that rather than including geographical segregation whensetting a standard, CMS should impose a standard for community integration that is applied to service plans, including access and involvement in the community and the level of social interaction in the residence of the individual.

● One commenter voiced concern about the tension between the need for affordable, accessible housing for people w ith developmental di sabilities (including HUD’s section 811 and 202 housing programs) a nd the need for that housing to be provided in integrated settings rather than clustered or segregated housing that primarily or exclusively serves people with disabilities . Other commenters shared concerns that housing used by the elderly and individuals wi th disabilities as allowed by the Senior Housing Exemption to the Fair Housing Act and under HUD’s subsidized apartments (811 and 202 housing programs) would be rest ricted by the phrase “d isability specific housing segregated from the la rger community” and recommende d that these settings be allowed. Another commenter questioned what t ype of setting this language intended toaddress and voiced concern that indivi duals in these 811 and 202 housing programs might be affected or lose services. Seve ral commenters expressed concern that the proposed definitions would exclude the delive ry of attendant services in many settings that are the most appropriate se tting to an individual’s needs, especially those residing in HUD funded section 811 and 202 housing desi gnated specifically for targeted populations with disabilities.

● Another commenter added that to exclude certain settings goes beyond the Congressional intent of the CFC option as the Congress only excluded CFC in particular settings and urged CMS to remove the refere nce to disability-sp ecific housing in this section.

● One commenter indicated that some individuals need and choose to receive services in ICFs/MR and the provision of a range of se rvice options is supported by Federal law including Medicaid and the U.S. Supreme Court (Olmstead ).

● One commenter requested that in addi tion to excluding settings that are colocated with current instituti ons that CMS also exclude sett ings created on the grounds of former institutions as it should be clear that the reorganization and re classification of an institution would not meet the criter ia of a community-based setting.

● Another commenter added that CMS s hould clarify instances where paragraph (e) would not apply. One commenter referr ed to this proposed rule as providing clarifications of setting at §441.530 with th e purpose of disall owing HCBS Waiver funding for living arrangements in “alternativ e or subsidiary resi dential settings on the ground of or located adjacent to such instit utional facilities” and recommended language revisions. The commenter appreciates explic it clarification that would prevent thepractice of reconfiguring in stitutions to access funds not intended for institutional settings.

● One commenter indicated that community-based care settings like adult foster care, assisted living and residential care s hould qualify as a permitted setting under CFC.

● One commenter indicated that the preamble of the Home and CommunityBased Services Waivers proposed rule published in the April 15, 2011 Federal Register (76 FR 21311), listed 8 conditions for an assisted living home to be included as a community setting. The commenter stated that, with the exception of aging in place, the conditions are common to, and actually regula ted for the licensing of assisted living homes in their State. The commenter stated th at the view that assist ed living is not part of the larger community is due to lack of experience with it and recommended that the emphasis be on the character of a building insi de the walls rather than the location or foundation within the larger community or sharing grounds or walls with a nursing facility.

● Many commenters expressed concern th at the definitions of setting would exclude assisted living facilities and other sp ecific settings that they felt should be settings in which individuals could receive CFC services. Many commenters noted that individuals often choose to resi de in these settings and c ontinue to be part of the community rather than movi ng into a nursing facility.

● Several commenters indicated that any definition of home and communitybased service settings applie d across the Medicaid program s hould include assisted living facilities as well as group homes, disabi lity-specific and non-institutional settings providing services to individua ls and encouraged CMS to recognize the need for somepopulations to reside in sett ings that are similar to assisted living to maximize independence while at the same accessing support se rvices to keep them healthy and safe.

● Several commenters recommended th e following criteria be added to the section for a setting to be considered community-based: ++ The Unit/room must be a specific place that can be owned or rented and include the same protections from evicti on under the State’s landlord/tenant law; ++ The individual must have privacy in the unit (lockable entrance doors, freedom to furnish and share the unit onl y by choice, the inclusion of individual bathroom), unless partners/spouses share a room); ++ There is freedom/support to contro l one’s own schedules and activities including access to food at any time; and ++ The individual may have visitors of their choosing at any time.

● One commenter proposed adding the follo wing language to th e list of excluded characteristics: ++ Any residence that requires that serv ices must be provided as a condition of tenancy; ++ Any setting that requires notific ation of absence from the facility; ++ Any setting that does not have lockab le access and egress controlled by the individual; and ++ Any residence where the lease reserves the right to assign apartments or change apartment assignments.

● One commenter indicated that the ne w proposed rule seems vague and seems to give the Secretary great latitude in desc ribing what kind of sett ing is "geographically segregated” from the larger community (and therefore ineligible for waiverreimbursement for brain injury services). The commenter indicated that they support the freedom of consumers’ choice and the opti on to live in a setting where community integration is maximized. The commenter does not support any definition that uses size of a home or the adjacency of homes on a small “campus” as the criteria for defining "geographic segregation.” The commenter a dded that in terms of small campus settings for individuals who are catastrophically in jured and severely limited cognitively and physically and who require a good deal of medical oversight, this kind of living arrangement may provide the necessary richne ss of staffing to facilitate, rather than inhibit community integration to the highest degree possible fo r particular individuals. The commenter stated that while home size can matter, one size does not fit all, especially where the results from brain in jury are profound for the consumer. Finally, this commenter urged the inclusion of the following specific criteria, other than simply size of the home, in the definition of settings: ++ The facility provides post-acute reside ntial care to individuals with an acquired brain injury. ++ The facility is accredited by the Commission on Accreditation of Rehabilitation Facilities ( CARF) as a community integrated brain injury rehabilitation facility. ++ There is handicap access to the co mmunity. (One example would be an accessible wheelchair path). ++ There is evidence of a robust level of community participa tion on the part of individuals living in the homes. (The commenter noted thatone significant measure of the levels of community participation can be highlighted by appl ying the Maya-Portland inventory; the internationallyrecognized, standardized as sessment in brain injurypopulations). Other evidence of such community participation may be access to jobs in the community, recreational out ings, participation in community programs and prolific voting in local and natio nal elections etc. ++ There is consideration gi ven to the functional level of the people living in that home. For some individuals with profound limitations due to br ain injury, a small campus in close proximity to a town or urban center is frequently the most effective way to provide the intensity of staffing, medica l oversight, and richne ss of rehabilitation services that will enable people living in the home to access the social capital of community life. ++ There is a continuum of care available at the facility, so that as individuals gain functionally and can nego tiate the community more safely, they can move from small campus settings in the community to even smaller group homes and independent apartments. ++ There is evidence of consumer choice inselection of the re sidential setting. ++ The home is not on the grounds of a hospital, nursing home or ICF.

● Several commenters strongly disagree with CMS’ proposed clarifications and stated that proximity of a community setti ng to an institutional setting or disabilityspecific housing complex has little, if any, bearing on the degree of community integration experienced by resi dents. The commenters adde d that geographic separation should not matter if a residenc e is well integrated with th e larger community. They believe that a better way to clarify community integration would be to look at the services available and provided by the setting and to ensure that processes, such as care planning, promote beneficiary choice. The commenters st ated that because all States license or certify assisted living providers, Medicaid beneficiaries living in these communitiesreceive services with greater government ove rsight than those receiving services in freestanding homes. The commenters also added that in recent years, as residents’ levels of disability and the proporti on of residents with Alzheimer’s and other related diseases have increased, States have responded by in creasing regulatory st andards applying to assisted living communities and that due in pa rt to the fact that Medicaid cannot pay for room and board in community-based settings, th e extent of Medicaid coverage in assisted living already is much more limited than Me dicaid coverage for nursing homes and other long term care options. The commenters urge d CMS to reconsider its clarification of “home and community-based” and recommended that CMS utilize the definition in law and explore a clarification that relies on se rvices available and provided by the setting, and ensure that processes, such as care plan ning, promote choice.

● One commenter suggested that consider ation be given to including the list of factors characterizing settings included in the recently pr oposed rule revising section 1915(c) HCBS waiver provisions published in the April 15, 2011 Federal Register . The commenter shared language from §441.301(b)(1)(iv ) that states that attendant services may be provided “only in settings that ar e home and community-based, integrated in the community, provide meaningful access to the community and community activities, and choice about providers, individuals with whom to interact, and daily life activities.” Response : We appreciate these thoughtful comments. Several commenters referenced waivers in their comments and we would like to clarify that this regulation pertains to the CFC State plan opt ion, not the HCBS waiver program. In consideration of the comments recei ved, we are not finalizing the setting provisions of proposed §441.530 at this time. The comments received indicated to us that the proposed provisions caused more confusi on and disagreement than clarity and webelieve further discussion and considerati on on this issue is ne cessary. In addition, similar language proposed in the notice of proposed rulemaking for revisions to the 1915(c) waiver program garnered significant pu blic comment. Therefore, we intend to issue a new proposed regulation that will pr ovide setting criteria for CFC that we developed in light of the comments received and to invite additional public comment on our proposal. We plan to propose home and co mmunity-based settings shall have all of the following qualities, and such other qual ities as the Secretary determines to be appropriate, based on the needs of the individu al as indicated in their person-centered service plan:

● The setting is integrated in, and faci litates the individual’s full access to, the greater community, including opportunities to seek employment and work in competitive integrated settings, engage in commun ity life, control personal resources, and receive services in the community, inthe same manner as indivi duals without disabilities;

● The setting is selected by the indivi dual from among all available alternatives and is identified in the person-centered service plan;

● An individual’s essentia l personal rights of privacy, dignity and respect, and freedom from coercion and restraint are protected;

● Individual initiative, autonomy, and independence in making life choices, including but not limited to, daily activities, physical environment, and with whom to interact are optimized and not regimented;

● Individual choice regarding services and s upports, and who provides them, is facilitated.;

● In a provider-owned or c ontrolled residential setting, the following additional conditions must be met. Any modification of the conditions, for example, to address thesafety needs of an individual with dementia , must be supported by a specific assessed need and documented in the person-centered service plan: ++ The unit or room is a specific physica l place that can be owned, rented or occupied under another legally enforceab le agreement by the individual receiving services, and the individual has, at a minimu m, the same responsibilities and protections from eviction that tenants have under the landlord tenant law of the State, county, city or other designated entity ; ++ Each individual has privacy in their sleepi ng or living unit: -- Units have lockable entrance doors, with appropriate staff having keys to doors; --Individuals share units only at the individual’s choice; and --Individuals have the freedom to furnis h and decorate their sleeping or living units ; ++ Individuals have the freedom and s upport to control thei r own schedules and activities, and have access to food at any time; ++ Individuals are able to have visitors of their choosing at any time; and ++ The setting is physically accessible to the individual. We also plan to propose that home and community-based settings do not include the following: 1) A nursing facility; 2) An institution for mental diseases; 3) An intermediate care facility for the mentally retarded; 4) A hospital providing long-term care services; or 5) Any other locations that have qualities of an institutional se tting, as determinedby the Secretary. The Secretary will apply a re buttable presumption that a setting is not a home and community-based setting, and engage in heightened scrutiny, for any setting that is located in a building that is also a publicly or pr ivately operated facility that provides inpatient institutiona l treatment in a building on th e grounds of, or immediately adjacent to, a public institution or disability -specific housing complex. CMS will engage States in discussion and review any pert inent information submitted during the SPA review process to determine if these faciliti es meet the HCBS qualities set forth in the proposed rule. While we are proposing the aforementi oned setting requirements in a new proposed rule, the CFC option is in full eff ect. CMS will rely on the proposed setting provision as we review new 1915(k) State plan options and we will fully expect States to comply with the setting requirements and de sign and implement the benefit accordingly. To the extent there are changes when this language is finalized, we are committed to permitting States with an approved section 1915(k) State plan amendment a reasonable transition period, at a minimum of one year, to make any needed program changes to come into compliance with the final set ting requirements. We are committed to minimizing disruption to State systems that have been established based upon compliance with these proposed regulations. It is our intent to and to apply this criteria to sect ions 1915(c) and 1915(i) of the Act authorities. As expressed earlier, we believe further discussion is necessary and we believe this can be accomplished by soliciting pub lic comments on the modified criteria. Therefore, we are not finalizing the setting provision at this time. I. Assessment of Need (§441.535)We proposed that States must c onduct a face-to-face assessment of the individual’s needs, strengths and preferences that supports the determination that an individual requires attendant services and supports available under CFC, as well as the development of a person-centered service plan and, if applicable, a service budget. We also proposed that this assessment must be c onducted at least every 12 months, as needed when the individual’s support needs or circumstances chan ge significantly, necessitating revisions to the service plan, or at the re quest of the individual, or the individual’s representative, as applicable.
Comment : One commenter indicated support fo r this section and appreciated the emphasis on understanding and honoring an indi vidual’s personal goals and preferences for the provision of services. Response : We believe that an individual’s pr eferences and goals for the provision of services is an important aspect of both an assessment and the person-centered service plan.
Comment : Several commenters indicated th at it is unclear whether the term “may” in §441.535(a) makes the entire subpart optional and suggested that CMS clarify that States must gather information on a ll the items listed in the proposed rule at paragraphs (a)(1) through (8). The commenters also indicated that it is unclear what role the consumer has in selecting (or prohib iting) the use of specific processes and techniques used to obtain information about anindividual, and pointed out that the list of items included in paragraph (a) does not clearly correspond to “processes and techniques.” The commenters suggested that CMS change “processes and techniques” to “criteria” and recommended that certain cr iteria be mandatory to assure that the assessment is based on a comprehensive info rmation set. The commenters recommendedthat the other criteria should be optional, but in all cases should not exceed the scope of the conversation with the indi vidual, adding that collateral contacts should not be allowed unless requested by the individual. Finally, the commenters recommended that “health condition” at §441.535(a)(1) be expanded to read “health condition and treatments”, and that “household” at §441.535(a)(7) be edited to read, “household and physical living arrangements, including the safety of those arrangements” as “household” may be relevant to understanding the individual’s f unctional limitation, but should not be a basis for lowering a needs determination based on av ailability of other people. One commenter requested that CMS amend §441.535(a)(1) to read “health and mental health condition.” Response : With regard to the “processes a nd techniques” to gather information for the assessment, the intent of this langua ge was to indicate that States have the flexibility to utilize multiple methods to gather this information. Therefore, we do not agree with the commenters’ suggestion to m odify this language. With regard to the individual’s role in the proce sses or techniques the State chooses to util ize, an individual should have the opportunity to discuss any ga thered or related information during the assessment, and the individual must approve the person-centered service plan which is based on the assessment of need. In the absence of other statutory requ irements, we proposed language in the assessment section for CFC that was consiste nt with the section 1915(j) Self-Directed Personal Attendant Services final rule, in an e ffort to streamline State requirements where possible across the programs. In addition, we indicated in the preamble that we are currently working to determine universal core elements to include in an assessment for consistency across programs. This initiative is directly related to the work being doneregarding the Balancing Incentives Paym ent Program (Balancing Incentive Program) created under section 10202 of th e Affordable Care Act. Based on multiple comments and the acknowledgement that additional policy work is necessary to maximize the extent to which consistency can exist across the Medicaid programs as it relates to assessmen ts for HCBS programs, we are revising the language, as some commenters suggested, to reflect the broad assessment requirements in statute. As such, we are reflecting this assessment throughout the final rule as the “assessment of functional need.” We are also taking more time to consider all of the thoughtful comments from this rule and the forthcoming comments from the proposed rule that will be published to implement ch anges to the section 1915( i) HCBS State Plan option required by the Affordable Care Act, and to have additiona l policy discussions both internally and with stakeholders. Our inte nt is to share any fi nalized universal core elements that are developed under the Balanci ng Incentive Program with States to use as examples of elements to be incorporated into the assessment of functional need for CFC and other HCBS assessments as determined by CMS. As such we are revising the language to add that the assessment must incl ude other requirements as determined by the Secretary. Finally, we are clarifying the scope of the assessment to indicate that it is the individual’s need for the services and supports provided under CFC that must be assessed. This is in no way meant to limit a State from implementing a comprehensive assessment that would determine an individual ’s need for a broader scope of services. We are simply clarifying in this rule th at the assessment described at §441.535 is only required to assess the need for CFC services and supports.
Comment : One commenter stated that the pr oposed regulation does not recognize that there may be other services and programs that can meet the needs of those applyingfor CFC and indicated that a comprehensiv e assessment should include a determination as to whether the individual is appropriate for this and ot her State plan and/or home and community-based services so that the consum er can be offered a choice of programs and not be limited to one model of care. The co mmenter added that such an assessment tool is recognized as a vital component of other Federal programs including the State Balancing Incentive Program and is used by some States. Response : We agree with the commenter that it would be ideal for a State to have one comprehensive streamlined assessment for an individual that would serve to inform a person-centered service plan, and that the en tity that coordinates and/or conducts these functions be able to presen t an array of possible servic es and supports to meet the individual’s needs to provide a choice among these services to the individual. States have the flexibility to offer this kind of assessment and service plan and as the commenter pointed out, some States have implemented their programs in this manner.
Comment : One commenter appreciated that CMS decided not to prescribe a specific assessment tool to determine an individual's functional needs. Another commenter pointed out that the preamble cl early states that CMS will not dictate the assessment tool and asked that CMS clarify inthe rule that States may design and/or select the assessment tool to determine func tional eligibility, as well as identify needed services as long as such tools contain the required CMS elements. Another commenter asked CMS to clarify expectations about the face-to-face assessment process and instrument proposed for use in CFC, the mo re universal level of care assessment and service planning process, and instruments used in a State’s section HCBS 1915(c) waiver programs. The commenter asked if there is flexibility for a State to use the same fundamental processes and instruments but wi th different threshol d levels for programparticipation or if a State may choose di fferent processes and instruments. The commenter also asked if States may set anassessment standard to operationalize the determination that an individual requires CF C. One commenter asked if States were expected to develop new assessment tools or if they can use existing assessment tools that establish level of care and service planning if the current tools conform to the requirements in the CFC regulation. The commenter added that States should be permitted to use assessment processes and person-centered service planning to allow individualized determinations of the most integrated setting appropriate to the individual’s needs and preferences, as we ll as eligibility for this option. Other commenters asked if States will have flexibility in selecti ng an assessment instrument and if the instrument could focus on specific types of disabilities ( physical, intellectual, developmental, etc.). Response : We have not specified the instrument s or techniques that should be used to secure the information necessary to determine an individual’s functional need for the attendant services and s upports offered under CFC or to develop the service plan and/or service budget. States continue to have the flex ibility to develop their own assessment tools or to utilize existing tools to the extent po ssible to meet the requirements under CFC. While this regulation does not spec ifically address the assessment process or tool States utilize in their section 1915(c) programs for assessments or level of care determinations, States have the flexibility to use any existing assessment tools if the CFC requirements are met. As States are not permitted to target attendant services and supports provided under CFC to any particul ar population or disability, we do not anticipate States will tailor an assessment of need to focus on any such population or disability.Comment : One commenter indicated that the mo st important aspect of legislative intent that is not captured in the proposed rule is a clear statement of a State obligation to provide services and supports to meet the individuals’ assessed needs. The commenter suggested that language be adde d to paragraph (a) to say “so as to meet the individual’s assessed needs” and recommended that this language be included elsewhere in the regulation as needed to ensure that a St ate has to meet the assessed needs of the individuals to receive funding. Response : An individual’s pers on-centered service plan must be based on that individual’s assessment of functional need. We expect that as needs for the required attendant services and supports available under CFC are identified and incorporated into the person-centered service plan, these services would be made available to the individual to meet those needs. Therefore, we disagr ee with the suggestion to add this proposed language as we believe this expe ctation is clear. In fact, we do reiterate the ability of a State to establish limits on the amount, dura tion and scope of CFC services, as long as those limits are not based on the individual’s age, type or nature of di sability, severity of disability, or the form of ho me and community-based attendantservices and supports that the individual requires to lead an indepe ndent life, as prohibited in the statute.
Comment : One commenter voiced concern th at States might “poorly integrate” the CFC assessment into their current asse ssment processes for HCBS and suggested, along with another commenter, that States be re quired to have a publicly available written plan explaining how the CFC assessment will work, interact with existing assessments for HCBS, and ensure that the re gulatory requirements are met. Response : States have the flexibility to desi gn a new assessment tool, or utilize current assessment tools as long as the require ments in the CFC regulation are met. Wedo not agree with the commenter’s recommenda tion to require States to have a written plan regarding their assessment, as we do not require a CFC-specific assessment. States electing CFC must submit a State plan am endment that shows how they propose to implement CFC and how the program requirement s will be met. Once approved, this will become part of a State’s Medicaid plan, which is a public document.
Comment : One commenter recommended that CMS consider adding the concept of an independent assessment found in section 1915(i) of th e Act and suggested that CMS add an independent assessment descriptor to §441.535. The commenter indicated that in paragraph (b), an independent assessment w ould also address concern about recipients needing the service, as an objective assessmen t would establish medical necessity for the services. Response : We agree that consideration should be given to the proposed requirements of the assessment for the section 1915(i) State plan opt ion. As noted above, in addition to the comments received for this proposed rule, we will be considering the forthcoming section 1915(i) proposed rule pub lic comments related to assessments as we move forward with the development of th e universal core assessment elements and methods to streamline requirement s across the Medicaid program.
Comment : One commenter pointed out that CMS states in the preamble that “the assessment should include a determination of whether there are any persons available to support the individual, including family members. These persons may be able to provide unpaid personal assistance ....” and added th at inclusion of such language in the preamble implies that CFC includes a waiverof comparability as found at section 1915(j)(3) of the Act. The commenter indi cated that they have not identified a corresponding provision in sec tion 2401 of the Affordable Care Act or in the proposedsection 1915(k) rule and reque sted that CMS clarify whether such a waiver of comparability is intended and add language authorizing such a waiver. Response : We can confirm that no waiver of comparability was included in the authorizing legislation, or in the implementi ng regulation for CFC. However, we do not believe that comparability of services is violated based on an individualized determination of the impact of available unpaid personal a ssistance on the CFC services and supports required.
Comment : One commenter indicated th at the preamble mentions the identification of natural supports but the proposed rule relate d to assessment does not. The commenter recommended that if CMS menti ons natural supports inthe rule that we specify that the assessment and service plan take into account, but do not compel, natural supports, as case managers or other entities conducting the assessment and/or planning process should not automatically make judgments about what families ought to provide and reduce needed services accordingly. Response : We mention the identif ication of natural suppo rts in the assessment preamble section as understanding an individual ’s natural supports is an important aspect in determining an individual’s needs. It is a requirement in the person-centered service plan that these supports be reflected in the pe rson-centered service plan. We expect that identification of these natura l, unpaid supports be taken in to consideration with the purpose of understanding the level of support an individual has, and should not be used to reduce the level of services provided to an individual unl ess these unpaid supports are provided voluntarily to the individual. We have incorporated this philosophy into the “Person-Centered Service Plan” section, as discussed below.Comment : A few commenters indicated thatthey did not u nderstand the purpose of paragraph (b) which states that “asse ssment information supports the determination that an individual requires CFC...” and sugge sted clarification or deletion. One commenter requested that in paragraph (b) CM S substitute the word “requires” with the words “would benefit from” CFC services. Response : Information gathered in the assessment should support the determination that an individua l requires the services and s upports available under CFC. If an individual does not meet the State’s me dical necessity criteria for the receipt of attendant services and supports, the individual would not participate in the option. Therefore, we do not agree with the suggested language change.
Comment : One commenter voiced concern that the proposed rule does not address the gap between the ac tual support needs of individu als and the needs typically assessed in current assessment tools which ar e generally limited to ADLs and IADLs. Response : While we appreciate the commenter ’s concern, CFC is a benefit to provide attendant services a nd supports to individuals to assist in accomplishing ADLs and IADLs. While States are not limited to assessing an individual’s needs based solely on ADLs and IADLs, CFC as a benefit is ce ntered around these se rvices and supports.
Comment : Several commenters referenced and supported the requirement at §441.535(c) that the assessment must be conducte d at least every 12 months, as needed when the individual’s support needs or circumstances chan ge significantly, necessitating revisions to the service pla n, or at the request of the individual. One commenter appreciated these caveats and noted that w ithout them, 12 months could be too long a period considering how quickly individual’s needs may ch ange. A few commenters indicated that §441.535(c) uses the word “o r” to link the clauses whereas §441.540(e)uses the word “and” and suggested that CMS be consistent and use “and’ in both sections. One of the commenters added that the policy should guarantee that a service plan would always be reviewed at the request of the indivi dual and suggest ed that this meaning is best implemented by using the word “and.” Some commenters added that assessments often need to be conducted more often than every 12 months for some populations due to frequent changes in need s due to behavior, improved cognitive skills, and other emerging health issues. Several co mmenters suggested that CMS clarify either in the regulation or in future guidance that an individual’s circumstances or needs change significantly when a participant’s support network changes, including friends and family that the participant relies on for physical or emotional support and these protections should explicitly include Lesbian, Gay, Bise xual and Transgender individuals and their families. Other commenters recommended that CMS provide specific timeframes for conducting these assessments including both a standard timeframe and an emergency timeframe to address situations where a consum er’s health or safety may be in jeopardy. One commenter asked if it was possible for the State to require more frequent assessments but not exceed an annual authori zation as this would assure consistency across other home and community-based serv ices and the potential for moving between service modalities. Response : We believe that an assessment of functional need should be conducted at least every 12 months, at a minimum, to ensure that an individual’s needs are commensurate to the services authorized in the service plan, as we understand that an individual’s needs can change significantly over time and as a result of various circumstances. Regarding the comment that mentioned changes in a participant’s support network, we expect this paragr aph and all parts of this rule to apply to all individualsequally regardless of disability, age, sexual or ientation, or any other factor. We include several provisions related to the reassessments that we believe capture various circumstances necessitating a reassessment a nd updates to the service plan. Therefore, we do not agree that we need to change the language. In addition, States have the option to choose how many reassessments they offer as long as the requirements in the final rule are met. We appreciate the commenters poi nting out the discrepanc y between the use of “and” and “or” in different sections of the regulation. We are modifying §441.535 (c) to incorporate the word “and” to ensure a ppropriate reassessments as necessary.
Comment : Several commenters voiced support for the face-to-face assessment. Other commenters added that in-person assessment meetings allow for the building of rapport to improve information sharing. Two commenters added that CMS should specify that CFC applicants should have the right, though not the requirement, to have the face-to-face assessment conducted in their ow n home as this would decrease undue burden on the individual who may have mobility issues and would have the added benefit of providing the State with increased inform ation about the indivi dual’s living situation and support system. Another co mmenter asked that CMS clar ify the statement that the assessment be conducted at the site where the services are to be provided to assure a comprehensive assessment of need. Another co mmenter suggested that it be clarified in the regulations that the a nnual reassessment should be conducted face-to-face. One commenter suggested that th e initial assessment be conduc ted face-to-face but CMS should allow subsequent assessments to be conducted via a variet y of other health technologies and tools as appropriate for an individual’s needs, accessibility and preference.Response : We agree that ideally, the asse ssment of functional need would be conducted face-to-face in order for the entity conducting the assessment to get a better overall understanding of an i ndividual’s needs. However, we recognize that many States are developing infrastructure a nd policies to supp ort the use of telemedicine and other ways to provide distance-care to individuals to increase access to services in rural areas or other locations with a s hortage of providers. To s upport these activities, we are indicating here that the “face-to-face” assessme nt can include any session(s) performed through telemedicine or other information t echnology medium if the following conditions apply: 1) The health care professional(s) performing the assessment meet the provider qualifications defined by the State, including any additional qualific ations or training requirements for the operation of re quired information technology; 2) The individual receives appropriate support during the assessment, including the use of any necessary on- site support-staff; and 3) The individual is provided the opportuni ty for an in-person assessment in lieu of one performed via telemedicine. We have modified the regulation to allo w for use of these technologies to meet this requirement. With regard to the lo cation of the assessment, we continue to encourage that these assessments be conducted inthe individual’s place of residence, as this would provide the best picture of the i ndividual’s needs, allow the State to monitor the health and welfare of the individual, and allow the State to get a sense of how well the services and supports in the service plan are meeting the individual’s needs. But we note that the CFC proposed rule did not require the assessment to be conducted at the site where the services are to provi ded. In addition, as the assess ment of functional need andthe person-centered planning process may ta ke place at the same visit, the service planning process section at §441.540 indicates th at this process take place at times and locations of convenience to the individual.
Comment : Several commenters indicated th at assessments, when overdone, can be draining and somewhat de-humanizing for participants and reque sted that CMS and States be sensitive to this as they design tools and policies for the frequency of assessments. The commenters added that recognizing that some people may not experience a change in functional status ove r time, trigger questions that allow the assessor to shorten the assessment and minimi ze intrusiveness, when possible, can be beneficial to all. One commenter disagr eed with the proposed requirement that an assessment be conducted at a minimum of ever y twelve months and indicated, along with another commenter, that States should have the discretion to both allow for exceptions where an individual’s living s ituation is stable, medical c ondition is non-degenerative, and abuse risk factors are low, and to conduc t telephone or paper reassessments in similar situations. The commenter i ndicated that less frequent asse ssments promote efficient use of governmental resources and are less burde nsome on the recipient, but did support the allowance for more frequent reassessments if necessary or at the in dividual’s request. Similarly, multiple commenters recommended that CMS identify certain circumstances in which it would not be necessary to conduct a face-to-face assessment of need every 12 months such as when an individual can docum ent that their needs are unlikely to change from year to year. Response : We agree that the assessment process should not be overdone or burdensome for individuals participating in CFC. States may want to design their assessments to accommodate the needs of i ndividuals whose needs are not likely tochange significantly from year to year. This could save both the in dividual and the State time, but the requirements in the final rule would still apply to these circumstances. Assessments must be conducted at leas t every 12 months. We appreciate the commenter’s suggestions to identify circumstan ces in which it would not be necessary to conduct reassessments face-to-face. While we believe that a face-to-face visit is ideal for the reasons previously indicated, we have re vised the regulation to allow for the use of telemedicine or other information technology medium if certain conditions apply. We strongly advise States to consider a f ace-to-face meeting to allow for the closer monitoring of health an d welfare and appropriate services and supports
. Comment : One commenter recommended additional guidance for States regarding the reauthorization pe riods for services, stating thatfrequent reauthorizations can be burdensome for individuals with l ong-term care needs and often serve as an opportunity to reduce services de spite no decrease in need. Response : We believe that the regulation is cl ear that the service plan is based on the assessment of functional need. If an indivi dual requires a particular level or amount of attendant services to meet these needs, the services should not be decreased at any time unless an individual no longer requ ires that level of support. An individual must agree to and sign any service plan, and therefore, we do not believe that we need to issue any further guidance to States regarding the reductio n of services absent a decrease in need. We do reiterate the ability of a State to implement limits on the amount, duration and scope of CFC services, as long as these limits are not based on an i ndividual’s age, type or nature of disability, severity of disabil ity, or the form of home and community-based attendant services and supports th at the individual requires to lead an independent life, as prohibited in the statute.Comment : One commenter suggested that the assessments not be limited to only 1 hour as such planning and discussion requi res more time and only allowing for 1 hour of payment for the assessment creates ba rriers to preparing aneffective plan. Response : We do not require that an assessm ent be limited to 1 hour. While the Regulatory Impact Analysis sec tion of the proposed rule include d an estimate of 1 hour to conduct an assessment, this estimate was base d on an average amount of time, and we did not limit the assessment to 1 hour in the regulation.
Comment : Multiple commenters recommended that the regulations require the assessment to be conducted in a linguistically and culturally appropr iate manner for the individual (and/or thei r appointed representative) as de termined by the individual in a fully accessible way. Response : We agree with the commenter. We expect that States will conduct assessments of functional need and the subse quent person-centered planning process in a linguistically and culturally appropriate manner for the individual and as appropriate, their representative in a fully accessible way. Such a requirement already exists for the development of the person-centered servic e plan, as identifie d at §441.540(a)(4).
Comment : Several commenters indicated that participants should be treated with dignity in the needs assessment, regardless of their sexual orientation or gender identity. Response : We expect that all individuals wi ll be treated with dignity in the assessment process and all other aspects of CFC.
Comment : Two commenters pointed out thatthe statutory language includes a requirement that the assessment be agreed to in writing in section 1915(k)(1)(A)(i) of the Act and suggested that the regulation exp licitly include this language in §441.535.Response : Section 1915(k)(1)(A)(i) of the Act indicates that the “person-centered plan of services and supports that is ba sed on an assessment of functional need” be agreed to in writing by the indi vidual or, as appropriate, the individual’s representative. We reflect this statutory requirement at §441.540(d).
Comment : One commenter asked if CMS intend s for an individual to have a right to appeal the assessment. Response : Rather than appealing the assessm ent, individuals have the right to appeal their person-centered service plan. The person-cente red service plan must be based on the assessment of functional need and agreed to in writing by the individual. If the individual does not agree with the findings of the asse ssment or the proposed service plan based on these findings, an individual doe s not have to agree to or sign the service plan. The individual would have the right to disagree with the assessment and service plan at any time during the process. St ates electing the CFC Option are required as specified in §441.585, to have procedures for app eals of denials and reconsideration of an individual service plan in place as part of their quality assurance system for the CFC. The fair hearing requirements of 42 CFR pa rt 431, Subpart E apply to CFC in the same manner as they apply to other Medicaid State plan services.
Comment : One commenter asked if the requirement that States conduct the assessments allows for the State to contract w ith a private entity and if so, urged CMS to require that States demonstrate that the pr ivate entity is complying with the law and regulations. Response : States are required to comply w ith all requirements related to CFC regardless of whether they contract with priv ate entities to fulfill any function of CFC.Contracting with an entity does not absolve th e State of making sure that all requirements are met in accordance w ith the final regulation.
Comment : One commenter requested that St ates be granted the discretion to determine the qualifications of persons who may conduct functional assessments. Another commenter recommended that the a ssessment of need standards include the qualifications of the person conducting the a ssessment. Another commenter asked who coordinates the responsib ilities of the assessment and person-centered plan. Response : States are responsible for determining the prov ider qualifications of the entities who will conduct the assessments and the person-centered planning process. With regard to who coordinates the respons ibilities of the assessment and the personcentered service plan, that is also up to the State. Many St ates choose to utilize service coordinators to fulfill this role.
Comment : One commenter suggested that the designated representative participate fully in the assessment of need a nd that any representati ve also be evaluated regarding competency to undertak e the role of representative. Response : We agree with the commenter that if an individual has a representative, that represen tative should have an active ro le in the assessment and person-centered planning process to the extent that the indivi dual chooses to include that representative. However, we are not revising the regulation to make this a requirement. With regard to evaluating the competency of an individual to undertake the role of representative, we do not believe it is nece ssary to require such a step, although States would have the ability to do so.
Comment : One commenter indicated that a ssessments and service plans should include an assessment of the consumer’s inte rest and ability to self-direct. Anothercommenter recommended that the assessment in clude an evaluation of the individual’s ability to receive care in the delivery model available under the State’s program, particularly if the program is limited to self -directed care, as it w ould be harmful to an individual or his or her representative to permit placement in a self-directed care model when the individual, or his or her representative was not able and/or willing to take on the responsibilities under the self-d irected model. While these elements are included to an extent in the support system section, they should be integrated in the assessment process. Response : States may include as part of their assessments and service plans a determination of an individual’s interest and ab ility to self-direct. If the State is only offering CFC via a self-directed model w ith service budget, and the individual or individual’s representative is notable or willing to assume re sponsibilities inherent in this model, the entity conducting the assessment or development of the service plan should identify other programs for which th e individual would be eligible.
Comment : Several commenters suggested th at CMS should be more prescriptive regarding the specific elements incorporated into assessments, as they have the capacity to inform quality assurance monitoring and measurement of quality outcomes, and suggested that CMS require Stat es to develop an assessment of need that includes these “standardized elements, key system functionali ty, and workflow that will be sufficiently comprehensive.” Response : We appreciate the commenters’ sugg estions. As indicated above, and in the preamble of the proposed rule, a set of universal core assessment elements is being developed. As these elements are developed, we will work with Stat es to determine the extent to which these elements, if not alrea dy part of a State’s assessment for CFC, could be incorporated. States have the flexibilityto design a quality a ssurance system thatintegrates current and future assessment elemen ts. We also set forth our expectation in the preamble to the proposed rule that Stat es will include a sta ndardized set of data elements, key system functionality, and workfl ow that will be sufficiently comprehensive to support the determination that an individua l would require attendan t care services and supports under CFC and the development of th e individual’s subsequent service plan and budget. For these reasons, we do not belie ve it is necessary to add an additional requirement for this purpose.
Comment : Multiple commenters provided feedback specifically regarding the statement in the preamble that CMS is currently working to determine the universal core elements to include in a standard assessmen t for consistency across programs. Several commenters supported our effort in seeking cons istency across author ities, including the attempt to create commonalities within assessment processes. Several commenters expressed various concerns regarding standa rdized assessments. Multiple commenters offered suggestions regarding what should be included in a universal assessment. Other commenters added that ensuring participants are involved in the prioritization of core elements may help to identify elements that have a clear link to the planning process, and a few commenters expressed in terest in commenting on any proposed list. The specific comments as summarized above are as follows:

● One commenter suggested that the core elements should include an assessment of an individual’s ability to perform ADL s and IADLs without a ssistance, assess the ability to self-direct his or her services, and should reflect and be consistent with the State’s functional eligibility criteria for the service.

● One commenter indicated that functi onal assessments should consider that a person’s disability can change over time.● One commenter indicated that func tional assessments should addresses the complexities of independent living and active daily living outside the home, such as what supports are needed to go to a community bathroom.

● Several commenters recommended th at universal core elements include discussion of unique needs of families, such as whether there are needs of children and partners that should be addr essed in the home. The commenters added that these assessments are important for all families becau se assessing the needs of others in the home will help identify the unique needs of the individual requiring assistance.

● Another commenter voiced concern about the development of universal assessment tools and requested that CMS r ecognize during its universal core elements development process that core elements lik ely will vary by population and recommended, along with other commenters, that rather than specific assessment elements, CMS develop universal domains that cut across programs and populati ons, and added that program and/or population specific elements could be developed. The commenter urged CMS to convene a meeting of stakeholders to discuss our vision and the viability of universal core domains with elements th at might vary by population and program.

● One commenter requested that if cha nges are necessary after implementation of CFC has begun, that CMS provide States suffi cient time to incorporate any new core elements into their assessment process.

● One commenter cautioned against requiring additional elements to be included in the assessment beyond the statutory require ments, as they believed it would increase the assessment time for social attendant care providers.

● One commenter urged CMS to proceed with caution with regard to standardized assessments for States, as resear ch on HCBS is in need of development andcodification of assessment elements at this stage may be premature. The commenter added that some States have broader eligibility standards th an others and indicated that they would want CMS to adopt a broad view of assessment at this stage to facilitate future expansion and experimentation. The co mmenter also suggested that to the extent CMS requires States to use a standardized set of data elements, we should consider additional individualized assessm ents of need that may not fit the standardized data elements.

● One commenter asked whether CMS will be including the determined universal core elements in the core sta ndardized assessment in the State Balancing Incentive Payments Program. Response : We appreciate the various point s, concerns and recommendations made by these commenters. We will take these perspectives and recommendations into consideration during the development of universal core a ssessment elements as part of the Balancing Incentives Payment Progr am created under section 10202 of the Affordable Care Act, as well as future H CBS guidance. As noted above, we intend to share any finalized universal core elements that are developed with States as examples of elements that can be incorporated into th e assessment of functi onal need for CFC and other HCBS assessments as determined by CMS. Future guidance will provide additional detail regarding the finalized set of universal core assessment elements. After consideration of th e public comments receive d, we are finalizing §441.535 with revision, to refer to an “assessment for functional need”, to indi cate that the scope of the assessment is limited to CFC services a nd supports, to change “or” to “and” in paragraph (c), to add the ab ility for States to meet th e face-to-face requirement through the use of telemedicine or other informati on technology medium if certain conditions aremet, and to add a new paragraph (d) to indi cate “Other requirements as determined by the Secretary.” J. Person-Centered Service Plan (§441.540) We proposed to require a minimum set of criteria for a person-centered planning process, and proposed that the resulting pers on-centered service plan must reflect the services that are important for the individual to meet i ndividual services and support needs as assessed through a person-centered functional assessment, as well as what is important to the person with re gard to preferences for the delivery of such supports. We also proposed to require a minimum set of cr iteria for the person-centered service plan. Finally, we proposed additional requirements of the plan, including the timeframes for its review and revision.
Comment: Several commenters applauded CMS for recognizing the importance of person-centered planning and for seeki ng consistency in person-centered planning expectations across Medicaid authorities. The commenters noted that the personcentered planning process should be implemente d in a customized fashion according to the unique needs and preferences of the indi vidual. Two commenters agreed with our proposed language and one commenter added th at the person-centered planning process should be comprehensive. Response : We believe that our proposed approach will allow for the process to be incorporated with States’ current approaches to maximize the strengths and preferences of the individual. As indicated earlier in th e final rule, in an effort to streamline State requirements where possible across the progr ams, we proposed language in the CFC proposed rule that in some instances was consis tent with other HCBS final rules, such as section 1915(j) of the Act, and in some instances was consis tent with proposed languagein a recently proposed rule for the section 1915(c) waiver program, which published in the April 15, 2011 Federal Register . Based on multiple comments and the acknowledgement that additional policy work is necessary to maximize the extent to which consistency can exist across Medica id HCBS programs, we are revising the language in this section to cl arify the requirements of this process and resulting service plan as it pertains to CFC. We are taki ng more time to consider all of the thoughtful comments from this rule, the comments rece ived from the secti on 1915(c) proposed rule, and comments forthcoming from the section 1915(i) proposed rule to have additional policy discussions both internally and w ith stakeholders. We will be issuing subregulatory guidance to provide additional deta ils and expectations as it pertains to the person-centered planning process and the el ements that should be included in a person-centered service plan.
Comment : A few commenters stated that it is extremely important that the person-centered planning pro cess not interfere wi th, or delay access to, services. One commenter added that at times extensive person-centered assessment and planning processes are so time consuming that individua ls trying to avoid plac ement in a facility cannot access services in a timely manner and are forced into an unwanted institutional placement. A few commenters suggested that the regulation require States to include an expedited enrollment process for such situati ons so that individuals may receive basic attendant services and supports and avoid institutional placement while the complete person-centered service plan is being developed. One co mmenter suggested that CMS require States to complete the assessment and service plan within 30 days of application. Response : We agree that the process should notinterfere with or delay access to services. States currently conduct assessmen t processes and create service plans forHCBS programs. We do not believe that the proposed pe rson-centered principles and service plan components for CFC should be overly burdensome or time consuming. In the Collection of Information Requirements fo r implementing CFC, we estimated that a total of 3.5 hours on average would be n ecessary per individual, including the assessment, the person-centered planning process, service plan development and providing an individual a copy of the service plan. In a ddition, as we indicated in the preamble of the proposed rule, States will ne ed to have a minimum set of policies and procedures associated with the assessme nt and service plan. These policies and procedures should ensure that the process is timely. We expect States to establish guidelines that support a timeframe that res ponds to the needs of the individual, thus allowing access to needed services as quicklyas possible. We encourage States to implement policies and procedures that provide services as expeditious ly as possible. In addition, we are incorporating language orig inally proposed at paragraph (c)(2) to indicate that the pe rson-centered planning process mu st be timely, in addition to occurring at times and locations of convenience to the individual.
Comment : Another commenter suggested that while the statute uses the term person-centered, CMS should encourage States to use a consumer-directed process as consumer-directed planning puts the individual in charge of the planning process whereas the term person-centered has been used to al low others on a planning team to make all important decisions “in th eir best interests.” Response : We appreciate the commenter’s perspective and the term consumerdirected, but do not agree that the language s hould be changed for this rule. To be consistent with other Medicaid programs, we will maintain the phrase “person-centered” in referring to this process. That said, CFC has a strong focus on individual choice anddirection that is evidenced throughout the regulation. For the person-centered service plan, much effort was put into ensuring that an individual maintains a central role in both the planning process and finalizing the serv ice plan. In additio n, we are adding at §441.540(a) that the person-centere d planning process must be driven by the individual.
Comment : One commenter suggested that more guidelines be provided to States for the person-centered planning process as the proposed rule does not include qualifications for the entities responsible for the planning pr ocess and the entities States utilize may not have adequate training in se lf-determination/directi on or any true personcentered planning training. The comment er suggested that §441.540(c) include requirements for the States’ policies and pro cedures including the qualifications, training and quality assurance of thos e conducting the person-centered plans. Another commenter indicated that it would be beneficial, particular ly for individuals with mental illness, if the person-centered service planni ng process included a requirement for a facilitator who had more experience and information than family or other outside individuals chosen by the individual. The commenter note d that in mental health serv ice planning, individuals need some support to fully understand their choices and explore thei r preferences, and to learn how to assess what support they may need to carry out the plan. The commenter indicated that peers trained to perform this facilitator role might be the best option and suggested that States could be en couraged to consider that option. Response : States are responsible for determining the prov ider qualifications of the entities who will conduct the assessments and the person-centered planning process as long as the requirements in the fi nal regulations have been met. It is expected that these entities would have adequate training to perform this function. We agree additional guidance should be provided to States and we intend to issue future guidance, asindicated above, regarding our vision of th e person-centered process and how we intend to apply that philosophy acro ss Medicaid HCBS programs.
Comment : One commenter asked if States can leverage existing single entry point entities currentlyunder contract for section HCBS 1915(c) waiver assessments and planning processes to conduct the person-centered planning pr ocess outlined in §441.540. Another commenter asked CMS to clarif y whether the State can delegate its responsibilities to other enti ties, such as a managed long-term care plan, to develop service plans, budgets, etc. Response : States have the flexibility to leverage existing entities to conduct various functions required in CFC, provided all requirements of the final regulation are

met. Comment : One commenter stated that the prop osed rule implies that two separate meetings will be held, one to complete the assessment and one to develop the service plan through the person-centered planning pro cess, and recommended, along with another commenter, that the rule reflect the ability to combine these meetings. Response : We did not intend to require two separate and distinct meetings. While individuals and States may choose to conduct separate meetings, particularly depending on the length of the assessment and the availability of all parties involved, we believe that it is appropriate that the asse ssment of need and the person-centered planning process could be combined into one meeti ng. We have not revi sed the regulation, to maintain flexibility, based on individual circumstances.
Comment : Two commenters supported the id entification of all of a person’s needs (not just what is offered under CFC). One of the commenters also supported the identification of the individual’s desired outco mes from services and suggested that theassessment cover the individua l’s broad life goals and desires as well. The other commenter added that CMS should require thatall needs id entified during the assessment be addressed in the service plan, ensuring that the needed service is actually being addressed either informally and/or by applying to other programs and benefits. Response : While this comment references th e assessment, the specifics of the comment relate to this section so we will addr ess this comment here. It is our expectation that during the assessment process, and the subsequent person-centered service plan process, an individual’s CFC se rvice and supports needs, as well as what is important to the person with regard to pref erences for the delivery of su ch services and supports, be identified and addressed. In States c onducting a more comprehensive assessment that exceeds the scope of CFC services and supports , a determination would then need to be made as to which services and supports could be delivered under CFC and which are more appropriately delivered through another benefit or informal support. For the purposes of CFC, States would only be requi red to provide the services and supports required under CFC as indicated by the final rule. However, we encourage States to coordinate among all the services an individual is eligible for to determine how to best meet an individual’s needs as identified duri ng this assessment. As indicated above, we will issue additional guidance regarding our vision of the person-centered process and how we intend to apply that philoso phy across Medicaid HCBS programs.
Comment : One commenter suggested that CMS add language that requires coordination with other government-funded hea lth services that may also be providing personal care to consumers, stating that the absence of such clarity can threaten the continuity of care and risk care duplication.Response : It is our expectati on that during the assessmen t of functional need and the subsequent person-centered service planning process, all a ttendant/personal care needs and currently received services and s upports in place to meet those needs would be identified. A determination would then need to be made as to which services and supports could be delivered under the CFC Option and which are more appropriately delivered through another benefit. States ar e familiar with this process and we do not agree that additional regulatory language is ne cessary. States are expected to take every step to ensure that services are not being duplicated and i ndividuals currently receiving attendant services and supports experience continuity of care during a transition to CFC.
Comment : One commenter noted that the cr iteria described including consumer direction, convenience to time and place, cultur al considerations, conflict resolution, the ability to alter the plan and real choi ce are all good markers for a good process but indicated that these should be regarded as a minimum level of responsiveness and not a maximum. The commenter added that respect ing a person’s gender id entification is also important. Response : We appreciate the commenter’s pe rspective regarding the criteria being regarded as a minimum level of respons iveness and not a maximum. We agree that respecting an individual’s ge nder identification is important. We expect that all individuals will be treated with respect.
Comment : One commenter suggested that CMS offer guidance on how to provide necessary support to ensure the pers on with a disability has meaningful input in the planning process. Response : We will consider this suggesti on as we work on additional guidance regarding our vision of the pe rson-centered process and how we intend to apply thatphilosophy across Medicaid HCBS programs. In the meantime, we will look to States to implement a person-centered planning proce ss that ensures meani ngful input from all individuals in the CFC program.
Comment : One commenter voiced concern over the requirement that the person-centered planning process must occur at “times and locations of convenience to the individual” as referenced in paragraph (a)(3), as they believed that this is overly restrictive and beyond the statut ory requirement. The commente r stated that the process should be scheduled when it is mutually convenient for both the agency staff and individuals and added that it may be necessa ry to have the assessment conducted at the individual’s home so that the staff can more accurately assess the client’s needs in the context of their home environment and comm unity. Another commenter urged CMS to include language that will allow States flexib ility to put reasonable limits on the optional locations for these assessments/plans. One co mmenter indicated that to adequately assess for environmental as well as health and safety needs, States must be allowed to require the face-to-face meeting be held in the participant’s place of residence and recommended deleting the words “and locations” from paragraph (a)(3). Response : We appreciate the commenters’ concerns and suggestions. The commenters appear to be talk ing about both the assessment of functional need, which was required in the proposed rule to be conducted face-to-face with the individual, and the person-centered service plan development, which is to occur at times and locations of convenience to the individual. While we do not prescribe the setting in which the assessment of functional need takes place, we encourage the assessment to be conducted in an individual’s home in order for the entity conducting the assessment to get a more informed perspective of the individual’s suppo rts and needs in their residence. However,we are not mandating this as some indivi duals will use CFC to transition from an institutional setting, and therefore, woul d be assessed while still residing in the institution. With regard to the person-cente red planning process, if this process takes place separate and apart from the assessment of functional need, we expect that this meeting be scheduled at a time and place that is convenient to all parties taking part in the process, but particularly to the individual. We recognize that there will be practical constraints for the professionals involved in the person-centered planning process and the assessment of functional need, such as avai lability being limited to certain business hours; however, we do not believe it is necessa ry to revise the regulation as suggested.
Comment : One commenter asked what the expectations/requirements are for States in terms of supports that address the needs identi fied by the assessment of expanded areas such as employment, school, income and savings, and social goals as referenced in paragraph (b)(3). The comme nter indicated that providing this expanded assessment will result in additional costs to St ates and it is unclear what States would be required to address. The commenter asked if these requirements would be limited in scope to “the provision of se rvices” as stated in §441.535(a)(2 ) and the qualification at §441.515 that States provide CFC “in a manner that provides the supports that the individual requires to lead anindependent life.” The commenter asked CMS to confirm that a State would not be required to provi de money-management support, and it would not have to have an outcome measured in th e quality assurance system, if an individual had the goal to save money for their grandchi ld’s college fund in their assessment/plan. The commenter wanted to know how this expand s a State’s responsibil ities or liability. Response : While this comment references as pects also covered in the assessment section, the main issue expressed in this co mment relates to this section so we willaddress this comment here. As indicated above, we have revised the regulation to indicate that it is onlythe need for services and supports within the scope of CFC services that must be assessed. It is our expectati on that during the assessment process, and the subsequent person-centered service plan process, an individual’s CFC service and supports needs as well as what is important to the person with regardto preferences for the delivery of such services and supports be identified and ad dressed. In States conducting a more comprehensive assessment that exceeds the scope of CFC services and supports, a determination would then need to be made as to which services and supports could be delivered under the CFC and which are more appropriatel y delivered through another benefit or informal support. We be lieve that many States already have such a system in place. For the purposes of CFC, States would only be required to provide the services and supports required under CFC as i ndicated by the final rule. However, we encourage States to coordinate among all the services an individual is eligible for to determine how to best meet an individual’s needs as identified during this assessment. After considering the feedback received and the acknowledgement that additional policy work is necessary to maximize the ex tent to which consistency can exist across Medicaid HCBS programs, we are revising the language in this section to clarify what must be included in the plan as it pertains to CFC. As indicated above, we are taking more time to consider all of the thoughtfu l comments from the CFC proposed rule, the section 1915(c) proposed rule and the comment s we will receive in response to the forthcoming section 1915(i) proposed rule to have additional policy discussions both internally and with stakehol ders. We plan to issue a dditional guidance regarding our vision of the person-centered process and how we intend to apply that philosophy across Medicaid HCBS programs.Comment : One commenter indicated that in §441.540(a)(5), CMS describes the requirements for service plans including a requ irement that States have “strategies for solving conflict or disagreement within the pr ocess, including clear conflict of interest guidelines for all planning participants” and in §441.555(b)(2)(xiv), CMS requires that participants be provided “information about an advocate or advocacy systems ... and how [they] can access [such] systems.” The commenter then pointed out that CMS does not discuss CFC appeals processes in the propos ed rule and recommended that CMS clarify the appeals processes and the relation to th e provisions noted above. Another commenter asked if CMS plans to intend for an individual to have the right to appeal the service plan. A commenter suggested that CMS require thatboth the final written assessment and the service plan include information on the indivi dual’s right to appeal if she/he disagrees with the assessment or any parts of the service plan. Response : An individual has the right to appeal the service plan. The personcentered service plan, which is based on th e assessment of functional need, must be finalized and agreed to in wr iting by the individual. If th e individual does not agree with the findings of the assessment or the propos ed service plan based on these findings, an individual does not have to agree to or sign the service plan. The individual would have the right to disagree with the assessment and service plan at any time during the process. As such, States electing the CFC option are al so required to have appeals for denials and reconsideration procedures of an individual se rvice plan in place as part of their quality assurance system for the CFC.
Comment : Several commenters noted that it is not clear what components of the service plan proposed by CMS are “require d” versus “recommended” and pointed out that there is also inconsistency in the use of terms (for example, Support Plan, ServicePlan, and Plan of Care). The commenter s recommended that, regardless of the term chosen, the term reflect the person-centered a pproach and participant- directed nature of
CFC. Response : As indicated in the proposed ru le, the elements in §441.540(b) are all required. This is evidenced by the use of the term “must” in the last sentence prior to the numbered list of elements. We are revisi ng the regulation to ensu re that all “plan” references throughout the rule i ndicate that it is the “pers on-centered service plan.” In addition, based on multiple comments regarding the requirements of the plan at §441.540(c), we have removed the duplicative requi rements that were already captured in §441.540 (b) and have moved the remaining requirements to the more appropriate Support System section at §441.555.
Comment : One commenter stated that the person–centered service plan should reflect that the place where the individual reside s is the least restrict ive setting available based on the individual’s need for a ha ndicap accessible place of residence and affordability, as well as the consumer’s freedom of choice to live in that particular place of residence. The commenter added that the person-centered service plan should determine the appropriate setting fo r an individual covered under CFC. Response : While we agree that the service pl an could reflect that an individual resides in the least restrictive setting of thei r choice, we do not agree that the service plan should determine the appropriate setting for anindividual. We have revised the service plan process to add paragraph (a)(8) requiring States to record the alternative home and community-based settings that that were cons idered by the individual. We also amended the person-centered service plan to require an assurance that the setting in which theindividual resides is chosen by the individual. This will be reflected as a new paragraph (b)(1), and all existing text will be renumbered accordingly.
Comment : One commenter suggested that to protect the integrity of the program and to ensure adherence to service plans, that CMS allow for fiscal or other program intermediaries to validate service plans, i ssue rules for the training of attendants, and develop a process to ensure that services and supports are assessed for appropriateness. Response : States may decide to have a mechanism by which a service plan is compared to the services provi ded to protect the integrity of the program, but we are not clear how allowing a fiscal or other program in termediary to issue rules for the training of attendants would protect program integrity. States have the discretion to determine provider training and qua lifications as long as the requirements in the final rule are met. We believe the assessment of functional n eed, person-centered serv ice planning process and finalizing of the service pl an should result in appropriate services and supports being provided to the individual to meet their assessed needs.
Comment : One commenter asked CMS to clarify whether a State may use a prior authorization process to ensure services rendered and paid for match the service needs indentified through the service planning process. Response : States have the flexibility to use various methods to ensure that services provided match the needs identified thro ugh the assessment and service plan. States will need to describe in their State pl an amendment how they propose to utilize the prior authorization process.
Comment : Two commenters suggested that the development of the person-centered service plan, as spelled out in the proposed rule, should include healthpromotion and wellness components designed to mitigate health risks and maintain and support healthful behaviors. Response : As indicated above, additional polic y work is necessary to maximize the extent to which consistency can exist across Medicaid HCBS programs and we are taking more time to consider all of the thoughtful comments from this rule, comments received from the section 1915(c) proposed rule, and forthcoming comments from the section 1915(i) proposed rule to have additional policy disc ussions both internally and with stakeholders. We plan to issue a dditional guidance regarding how we intend to apply the person-centered philosophy across Medicaid HCBS programs. We will continue to consider this co mment during that process. In the meantime, there is no prohibition against a State inco rporating these elements into the development of the person-centered service plan. In addition, we are taking this opportunity to add an additional requirement that will allow for th e incorporation of future person-centered planning requirements published by CMS.
Comment : A commenter noted that paragr aph (b)(2) refers to the “personcentered functional assessment” and recomm ended that CMS change the language to: “reflect clinical and support needs as identified through a f unctional assessment” as they believe that §441.540 needs to more clearly refl ect the distinction be tween the assessment of functional need and the pe rson-centered service plan. Response : We are revising the regulation to say “reflect clinical and support needs as identified through the assessment of functional need.” This is now paragraph (b)(3).
Comment : Several commenters suggested th at in paragraph (b)(3) CMS change the phrase “individually iden tified goals” to “partici pant identified goals.”Response : We do not agree with the co mmenters’ suggestion. While an individual receiving services and supports under CFC will be a “participant”, we choose to maintain the term “individual.” This te rm is used throughout the regulation and we prefer to be consistent so as to not create any unnece ssary confusion.
Comment : A commenter encouraged CMS to require in paragraph (b) that the standard assessment of need include the i ndividual’s assessment of their strengths and their goals regarding housing, services, education, transpor tation, employment, recreation and socialization, wellness and the supports need ed to enable them to live independently in the community setting of their choice, in addition to a person’s preferences. Response : The proposed rule at §441.540(b)(1) indicates that th e person-centered service plan must reflect the individual ’s strengths and preferences. Section 441.540(b)(3) proposed language to address an individual’s goals and desires and included the term “may” to suggest aspects th at could be included inthe person-centered service plan. Based on comments and furthe r consideration we have decided not to specify particular aspects of anindividual’s strengths, prefer ences and goals that could be assessed or included in the person-centered plan as we do not want to create an unintended limit on the aspects th at could be included in the se rvice plan. Therefore, we are revising the regulation to read “Incl ude individually identified goals and desired outcomes” at paragraph (b)(4).
Comment : Several commenters indicated th at the proposed rule appropriately sets forth multiple factors to be considered in determining the need for and authorization/provision of services, but th ey, and multiple other commenters, voiced concern regarding the identific ation of informal supports. Other commenters supported the consideration of natural and informal supports but did not want it to be construed thatthe existence of family, natural and other info rmal supports could be used as a reason to reduce the level of services an individual w ould receive. Multiple commenters indicated that these supports can be considered as appropriate in determining the individual’s needs, strengths, and preferences, but eligib ility and supports covere d for an individual by CFC should be based upon functional need, i ndependent of the existence of family or other informal caregivers. Se veral commenters believed that reliance on family and other informal supports who may not be skilled/tr ained to care for certain conditions and may have limitations of their own could lead to ad ditional strain on families and could put the consumer at risk. One commenter voiced conc ern that the regulation does not include the CMS Handbook definition of informal care (tha t which is capable, av ailable and freely given) and that without emphasis on “freely given” States may a ssign the responsibility of this care to family members and othe r informal supports. Another commenter suggested that at a minimum, if family members or other in formal supports are identified in the assessment/plan, the participant must indicate acceptance of the unpaid supports in lieu of provided services and the family members or other informal supports must indicate they are willing and able to perform the roles/tasks. The commenter added that the participant and family/informal supports must also have the ability to no longer accept or to withdraw their support without harming the beneficiary and the plan should be adjusted to reflect the lost support. Another comment er added that if the State includes family or other informal caregiv ers in the service plan, it should be a requirement that the needs of the family or other informal caregiver also be assessed and addressed, especially if crucia l aspects of the service plan depend on these caregivers. The commenter added that such an assessm ent would identify the family caregiver’s needs, strengths and preferences and connect such caregivers to criti cal supports such asrespite, training or other a ssistance, as helping the careg iver to continue in their caregiving role could delay or prevent institutionalization of the care recipient. Another commenter indicated that the consideration of unpaid assistance needs to take into account the sometimes oppressive influence this has on family and personal relationships adding that these relationships should not be forced to become strictly defined as a caregiver/care-receiver relations hips at their core level a nd that the provision of unpaid but necessary services can a ffect the ability of the consumer to control how his/her services are provided. Other commenters ur ged CMS to remove the language from the preamble. Response : While these comments reference aspects also referenced in the preamble for assessment of need, the require ment referenced is included in §441.540 so we will address this comment here. We appreciate the concerns regarding the potential that the identification of natural supports coul d result in the decrease of services provided under CFC, or these natural supports might be weakened as a result of the expectation that they be provided. We exp ect that the identification of these natural, unpaid supports be taken into consideration for the purpos e of understanding the level of support an individual has, and should not be used to reduce the level of serv ices provided to an individual unless the individua l chooses to receive, and th e identified person providing the support agrees to provide, these unpaid supp orts to the individua l in lieu of a paid attendant. We have modified the regulation to incorporate this intention. We also expect that if an individual is recei ving services and supports, eith er paid or unpaid, that if circumstances change, an individual has th e right to request a reassessment of need and/or revision to the person-centered pla n. For the concern regarding individuals providing supports having the skills or traini ng to care for certain conditions or havingtheir own limitations, having a full picture of the individual’s paid and unpaid supports will assist the State and the i ndividual in determining what level of support the individual requires and what services need to be accesse d to meet the individual’s needs and ensure their health and safety. With regard to th e recommended requirement that the needs of the family or other informal caregiver also be assessed and addressed, we agree that it is important to consider these needs to encour age and preserve support for the individual, but we do not agree that this should be an additional requirement in the CFC final regulation. As noted above the order of the paragraphs has sh ifted and this requirement is now reflected at paragraph (b)(5).
Comment : One commenter indicated that the risk assessment portion of the planning process is a challenge , as many consumers are compet ent adults and need to be allowed the same level of freedom and pers onal control as a non-disabled person, and allowed to assume risk at the same leve ls as non-disabled persons. The commenter voiced concern that this section could potenti ally be used to impede a consumer’s goals and desires and recommended that if there ar e disability-related c onditions that impact the ability of the individual to assess ri sk, their plan should only impinge on their freedom commensurate with the need for reason able safety. The commenters added that strategies for risk abatement should include voluntary participation in skills training and peer support to improve their ability to access and assume risk, and that the consumer’s use of additional training for the personal as sistant related to ri sk avoidance may be another strategy. Another commenter asked th at CMS clarify that a contingency plan should be part of the service plan, to ensure that individuals are prepared and have a backup attendant care provider if the regular attendant care provider is not able to provide services.Response : We agree that individuals s hould have personal control and the opportunity to assume risk. We proposed at §441.540(b)(5) that the person-centered service plan reflect risk factors and m easures in place to minimize them, including backup strategies when needed. Service pl ans will need to reflect risk factors and measures in place to minimize them for each indi vidual regardless of disa bility or level of need. Nothing in this secti on should be used to impede anindividual’s goals and desire outcomes or to impinge on an individual’s free dom. As noted in response to comments received in the Definitions section, we are modifying the requirements of the person-centered service plan to remove the “as needed” language, to indicate that all individuals should have an individualized b ackup plan as specified in paragraph (b)(6). We would like to point out that for the purpos es of CFC, this backup plan could include formal or informal backup supports as part of the plan.
Comment : A commenter voiced concern rega rding the requirement that the individual sign the service plan as this may not always be possible due to disability or inability to write, and suggested that the re gulation be amended by adding “if possible.” Another commenter suggested language in paragraph (b)(6) that would allow an individual’s representative to sign the service plan when appropriate, and suggested the removal of a similar requirement in paragraph (d), as they felt the emphasis should be related to the individual and persons re sponsible for implementation. Another commenter indicated that the requirement fo r all individuals and providers to sign the plan may be onerous and logistically comp licated as consumers can change providers frequently for a variety of reasons, and cons umers should be able to obtain agreement from providers through formats other than the service plan. Other commenters added for clarification that the signature expectation is only for t hose involved with the actualassessment/planning process and not for the providers and others not present who are responsible for the implementation of the pl an. Another commenter recommended that the language in paragraph (b)(6) be changed to: “be distributed to all individuals and providers responsible for its implementation and signed by all parties within 30 days of the development date” as they felt that requ iring all provider signatu res at the point of development would delay services. Response : After consideration of these co mments, we have revised the final regulation to indicate th at the plan be finalized and agreed to in writing by the individual and signed by all individuals and providers responsible for its implementation. While we understand that some individuals may not be able to provide an actual signature, we believe that it is important to capture that the individual agrees to the service plan as finalized. Should an individual not be able to make any indication that they agree with the plan in writing or the i ndividual does not have a representative who can do so on the individual’s behalf, States will need to explain the methods they propose to use to indicate that the individual agrees with th e service plan. While we do not specify the timeframe by which States must obtain the signature of the providers responsible for implementation of the plan, we expect th at any provider that is responsible for implementing services or supports authorized in the service plan should receive and sign the individual’s service plan, as this would be necessary to not only understand the level of CFC services and supports needed by an indi vidual, but also the individual’s strengths, preferences, goals and desire d outcomes related to the provision of the services and supports. We are reflecting this change at a revised paragraph (b)(9) under §441.540, and have removed this language from pa ragraph (b)(6) and paragraph (d).Comment : One commenter suggested that CMS should clarify explicitly at paragraph (b)(7) that the plan must al so be understandable to the individual’s representative. A few commenters recomm ended that the regulations require the development of the service plan be c onducted in a linguisti cally and culturally appropriate manner for the individual (and /or their appointed representative) as determined by the individual in a fully accessible way. Response : We appreciate the commenters’ suggestions. However, we do not agree that paragraph (b)(7) under §441.540 needs to clarify explicitly that the plan must be understandable to the indivi dual’s representative as the language at paragraph (b)(7) encompasses a representative. We also be lieve that the require ment at §441.540(a)(2), that the planning process provide s necessary support to ensure the individual directs the process to the maximum extent possible, and th e requirement at paragraph (a)(4), that the process and plan reflects cultural considerations of the individual, encompass the other commenters’ suggestions.
Comment : With regard to the requirement to include a timeline for review, a commenter suggested that CMS add a requirementat paragraph (b)(8) that reviews of the service plan occur at least every 18 months to assure that not too much time will pass between reviews and does not place undue burden on the participant or service providers. Another commenter suggested that the person-c entered plan of care be revised as needed to reflect the goal of providing the least restrictiv e setting. Another commenter strongly supported the periodic reassessment and revi sion of the care pl an at least every 12 months. Another commenter suggested th at CMS require timely review (within 1 week) when the individual believes that the plan needs to be revised. Multiplecommenters recommended that paragraph (b)(8) be expanded to read“include a timeline for review and implementation of changes.” Response : While we proposed at paragraph (b)(8) that the person-centered service plan include a “timeline for revi ew”, we also proposed requirements at §441.540(e) for reviewing the service plan. To clarify our expectati on regarding review of the service plan, we are removing the language at paragraph (b)(8), as it is encompassed later in this section and have moved the language proposed at paragraph (e) to (c) with the exception of “or the individua l’s representative, as applicable” which we have removed.
Comment: One commenter stated that the “agreement” portion of the service plan, as required in paragraph (d), needs to be strengthened. The commenter indicated that “agreement” needs to be elevated to th e level of a “contract” to avoid what they perceive to be the “pitfalls” of current HCBS waivers. The commen ter indicated that in their State, the waiver service plan can be unilaterally altered by the State without the ability of clients to challenge the State’s de cision. The commenter believes this is a fundamental denial of a civil right, must not be extended in to the new rule, and must be corrected within current HCBS waivers. Response : We disagree with the commente r’s suggestion that CMS change the service plan agreement language to a contract . We believe that the requirement proposed at §441.540(d), now reflected in para graph (b)(9), that the servi ce plan must be agreed to in writing by the individual or their represen tative, as applicable, will ensure that the service plan is approved by the individual. St ates may not alter an individual’s service plan without the individual’s knowledge or a pproval. In addition, an individual has the right to appeal any State deci sion to decrease services. With regard to other HCBSprograms including waivers, changes to their pr ocesses are not within the scope of this regulation.
Comment : With regard to distribution of the plan at §441.540(b)(10), one commenter recommended that CMS should requir e that a copy of the service plan be placed in the hands of the consumer. A nother commenter suggested that the phrase “including the participant” makes it look like pr oviding the plan to the individual is an afterthought and that the consumershould be able to decide who else received a copy of the plan, as there may be services or goals id entified in the plan that do not need to be shared with every provider. Response : It is expected that each individual receiving services under CFC would receive a copy of the finalized service plan. We interpret the commenter’s recommendation to mean that we should require States to hand-deliver the service plan to the individual. While we do not discourage a State from doing so, we do not require that the service plan be hand-delivered to each individual. The intent of the language “including the participant” was to emphasize th at the individual must receive a copy of the plan. We have revised paragraph (b)(10) to make this clear. We appreciate the commenter’s indication that individuals should determine with whom to share their person-centered service plan. While we do not believe it is necessary to include this requirement in the regulation, we expect anindividual’s preferences for the level of information in the plan that is shared with other providers to be respected.
Comment : One commenter indicated that the service plan should be composed to fully meet the needs of the individual regardless of the service delivery model and any shortcomings of a plan within the limitati ons of the Medicaid program or the delivery model should be referenced to the individual. The commente r added a person needs to beinformed of their options, th e risks of choosing particular options, the alternatives available, and the anticipated consequences of any alternatives. The commenter added that if a limitation in the State program puts anindividual at risk of adverse consequences that could be mitigated in an alternative approach available under the State program, the service planning process should provide the i ndividual with that information before the plan is finalized. Response : It is our expectati on that during the person-ce ntered planning process and development of the service plan, the issu es indicated above and options available will be articulated and discussed w ith the individual, regardless of the service delivery model. In addition, we are taking this opportunity to make clear that the service plan requirements for the self-directed model with service budget must be incorporated into the person-centered service plan when applicable.
Comment : Several commenters requested that CMS explain the rationale for service plan criteria related to the “provision of unnecessary or inappropriate care.” Response : This requirement was included to emphasize that the service plan should reflect and authorize only the services and supports necessary to meet the assessed needs of the individual.
Comment : One commenter asked who has final approval of the service plan. Several commenters stated that the preamble e xplains that the entire plan must be in writing and agreed to by the individual, but the regulation only requires “signing off” on the plan in writing. The commenters recomm ended that specific requirements be put in the plan itself, in writing, for the consumer to have adequate time to review the plan themselves or with others.Response : The regulation does not indicate that an individual only needs to “sign off” on the service plan, but requires the serv ice plan be “finalized and agreed to by the individual.” As the individua l, and as appropriate the i ndividual’s representative, are included in the planning process and the develo pment of the service plan, we believe that the individual should know what the plan includes throughout the process. Additionally, the service plan, as a whole, must be finalized and agreed to, in writi ng, by the individual. Therefore, we do not agree that revi sions to the regulation are necessary.
Comment : One commenter indicated that the main conflict of interest in the care planning process emanates from the pressure on State agencies and their contractors to keep spending to certain levels, to promote or discourage the use of certain services based on cost and availability, or to enforce unwr itten rules about levels of services which results in consumers previously determin ed eligible for services experiencing terminations either of particular services or of their HCBC eligibil ity all together. The commenter recommended that the conflict of interest provision at §441.540(c)(4) address these conflicts as they are very real and lim it consumer access to the services they need. Response : The person-centered service plan is based on an assessment of functional need. If an indi vidual requires a particular level or amount of attendant services to meet these needs, the services should not be decreased at any time unless an individual no longer requires that level of support. An i ndividual must agree to and sign any service plan, and therefore, we do not be lieve that we need to issue any further guidance to States regarding th e reduction of services absent a decrease in need. We do reiterate the ability of a State to implement limits on the amount, duration and scope of CFC services, as long as these limits are not ba sed on an individual’s ag e, type or nature of disability, severity of di sability, or the form of home and community-based attendantservices and supports that th e individual requires to l ead an independent life, as prohibited in the statute. The conflict of interest provisions pro posed at §441.540(c)(4) were intended to protect the individual and relate to simila r protections at §441.555. We are moving these protections to the more appr opriate Support System (§441.555).
Comment : Two commenters indicated that there is potential for a significant conflict of interest resulting in public and private entities that authorize or pay for services and the individuals affiliated with th em participating in the development of the person-centered service plan and suggested CMS include these entities at §441.540(c)(4). Response : We believe that this is already ad dressed in this section as paragraph (c)(4) indicates “that apply to all individuals and entities, public or private.” As indicated above, this section is being moved to the more appropriate Support System.
Comment : One commenter recommended that the conflict of interest provisions be clarified, as they may exclude a provide r who conducts an assessment from providing one or more services to i ndividuals under CFC, which the commenter believes would undermine their State’s current delivery system . The commenter indi cated that its State pioneered and predicated its core models of long term care and home care on the consolidation of the assessmen t, care management and servic e delivery functions within, and at the provider level, whic h has been very successful interms of cost efficiency, timely integration, and provision of services in accordance with the individuals needs. The commenter noted that the prohibition of th is coordinated approach should not be part of CFC and stated that it was not required by the statute. Response : As noted earlier, the conflict of in terest provisions have been relocated to the more appropriate Support System , §441.555. While we do not believe it isgenerally appropriate for an en tity that would benefit financ ially from the assessed needs of the individual to also be the entity to perform the assessment of functional need or the person-centered planning process for the in dividual, we acknowle dge that in some geographic areas there may be circumstances in which the only willing and qualified entity to perform the assessment of functiona l need and/or the development of the personcentered service plan also provides the H CBS services and suppor ts in that area. Therefore, we are adding additional la nguage to address this circumstance.
Comment : Multiple commenters expressed concern regarding the proposed conflict of interest standards included in §441.540(c)(4). One commenter indicated that the proposed rule is contradictory with regard to the assessment of need in that section §441.535 indicates that family members can support the individual, serve as representatives and be paid providers wher eas paragraph (c)(4) excludes the family member from conducting the assessment/servi ce plan. Another commenter suggested that there was a contradicti on in the conflict provisions between the mandate that the individual be permitted to designate who may assist them with service plan development and who may provide the actual services. Multiple commenters indicated that the total prohibition of family members is too broa d and may inappropriately undermine the preference of individuals to choose persons th ey wish to involve. Another commenter added that while the commenters agree that the assessment and planning process needs to be done by a neutral party, the regulation se ems to include and exclude family/other participation. Several commenters urged CM S to develop a specific process by which the individual or authorized repr esentative can make a written informed decision to waive the prohibition on family member involvement indevelopment of the service plan that includes safeguards to facilitate an independent informed choice to wa ive the prohibition.Multiple commenters suggested that “involved in” at paragraph (c)(4) be changed to “conducting” as this conflict of interest provision shoul d apply only to the team conducting that assessment and creating the plan , as a relative may be “involved in” the process to help the individual with any one of a number of functional limitations, assist with communication, or distribute and co llect materials. Another commenter recommended that the words “and service plandevelopment process” be removed from paragraph (c)(4) and that CMS change the language in the same paragraph to: “at a minimum, these standards must ensure that the individuals or en tities conducting that assessment of need are not.” Multiple commen ters objected to the conflict of interest provisions in paragraph (c)(4) altogether and suggested that CMS remove them, stating that service plan development should often include family members and service providers and that it is counterproductiv e, and potentially undermines a person’s preference, to exclude them. Other commenters asked that CMS provide clarifying language to explain the intent of the provis ion. Other commenters aske d CMS to provide guidance reconciling an individual’ s ability to choose participants w ith the requirement that certain individuals are not to be include d in the planning process. Response : These comments illustrate the need to clarify the intent of this provision. We acknowledge the confusion cause d by use of the term “involved in” when describing the conflict of interest protections. To clarify our intent, we are revising this paragraph to state “At a minimum, these stan dards must ensure that the individuals or entities conducting the assessm ent of functional need and person-centered service plan development are not....” As noted above, th is new language will now be reflected in §441.555, Support System.Comment : A commenter suggested that at§441.540(c)(4)(i), CMS change the language to “family members, as defined by th is section” indicating that as written the language does not provide conflict of interestprotections to Lesbian, Gay, Bisexual and Transgender individuals as ther e are different types of families that may not fall under the definition of “related by blood and marriage.” Another commenter asked for additional guidance on the exclusion of blood relatives, financially responsible relatives, paid caregivers and those with a financial interest in provided services from the assessment and service plan develo pment processes. Response : We do not believe that such revisi on is necessary, given the revision to the regulation text described above.
Comment : One commenter stated that physicia n input is necessary and indicated that it is not clear whether the proposed rules intend to ex clude primary care providers (physicians, physician’s assistants, etc) from the assessment and planning process. Response : Nothing in this regulation ex cludes primary care providers from participating in the assessment of functi onal need or the development of the personcentered service plan, as long as the requirements of this section are met.
Comment : Multiple commenters recommended that subpart (e) be expanded to read “the review and revision of the servic e plan must be conduc ted according to an established timeframe that is explained to the consumer.” Response : We believe that a person- centered service plan, based on a reassessment of functional need, should be conducted at least every 12 months, at a minimum, to ensure that an individual’s needs are commensura te to the services authorized in the service plan, as we unders tand that an individual’s needs can change significantly over time and as a result of various circumstances. We include severalprovisions related to the reassessments and re views to the service plan that we believe capture various circumstances necessitating a reassessment and updates to the service plan. Therefore, we do not agree that we n eed to revise the langua ge. While we do not specify in regulation a particul ar timeframe for the review of the service plan based on each of the provisions, we expect States to re spond to the requests for review in a timely manner as specified in paragraph (c). Upon consideration of th e public comments receive d, we are finalizing §441.540 with the following revisions:

● We are adding a requirement that th e person-centered planning process be driven by the individual;

● We are indicating that the scope of the person-centered se rvice plan is only required to address the services and supports provided under CFC;

● We are consistently using the term “person-centered se rvice plan” throughout the document;

● We are adding a requirement in paragra ph (a) that the person-centered planning process must record the alternative home and community-based settings that were considered by the individual;

• We are adding a requirement in para graph (b) that the person-centered service plan must indicate th at the setting in which the in dividual resides was chosen by the individual;

● Paragraph (b)(3) will nowsay “reflect clinical and support needs as identified through the assessment of functional need;”● We are modifying what is now paragraph (b)(4) to modify “desires” to “desired outcomes”, to remove the specific examples of goals that could be addressed in the person-centered service plan;

• We are modifying what is now paragra ph (b)(5) to indicate that natural supports should not supplant servi ces and supports provided under CFC.

● We are modifying what is now paragraph (b)(6) to require all individuals to have an individualized backup plan specifi ed in the person-cent ered service plan;

● We are removing the proposed language at paragraph (b)(8);

● We are modifying what is now paragr aph (b)(9) to require that the personcentered service plan be finali zed and agreed to in writing by the individual, and signed by all individuals and providers re sponsible for its implementation;

● We are modifying paragraph (b)(10) to indicate that the person-centered service plan must be distri buted to the individual and others involved in the plan;

● We are revising §441.540(b)(11) to inco rporate the service plan requirements for the self-directed model with se rvice budget at §441.550, when applicable;

● We are adding §441.540(b)(13) to state “O ther requirements as determined by the Secretary;”

● We have relocated the language from (c)(1) to the more appropriate Support System §441.555, relocated “is timely” from proposed (c)(2) to the beginning of paragraph (a)(3), removed th e duplicative requirements fr om the proposed paragraph (c)(3) that were already captured in § 441.540 (b), revised the language proposed at paragraph (c)(4) to state “At a minimum, these standards must ensure that the individuals or entities conducting the asse ssment of functional need and person-centered service plandevelopment are not”, and have moved this paragraph to the more appropriate Support System §441.555.

● We have removed paragraph (d) as th e requirements in the proposed (d) were incorporated in the revised paragraphs (b)(9) and (10).

● We have removed paragraph (e) as these requirements are now reflected at paragraph (c) with the exception of “or the individual’s re presentative, as applicable” as this has been removed. K. Service Models (§441.545) We proposed that a State may choose one or more of the serv ice delivery models defined in the statute. We categorized th ese models into two main groups, the Agency Model and the Self-directed M odel with Service Budget. We proposed to further define the categories within the Self -directed Model with Service Budget to include the models specified in the statute, incl uding financial management entity, direct cash, and vouchers.
Comment : Many commenters expressed support of the efforts to align CFC with Medicaid HCBS programs like section 1915(j) of the Act. Many other commenters offered support for the service models descri bed in the proposed rule, including allowing States to use multiple service models. Ma ny commenters strongly supported the direct cash option and the inclusion of financial management activities. Response : We appreciate the commenters’ support.
Comment : One commenter noted that in the definition sect ion, §441.505, the rule uses the term “Agency-provider model” and in §441.545 the term “Agency model” is used. Response : We have revised the rule at §441.545 (a) to make this technical correction.Comment : One commenter recommended we include the statutory language regarding maximized consumer control found at section 1915(k)(1)(A )(iv)(II) of the Act in the opening language of this subpart. Th e commenter recognizes that it has been incorporated by definition into the term “self- directed” but considers it important here for clarity. Response : We appreciate the commenter’s perspective, but we do not believe such a revision is necessary, as the “cons umer controlled” philosophy is inherent throughout this regulation.
Comment : One commenter requested that the regulation allow States to differentiate service models among popul ations serviced under CFC. Response : Section 1915(k)(3)(B) of the Act requires that services must be provided without regard to the individual’s age, type or nature of di sability, severity of disability, or the form of ho me and community-based attendant services and supports the individual requires to lead anindependent life. When a State specifies what service delivery models will be pr ovided under CFC, the model must be available to all individuals meeting the medical necessity for CFC services. Therefore, States may not target certain service delivery models to sub- populations of individuals eligible for CFC. However, States could give all individuals participating in CFC the ability to choose among more than one service model.
Comment : Many commenters expressed concern and disagreed with the fact that the regulation gives States a choice to provide one or more service models. Many commenters believe the proposed rules did not carry out the st atutory intent that States must offer people with disabilities a full range of options (including choice of service model) for receiving home and community-b ased services. The commenters believeStates should be required to offer both an ag ency with choice as we ll as a self-directed model with service budget. The commenters i ndicate that a “choice” does not exist if the State only offers one model. One comme nter recommended the regulation require assurances that individuals, rather than the State, would have the ability to select the service model that is best suited for their specific needs. Additionally, the commenters expressed concern that States could choose to only provide services under a self-directed model with service budget, wh ich would potentially preven t individuals without the capacity to self-direct from accessing these se rvices. Similarly, States could choose to only select the agency model, which would potentially prevent indi viduals from stating control over the budget and prev ent them from having control to the maximum extent possible. The commenters indicated that either of these alternatives alone is inconsistent with the statutory language. The commenter s requested the regulation be revised to assure that individuals have the opportunity to select the se rvice model that best meets their needs. Another commenter believed States should not be allowed to have one model of care because one model will not fit al l participants. The commenter stated that limiting the service delivery model is counter to the purpose of section 1915(k) of the Act and would only serve to perpet uate discrimination against in dividuals who can safely live in their own homes. Response : The commenters provided compelli ng arguments as to why a State should provide more than one service delivery model. However, section 1915(k)(A)(iii) of the Act requires that th e State shall make available home and community-based attendant services and supports “under an agency-provider model or other model....” The use of the word “or” instead of “and” led us to interpret the requirement that States are given a choice of service model to offer. We agree that indivi duals should be given achoice of service model that best meets their needs and we encourage States to elect to provide more than one. However, based upon the statutory language , we do not believe we have the authority to mandate a St ate to offer both service models.
Comment : A few commenters indicated that it is not clear what models would be included in the agency-provider model. In addi tion to requiring States to offer more than one service delivery model, a few commenters also requested the regulation specify the additional delivery models to be provided, suchas traditional agencymodel, agency with choice model and self-direction with a service budget. Response : We would like to clarify that, fo r the purposes of CFC, the agencyprovider model could include both the tradit ional model and the agency with choice model. States using the ag ency-provider model for CFC may choose one or both of these agency options. As noted in the response to comments received in the Definition section, we have modified the definition of agency-p rovider model. Therefore, we have also revised the language at §441.545 to align th is section with the revised definition.
Comment : One commenter believed that mandating all models would not only allow a wider range of eligible individuals the opportunity to access services, but could potentially be of benefit to the growing personal care workforce. The commenter acknowledged the value of self-directed models, but also expressed the belief that it can isolate attendant care providers and offer them little opportunity for a dvancement. If the person they care for passes away or is hosp italized, the attendant care providers have no assurance of continued work. Payment for travel costs and holidays, which is standard in agencies, is almost non-existent for attendant care providers particip ating in self-directed models. Working for an agency may gua rantee continued work, ongoing professional training or support, and recourse for addressing employment problems.Response : We appreciate the commenter’s pers pective, and as stated earlier, encourage States to offer more than one service delivery model. However, we do not believe the statute mandates th e provision of more than one service delivery model. Additionally, the scope of this regulati on does not extend to address advancement opportunities and the examples of employees benefits the commenter provided.
Comment : One commenter stated that attendant services and supports should be available to individuals wh ether or not the individual fully manages them. The commenter requested that we use the term“consumer controlled” instead of “selfdirected” when talking about the agency-provider model. Response : We agree that individuals should exercise the level of control they want to, and we believe the self-directi on philosophy supports this flexibility. As indicated above, we have modified the defini tion of “agency-provider model” to remove the term “self-directed”, to avoid confusion.
Comment : One commenter requested that we clarify how an agency-provider model can legally provide participants with “hiring and firing author ity” of personal care attendants, if attendant care providers are employees of the agency. Another commenter requested we clarify the definition of agen cy model within the context of consumer direction. Response : We would like to clarify that th e hiring and firing authority in the agency-provider model grants individuals th e choice of who will provide services to them. When an individual chooses to not co ntinue to use a attendant care provider (that is, “fire” the attendant care provider), the attendant care provider is still employed by the agency and is available to provide services to someone else. As indicated in an earlier response we have replaced references to “h ire” and “fire” with “select” and “dismiss”.Comment : One commenter wanted to know if an individual’s representative assisting the individual to self -direct and manage their services can be paid as part of the service plan. Response : The assistance provided to a participant by anauthorized representative is not considered a CFC servi ce, and therefore, ther e is no reimbursement available through CFC.
Comment : One commenter indicated that th e services availa ble through the CFC program are provided in most States as adult day, home care and PACE, under different authorities such as sections 1915(c), 1915(b) , 1115, 1915(i), and 1905(a) of the Act. The commenter recommended the regulation be amended to allow these providers to participate in the CFC program. One comm enter suggested that the final regulation indicate that voluntary part icipation by PACE programs as a provider under CFC is allowed under the agency model or under another model established by the State. Response : We do not agree the regulation should specify the various provider types that may be allowed to provide CFC se rvices. The State determines the provider qualifications for providers to provide CFC serv ices under the agency pr ovider model. If the provider types listed meet the State’s qua lifications, and the provi ders are willing to provide the service, they may do so.
Comment : We received many comments reques ting clarification on the level of control individuals have unde r the agency service model. One commenter indicated the regulatory language pertaining to the agen cy service delivery model is ambiguous. Section 441.545(a)(2) provided that under th e agency model for CFC, individuals maintain the ability to hire and fire the providers of their choice. The commenter indicated that this can be read to mean i ndividuals under this mode l only have the abilityto hire and fire providers and do not have maximum contro l over service delivery, as required by the statute in section 1915(k )(6)(B) of the Act. The commenter recommended that this regulation be ame nded to make the language in §441.550, relating to the authority of the indi vidual to control service de livery, compliant with their interpretation of the statute. Response : We do not agree with the commente r. When services are provided under the agency-provider model, individuals have maximum control within that service delivery model to select and dismiss attendan t care providers, provide input as to the provision of services, and the type of assist ance the attendant care pr ovider provides. The individual also retain s the right to train attendant care providers to perform the needed assistance in a manner that comports with the individual’s personal, cultural, or religious preferences.
Comment : A few commenters requested that the regulation require that under the agency model, the individual maintain the abil ity to do the following: select providers of their choice for services identi fied in their person-centered service plan, train, supervise, schedule, determine duties, fire their attendants, manage thei r providers and control, to the maximum extent possible, the services id entified in their person-centered service plan. Response : We believe the regulations include these requirements.
Comment : One commenter indicated that it is not cl ear if “provider” means agent, attendant or something else. Response : For purposes of CFC, provider means any individual or entity providing a CFC service and/or support.Comment : One commenter indicated that the statute calls for “consumercontrolled” services, regardless of the mode l utilized. The methods for adhering to this philosophy are clear with the self-directed model, but less clear within the agencyprovider model. Response : We would like to clarify that the agency-provider model (which States could choose to implement through a traditional agency mo del and/or an agency-withchoice model) also adheres to the philos ophy of “consumer-controlled.” Under this model, individuals retain the ability to sele ct, dismiss, and manage their attendant care provider.
Comment : A few commenters recommended thatthe rule ensure that the scope and authority it provides for the consumer’s “hiring and firing” of the attendant care provider are complementary, appropriate and in sync with the agency’s business and employment model, all appli cable agency regulations, and basic employee protections. The regulation should include a clear delineati on of the roles and re sponsibilities of the consumer and the agency under this model. Response : We do not believe it is necessary to include such specificity in the regulation, as it will vary by service deliv ery model and should be developed by the State. We believe there are sufficient requirements in the regulation to ensure all parties understand their basic roles and re sponsibilities. We also re affirm that the individual’s ability to “fire” their attenda nt care provider in no wa y affects the attendant care provider’s employment status with the agen cy. We reiterate that we have replaced references to “hire” and “fire” with “select” and “dismiss.”
Comment : One commenter indicated that the agency service model can “muddy the water” for self-direction. The commenter recommends a consulting system, where anindividual can receive any assistance needed to perform employer du ties, such as hiring, training, and paperwork. Response : We agree with the commenter’s suggestion that individuals receive assistance needed to perform employer duties and believe these protections are included in the Support System section. Therefor e, we have revised the Support System requirements at §441.555 to apply to all indi viduals receiving CFC regardless of the service delivery model. We describe these revisions further in §441.555.
Comment : Many commenters supported the pr ovision in the Person-Centered Service Plan section of CFC that required thatthe Plan “be directly integrated into selfdirection where individual budgets are used”, but noted that it was unc lear why the use of service budgets across all models is not a ssumed, given the language proposed in the section, “Service Budget Requirements” (§441.56 0). The commenters supported the use of service budgets in all models (since sucha process ensures tran sparency and allows participants to have meaningful control ove r their services). The commenters requested that CMS reconsider the proposal for a separa te section, “Service Plan Requirements for Self-Directed Model with Service Budget” (§441.550), as the Pers on-Centered Service Plan section should address the requirement s for assuring true participant direction, regardless of the model chosen. The commenters pointed out that this is consistent with the expectation set forth by the CFC stat ute requiring CFC be “consumer-controlled,” regardless of the models chosen. The commen ters added that while they recognize that basic elements of the person- centered service planmay be implemented differently based on the model, there should be core expecta tions for assuring partic ipant direction across the models, and that models should be chosenbased on appropriateness for the State, not based on presumptions relative to cost a ssociated with fewer or less requirements.Response : Every individual participating in CFC is expected to have a personcentered service plan that is based on an a ssessment of functional need regardless of the service delivery model available in the State. The service plan requirements for the selfdirected model with service budget include the additional requirements that must be met when an individual is directi ng services through this model. We do not agree that service budgets should be a component of every serv ice delivery model, as service budgets are not used in the agency-provider model.
Comment : We received many comments reque sting that the regulation specify the various types of service delivery mode ls that may be included under the “other” category. One commenter requested the regula tions not restrict th e statute’s open-ended “other” category to only those models that feature a service budget component. A few commenters requested the regul ation clarify that a collective bargaining model, which provides consumers the ability to select, direct and dismi ss their own caregiver, while giving States the ability establish work-f orce wide compensation standards is an acceptable “other model.” Many commenters requested the CFC rules be designed so that all States with public authorities can fu lly participate in all aspects of CFC without undermining their successful policy appro aches for expanding and stabilizing the workforce available to these consumers. In particular, the commenters requested that the regulation clarify that compen sation setting and other workforce-related activities by the State be consistent with all allowable service models under CFC. The commenters indicated that difficulties fi nding and retaining quality home care attendant care providers are among the significant impediments to the ex pansion of attendant care programs, and CMS should ensure that the CFC regulation doe s not undermine these State activities but encourages such activities.Response : We do not believe it is necessary to specify in regulation every type of service delivery model that exists, as we do not believe we would be able to capture them all. States wishing to utilize “other m odels”, as defined in §441.505, would need to include a description of the pr oposed service delivery model in their CFC SPA. We will discuss these models with the State, and a dete rmination will be made as to whether it is an appropriate service delivery model for CFC. We are taking this opportunity to add a ne w paragraph (c), to indicate that States have the ability to propose an alternative se rvice delivery model not envisioned in this regulation. Such a model would be descri bed in the State’s CF C SPA, and approved by
CMS.
Comment : One commenter requested the regulation be amended to add a provision that enables States to take on responsibility for building a self-directed workforce sufficient to meet the goals of the program by ensuring adequate compensation for direct care attendant care providers, establishing a consumer workforce for direct care attendant care providers, and implementing da ta systems to monito r the direct care attendant care providers. Response : We do not believe it is within the scope of this regulation to mandate such activities. We believe that States ha ve the ability to implement such requirements and should discuss them with the Development and Implementation Council.
Comment : One commenter is very apprecia tive of the broad language allowing individuals to choose their attendant, es tablish additional cultural competency requirements, and train attendants to their sp ecific cultural competency requirements. The commenter expressed that this flexibility is particularly important to ensuring serviceprovision to Lesbian, Gay, Bise xual and Transgender (LGBT) individuals, especially older LGBT adults and people of color. Response : We appreciate the commenter’s support.
Comment : One commenter requested we clarify whether CMS perceives selfdirection delivery models approved under differe nt Federal authorities to be vulnerable to allegations of inequitable access under provisions of the Americans with Disabilities Act. Response : The Americans with Disabilities Act requires that individuals with disabilities be given the ability to receive their long-term car e services and supports in the most integrated setting appropriate to their n eeds. We believe that Medicaid authorities allowing for self-direction of services and supports do not conflict with this mandate, as self-direction is a service delivery model, and does not prevent the provision of additional services, through Medicaid or other authoriti es, that may be necessary for a State to comply with the Americans with Disabilities Act.
Comment : One commenter requested that th e regulation clarify whether a State may select a self-direction m odel under the authority of sect ion 1915(k) of the Act that differs from the State’s existing self-dir ection delivery models under HCBS 1915(c) waivers. Response : While there are many similar ities between the section 1915(k) authority and the self -direction delivery models under th e section 1915(c) authority, these are separate authorities with different requirements. States may implement different selfdirection models under sections 1915(c) and 1915 (k) of the Act, as long as all program requirements are met.
Comment : One commenter indicated that it is unclear if the direct cash model is intended to be a stand-alone model or an opt ion within the financial management entity.Response : Section 441.545(b)(1) re quires a State to make financial management services available to a ll individuals with a serv ice budget. States can separately choose to allow cash disbursement to indi viduals self-directing CFC serv ices. Individuals using the direct cash option have the choice of using the financial management entity for some or all of the relevant functions.
Comment : One commenter recommended the regulation specify when FFP is drawn down under the direct cash option and how unexpended portions of a cash disbursement should be treated. Response : Cash disbursement is given pr ospectively. States would report expenditures for CFC services on the CM S 64 form based on this prospective disbursement. States may determine how to account for unexpended portions of cash disbursements. Based on past experience, we know that some States recoup unexpended funds; others allow beneficiaries to carry ove r unexpended funds into subsequent months.
Comment : One commenter requested clarific ation on the requirement to comply with Internal Revenue Service rules containe d under each service model. The commenter also requested clarification on how these para graphs relate to the requirements in the State assurance provisions in §441.570. The commenter suggested the regulations be clarified to ensure that the requirements of §441.570 apply to each of the service models listed in §441.545, as required by the statute. Response : While the language pertaining to meeting IRS requirements may seem duplicative, the entity respons ible for ensuring the requirement is met differs depending on the service delivery model used, and whether an indivi dual is utilizing financial management activities. We believe the regul ation is clear that requirements under the State Assurance sections apply to all service delivery models.Comment : We received several comments suppo rting the inclusion of a financial management entity and the specific requirements for the service. Response : We appreciate the commenters’ support.
Comment : One commenter indicated that given the participant direction requirement of CFC, it may be important for CMS to consider whether or not a financial management entity could also be used withinan Agency with Choi ce and other agencyprovider models. The commenter added that the regulation does not provide specificity as to whether the financial management entity would operate on behalf of an individual who would be the employer of his or her attendants, or if a financial management entity could be an Agency with Choice, wherein the agency is the official employer of attendant care providers who provide service to participants. Response : It is unclear how a financial mana gement entity would be utilized in an agency-provider model. However, we w ould be willing to discuss such a proposal with States.
Comment : Two commenters suggested the regulation requi re States to offer more than one choice of financial management entity, and recommended the term “entity” be changed to “entities.” Response : Section 1915(k) of the Act does not provide the authority to require States to provide more than one choice of financial management entity, as this is an administrative function that may be complete d by the State or a vendor organization. However, the statute does not prohibit Stat es from having more than one financial management entity if they choose to. We believe offering more than one entity is congruent with the philosophy of consumer choice and encourage States to consider allowing more than one financial management entity.Comment : One commenter recommended that §441.545(b)(1)(iii) be amended to say “separately track budget funds and e xpenditures for each individual.” The commenter believes this revision is necessarybecause States may interpret “separate account” to mean “separate bank account” wh ich is an overly complex, costly and unnecessary approach to mana ging an individual budget. Response : The intent of this provision is to eliminate the possibility of commingling of individuals’ budget funds. We have revised the rule to incorporate the suggested language and also added the require ment for the financial management entity (FME) to separately maintain budget funds. Additionally, we have revised paragraph (b)(vi) to clarify that the FME is required to provide periodic reports of expenditures to the individual and State.
Comment : One commenter suggested revi sing §441.545(b)(2)(I) to also require filing and reporting FICA, FUTA and State unemployment taxes. Response : We believe the regulation alrea dy specifies these functions, as we interpret “compliance with” to encompass filing and reporting. However, we are taking this opportunity to add “and State employmentand taxation authoriti es” after requiring compliance with all applicable requirements of the IRS.
Comment : One commenter recommended that communications between the FME and the individual occur at least monthly. Response : We believe the frequency of communication between the FME and the individual should be established by the State and should be based upon the level of assistance needed and provided.Comment : One commenter wanted clarificati on as to whether the cost of the FME is considered a service cost rather thanan administrative cost . The commenter also wanted to know if this service may be in cluded in an individual’s service budget. Response : Consistent with other authori ties including services provided by a financial management entity, this is consider ed an administrative function and may not be included in the individual service budget.
Comment : One commenter suggested the re gulation should recognize fiscal intermediaries and include language that those entities that have beenapproved to serve a similar role under a State program should be automatically approved or allowed a streamlined approval process to provi de similar services under CFC. Response : Section 441.545 sets forth the mi nimum mandatory functions that must be performed by the FME. We rec ognize that States may interpret “fiscal intermediaries” differently. Additionally, we do not believe that fiscal intermediaries are synonymous with fiscal management activitie s. Therefore, we do not believe it is appropriate to list fiscal intermediaries in the regulation; however, we note they could provide the functions set forth in §44 1.545, as determined by the State.
Comment : One commenter recommended the regulation clarify whether FME activities must be provided if a State does not elect to offer direct cash, vouchers, or permissible purchases. Response : Section 441.545(b)(1) re quires a State to make financial management activities available to all indi viduals with a servic e budget, including when the direct cash option is used. We are modifying paragraph (b )(3) to clarify that the requirements at §441.545(b)(2)(i) through (iv) al so apply to vouchers. Accordingly, we are removing “If the cash option is the only model offered by the State for Community First Choice” and“services under the cash option” fr om paragraph (b)(2)(iv) as we want to be clear that this provision applies to both dire ct cash and vouchers. Stat es only implementing CFC through an agency-provider model would not need to provide FME activities.
Comment : One commenter recommended that a financial management entity be available for all self-directed model options. In such cases, the ro le of the financial management entity within each of the models would need to be clarified. Response : Section 441.545(b)(1) re quires a State to make financial management activities available to all indi viduals with a servic e budget. States can separately choose to allow cash disbursement or vouchers to individuals self-directing CFC services. Individuals using the direct cash option have the choice of using the financial management entity for some or all of th e relevant functions. We believe these requirements ensure sufficient access to financial management entities.
Comment : One commenter stated that e ducation on the res ponsibilities of managing cash when an FME is not used is key. Specifically, Stat es and individuals should be educated on the risks associated wi th not using a financial management entity and the consequences of mi smanaging the duties required. Response : We agree with the commenter and believe the requirements under §441.555, Support System, will provide individu als with the necessary education.
Comment : One commenter recommended the regulatory citations for service models be reorganized so th at all the information pertin ent to the agency model is together and the self-direction requirements are all together. Response : As indicated earlier, we have revised the S upport System language at §441.555 to indicate that it app lies to all service delivery models. We believe this addresses this commenter’s suggestion.Upon consideration of public comments received, we are finalizing §441.545 with revision, revising paragraph (a) to refer to the “agency-provider model”, amending paragraph (a)(1) to align withthe revised agency-provide r model definition, amending paragraph (b)(1)(iii) to say “separately track budget funds and expenditures for each individual”, amending paragraph (b)(1)(vi) to require the FME to provide periodic reports of expenditures to the individua l and to the State, amending paragraph (b)(2)(i) to specify compliance with State employment and taxation authorities, removing “If cash option is the only model offered by the State for Comm unity First Choice” and “services under the cash option” from (b)(2)(iv), modifying para graph (b)(3) to make the requirements at §441.545 (b)(2)(i) through (iv) apply to vouche rs, and adding a new paragraph (c) to permit States to propose othe r service delivery models. L. Service Plan Requirements for Self-d irected Model with Service Budget (§441.550) We proposed that the self-d irected service plan require ments convey authority to the individual to recruit, hire (including specifying attendant care provider qualifications), fire, supervise, and manage attendant care pr oviders in the provision of CFC services and supports. In addition, we proposed that the service plan describe the ability of the individual to determine the amount paid for a service, support, or item, as well as the ability to review and ap prove provider invoices.
Comment : Many commenters offered general support of the self -direction model with service budget. The commenters believe the intent of this section is to give people maximum control over their services, recognizing that giving individu als the authority to manage their service provider is integral for self direction. Response : We appreciate the commenters’ support.Comment : One commenter requested more specificity regarding the requirement for individuals to evaluate an attendant care provider’s pe rformance found at §441.550(d)(4). Specifically, the commenter sugge sts that we explain the purpose of the evaluation, who will deliver and receive the eval uations, and what actions are to be taken in response to the evaluations. This commen ter also questioned whether evaluations are required if the recipient is the spouse of the provider, or a mi nor with a parent provider. Alternatively, one commenter offered support of the evaluation requirement, but requested the rule not allow States to impose formal or standard evaluation processes. The commenter believes that the method for evaluation should be the decision of the employer. Response : Individuals receiving services under the self-directed model with service budget have the ability to superv ise and manage attendant care providers providing services to them. We expect indivi duals to evaluate the quality and adequacy of services the attendant care provider provides as part of their supervision responsibilities. We do not expect that the ev aluation has to be a form al process, nor is it the responsibility of the Stat e to impose a standard evalua tion process. The purpose of the evaluation is to provide the individual with the opportunity to provide feedback to the attendant care provider with re gard to the provision of serv ices. When the individual has a representative, the representative would be expected to conduct the evaluation.
Comment : Many commenters expressed support of the self-directe d service plan requirements. The commenters believe the requ irements are essential to meaningful selfdirected models of care and encourage th eir inclusion in the final regulation. Response : We appreciate the commenter’s support.Comment : One commenter requested we clarif y whether the State is allowed to set parameters or limits on any of the following: annual service budget amount, the number of paid attendant car e hours received from any single family member within a time period (per week, month, etc), or minimum wages. Response : CFC is an optional State plan serv ice. As such, States may set limits on the amount duration and scope of CFC benef its, as long these limits comply with the CFC specific requirements set forth in statute and regulation. We will be reviewing all State proposals to implement CFC under the Stat e plan. Our review includes a review of any proposed limitations.
Comment : Many commenters expressed concer n with individuals determining the amount to pay for a service, support, or item. Many commenters indicated that States should be allowed to establish reimburseme nt rates and methodologies including the use of collective bargaining as a way to establish consistent reimbursement rates for services and supports, while still allowing the indivi dual to determine the amount, duration, and scope of the services provided. One commenter recommended the regulation be amended to specify that when an individua l is determining the amount to pay for a service, support or item, the in dividual’s decision should be consistent with existing State laws and regulations governing compensation standards. Another commenter indicated that while individuals should appropriately review invoices, requiri ng that individuals determine payment for attendant services ( hourly rate or wages) is not a necessary component of self-direction and could undermin e States’ efforts to build their long-term services attendant workfo rce through regulating co mpensation standards for attendants/direct care attendant care pr oviders. Another commenter requests theelimination of the requirement that individua ls in a self-directed model with service budget determine the amount paid for a service, support, or item. Response : We understand the concern expr essed by these commenters. The intent of CFC is to provide individuals with the opportunityto maximize their independence and control of the home and community-based attendant services and supports. An integral component of the self -directed model with service budget is the ability of the individual to determine the amount paid for services. However, this flexibility should not conflict with responsib ilities for setting compensation according to State and Federal requirements. Therefore, we are modifying §440.550(e) to specify that determining the amount to pay for services should be “in accord ance with State and Federal compensation requirements”.
Comment: One commenter expressed concern re lated to the requirement that “the budget methodology include calculations of the expected costs of CFC services and supports if those services and supports were not self-directed.” The commenter believes States will find this provision challenging si nce it asks them to compare two separate models that are not necessari ly directly comparable. Response : We do not agree with the commente r. We expect the State to obtain this information based on an analysis of hist orical costs and utiliz ation and other factors that are likely to affect costs.
Comment : One commenter requested that we provide clarification around budgeting requirements, specifically whethe r individual budgeting is required. Response : The service budgeting requirements are used when individuals are receiving services under the self-directed model with a service budget. The budget isdeveloped based on an individual’s assessmen t of functional need and the services specified in the person-centered service plan.
Comment : The commenter indicated that the proposed rule gives the appearance that the self-directed model is more cos tly and onerous to implement than agencyprovider models. Response : CMS encourages States to avail themselves of a variety of service models to implement CFC. We acknowledge that agency-provider models are more straightforward to implement, and likely ar e already in existence in most States. However, we fully recognize the merits of self-directed service models, and will work with any State interested in adopting a self-directed service model for CFC.
Comment : One commenter recommended that th e rule be revised to add language stating that the attendant care provider’s duties are identified in the approved self-directed service plan and within the scope of CFC services. Response : It is the person-centered servic e plan, required for each individual receiving CFC services and supports, regardle ss of service delivery model, that would convey the duties of the attendant care provide r in accordance with the scope of CFC. We do not believe that it is necessary to amend this section of the rule to additionally make these points.
Comment : One commenter stated that withregard to “reviewing and approving provider invoices or timesheets” attendant care providers must utili ze timesheets per the Fair Labor Standards Act (rather than i nvoices). The commenter recommended revising the rule to say “Reviewing and a pproving provider payment requests.” Response : We agree with the commenter and have revised the rule at §441.550(f) to say “reviewing and approving provider payment requests.”Upon consideration of th e public comments receive d, we are finalizing §441.550 with revision, modifying para graph (e) to specify that de termining the amount paid for services should be “in accordance with St ate and Federal compensation requirements”, modifying paragraph (f) to specify “reviewing and approving provider payment requests.” As noted in the response to comm ents received in the Definitions section, we modified paragraphs (a) and (b) to us e the terms “dismiss” and “select.” M. Support System (§441.555) Based on our experience with self-direct ion programs, we are aware that the support system provided by the State is a critic al element of the service delivery model. Therefore, to maintain consistency and to re flect our policy relating to self-direction, in §441.555 we proposed the requirement that the State have in place a support system to facilitate successful self-direction by the indi vidual. While we did not prescribe the way States are to design their suppor t system, to allow flexibility, based on our experience, we included a minimum list of activities for which individuals may need information, counseling, training, or assistance, but States may offer additional activities. Generally, the activities requiring support include participant rights information and how the selfdirected model of service delivery operates.
Comment : We received several comments providing overall support for the requirements set forth at §451.555. One commente r strongly endorsed this section as a critical component to ensuring consum ers achieve maximum independence. Response : We appreciate the commenters’ support.
Comment : A few commenters suggested that we extend paragraph (b)(1) to require communication in a linguistically a nd culturally appropriate manner, with accommodations for all functional limitations, incl uding the need for alternative formats.Response : For a State to comply with this re quirement, it is an expectation that the State will assure that information is provided to individuals in a manner that is culturally sensitive and at a level most appropriate for the individual to understand the information. This includes translator se rvices as needed fo r non-English speaking participants and interpreter services and accommodations for individuals with sight or hearing impairments. We agree with the commenter’s recommendation and have revised paragraph (b)(1) to include the following langua ge: “To ensure that the information is communicated in an accessible manner, info rmation should be communicated in plain language and needed auxiliary aids a nd services should be provided.”
Comment : One commenter requested that we provide guidance on all conditions that are required for person-centered planning with a service budget to better determine the cost of participating. Response : The requirements for person-centered planning ar e the same regardless of the service delivery model and ar e described at §441.540. Additionally, the requirements set forth at §441.560 must be met for individuals receiv ing services through the self-directed model w ith a service budget.
Comment : One commenter indicated that, wi th regard to risk management agreements required under paragraph §441.555 (b)(2 )(xi), the regulation does not address whether criminal history record checks ar e permitted to help mitigate risk. The commenter questioned whether record or background checks would be allowed if the participant recruits, hires, trains and fi res attendant care providers. The commenter requested CMS to clarify whether States are required to allow participants to hire someone who presents a risk of harm.Response : Following the practice of other pr ograms offering self-direction, we believe that criminal background checks of atte ndants should be left to the discretion of the States. However, we agree that this expectation was not clear in the proposed regulation. While we will not prescribe the tools or instruments States should use when developing risk management agreements, we are revising §441.555 to require States to specify any tools or instrument it uses to mitig ate identified risks. In this section, we further add that if States make criminal or background checks a requirement, States would bear the expense of the background ch ecks it performs on beha lf of individuals participating in CFC. Additionally, we believe thatthe individual must retainthe authority to decide who to hire to provide personal attendant serv ices, as this decision is inherent in selfdirection, as long as the choice adheres to section 1903(i) of the Act that Medicaid payment shall not be made for items or serv ices furnished by individuals or entities excluded from participating in the Medicaid Program.
Comment : One commenter requested that we consider giving States the option to make self-directed training mandatory to ensure that individuals have mastered the skills needed to manage the service budget. Response : We do not agree with the comm enter. Section 441.555(b) requires States to provide or arrange for the provi sion of appropriate information, counseling, training and assistance to ensure that an individual is able to manage the services and budget. These supports are to be available to the individual on a c ontinuous basis until such time as it has been demonstrated th at after additional counseling, information,training or assistance the individual cannot effectiv ely manage self-direction responsibilities. Furthermore, §451.555(b)(2)(v) requires ther e to be a discussion about the risks and responsibilities of self-dir ection. We believe these prot ections are sufficient to facilitate successful provisi on of services and supports vi a a self-directed model with service budget.
Comment : One commenter asked if the ent ity providing the support system could also be the financial management entity. Response : Such an arrangement would be appr opriate, as long as the conflict of interest protections originally proposed in §441.540(c)(4)(iv), and nowrelocated to this section, are met.
Comment : One commenter requested clarific ation as to whether the State’s obligation is limited to providing information about existing advocacy systems or if there is an expectation that States actively investin fostering development of advocacy systems for the CFC option. Response : It is an expectation that Stat es would provide information about existing advocacy systems. We are not mandating the establishment of additional systems specific to the CFC program.
Comment : One commenter recommends that paragraph (b)(2)(vii) be revised as “Individual rights, incl uding appeal rights.” Response : We agree with the commenter and have revised the rule at §441.555(b)(2)(vii) to say “i ndividual rights, includi ng appeal rights.”
Comment : One commenter expressed con cern that the regulatory language requiring States to provide assi stance to define goals, need s and preferences in paragraph(b)(2)(ix) exceeds current program limits and could overpower existing systems. The commenter recommends States have the ability to define this within current program abilities and limits. Response : We do not agree with the commenter that States be given the ability to define support activities within the States’ current program abilities. While similar to existing authorities, CFC is not the same. We are clarifying that this requirement relates to the provision of CFC. Therefore we have revised the rule at §441.555(b)(2)(ix) to say “Defining goals, needs and preferences of Community First Choice services and supports.”
Comment : Several commenters expressed concern that the regulation only applies supports to the self -directed model population. The commenters indicated that some of these supports may also be relevant and important to indivi duals participating in the agency model. The commenter r ecommends extending the relevant support requirements to that population. Response : We recognize that although pa rticipants may not control an individualized budget in the agency-provider model, participants may manage their services to the maximum extent possible. We agree with the commenters that the supports provided under this section apply to a ll service delivery models, not just the selfdirection model with a service budget. Therefore, we have revised the rule to include language that applies this requirementto all service de livery models.
Comment : We received many comments sugge sting States be encouraged to develop attendant care provide r registries as part of th e additional activities they undertake to support a self-d irected model of service delivery. A few commenters expressed concern that indi viduals who do not choose to receive services through anagency may have difficulty locating direct-car e attendant care provide rs outside of their immediate network of family members and c ontacts. The commenters indicated that a “matching service registry" is a labor mark et intermediary that creates a dynamic platform for matching supply and demand by a llowing individuals to tap into an up-todate bank of available attendant care providers. The comment ers also indicated that the attendant care providers can also alert participants of their availability for employment. These commenters recommended the regulatory language be revised to require States to establish a labor market intermediary such as a matching service registry to assist participants with identifying and accessing independent providers. Response : We believe States should have th e flexibility to design a system that would best address workforce issues and ensure access to providers in their States. We support State activity to implement systems th at will improve an individual’s access to attendants. However we believe it is beyond th e scope of the regulation to mandate that States implement attendant care provider registries.
Comment : A few commenters suggest we a dd “peer supports” to the list of included support activiti es. Another commenter suggested that the regulation promote the use of local, peer-based and consumer controlled providers so beneficiaries have maximum access to their fiscal agent. Response : We do not agree with the commen ters that “peer support” services should be added to the list of support activities. For purpos es of Medicaid, peer support services are an evidence-based mental health model of care that as sists individuals with their recovery from mental illness and substa nce use disorders. We recognize that peer support is provided by specially trained individuals who are in recovery from mentalillness and/or substance use services. As suc h, we believe it would create confusion to include “peer supports” as a CFC service. Recognizing that individu als with experience in u tilizing personal attendant services and supports could provide valuable assistance to individua ls who desire to do the same, States could utilize individuals who we re or are receiving such services in the implementation of the activities re quired under the Support System.
Comment : One commenter recommends deletin g paragraph (b)(2)(xi), pertaining to risk management agreements. The commenter compares such agreements to managed risk agreements in assisted living facilities th at are inappropriate and illegal to the extent that they purport to release a service provide r from liability. Th e commenter indicated consumer law invalidates any agreement thatwould absolve a personal care provider from responsibility for his or her actions. Response : We disagree with the commenter , as we do not believe the risk management agreement requirement absolves personal care providers from responsibility for his or her actions. We believe the purpose of the risk management agreement is to identify the risks that an individual is w illing and able to assume, and the plan for how identified risks will be mitigated. The State must ensure that the risk management agreement is the result of discussion and negotiation among persons providing the support system functions, the individual, and others from whom the individual may seek guidance. This is a requirement unde r the person-centered service plan.
Comment : One commenter suggested that the regulation be revised at §441.555(b)(2)(vi) to state “The ability to freely choose from available home and community-based attendant providers, serv ice delivery models and (if applicable) financial management entities.”Response : We agree with the commenter, but must acknowledge that States have the choice of how many service delivery models to provide. Therefore we have revised §441.555(b)(2)(vi) to state “the ability to freely choose from available home and community-based attendant providers, avai lable service delivery models and if applicable, financial management entities.”
Comment : One commenter requested that we clarify the vision for ensuring development of a conflict free support system, as alluded to in the preamble, in the service plan discussion. The commenter indicated the propos ed rule contains no such language or guidance. Response : The conflict free support system discussed in the preamble is operationalized by a State’s adherence to th e language proposed in§441.540(c)(4), which has now been relocated to this section.
Comment : One commenter indicated that to avoid conflict with standard language referring to contracts, the word “plan” should be substituted for the word “agreement” in paragraph (b)(2)(xi) : development of risk plans. Response : We do not agree with the commen ter’s suggestion. We believe the use of the term “agreement” most accurately refl ects that these strategies are the result of discussion and negotiation required under th e person-centered pl an development.
Comment : One commenter requested that th e regulation include support system workforce competencies. Response : We disagree with this suggestion, as we believe States should have the flexibility to determine the qualifications of the entities conduc ting the assessment of functional need and developing the person- centered service plan, provided all requirements of this regulation are met.Comment : One commenter indicated that individuals may need ongoing education and guidance from the self-direction support system. Response : We agree with the commenter, and believe that this ongoing support is provided for. Upon consideration of th e public comments receive d, we are finalizing §441.555 with the following revisions:

● We are revising paragraph (b)(1) to include the following language: “To ensure that the information is communicated in an accessible manner, information should be communicated in plain language and needed auxiliary aids and services should be provided.”

● We are adding a requirement at paragr aph (b)(2)(xi) that States specify any tools or instruments it uses to mitigate identified risks, and adding that if States make criminal or background checks a requirement, States would bear the expense of the background checks it performs on behalf of individuals participating in CFC;

● We are revising paragraph(b)(2)(vii) to include “individua l rights, including appeal rights”;

● We are revising paragraph (b)(2)(ix) to state “Defini ng goals, needs and preferences of CFC services”;

● We are revising the introduction to include language that applies this requirement to all service delivery models;

● We are revising paragraph (b)(2)(vi) to state “the ability to freely choose from available home and community-based attend ant providers, available service delivery models and if applicable, financial management entities.”● We are adding a paragraph (c) to inco rporate conflict of interest language proposed in §441.540(c)(4). N. Service Budget Requirements (§441.560) We proposed to require that a servic e budget be developed and approved by the State and include specific items such as th e specific dollar amount, how the individual is informed of the amount, and the procedures fo r how the individual may adjust the budget. We proposed that the budget methodology set fo rth by the State meet certain criteria, such as being objective and evidence based, be applied consistently to individuals in the program, and be included in the State plan. In addition, we proposed the budget methodology include calculations of the expected costs of CFC services and supports if those services and supports we re not self-dir ected. We proposed that States could place monetary or budgetary limits on self-directed CFC services and that if a State chose to do so, we proposed to require that the State have a process in place that describes the limits and the basis for the limits, any adjustments that will be allowed, and the basis for the adjustments, such as an individual’s health and welfare. We proposed to require certain beneficiary safeguards in light of these possible limitations.
Comment : Many commenters offered their support for this requirement. Response : We appreciate the commenters’ support.
Comment : One commenter requested clar ification around CMS’ intent for anticipated safeguards, and whether it is limited to circumstances in which an individual’s needs change. Response : Our experience with self-directi on indicated that at a minimum, a certain level of oversight by the State is necessa ry to help flag potential issues with the provision of services. We believe it is importa nt that States have a system to oversee theexpenditures being made by individuals self-dir ecting their care. Premature depletion of the funds in a service budget c ould signal a health cr isis which would require the State to immediately determine the health status of an individual and construct a new assessment. It could also signal misuse of funds, for wh ich the State would need to take corrective action. Although there are ge neral safeguard requiremen ts outlined in the Support System section, the safeguard requirements in §441.560 pertain specifically to resolving issues when the budgeted service amount is insufficient to meet the individual’s needs.
Comment : One commenter requested more guidance in the regulation on the procedures the State must have in place to provide safeguards when the budgeted service amount is insufficient to meet the individual’s needs. Response : We appreciate the commenters’ suggestions; however the specific safeguards are determined by the State. We will review the State’s proposed safeguards during the review of their State plan am endment submitted to implement CFC.
Comment : One commenter suggested that th e rule should require the State to explain and provide in writing the criteria used for determin ing an individual’s service budget amount when the individual receiv es the final writte n service plan. Response : Section 441.560(a)(2) re quires the State to specify procedures for informing an individual of th e amount of the service budget before the service plan is finalized. Additionally, paragraph (d) require s the State to have a method of notifying individuals of the amount of any limit that applies to CFC services and supports. To ensure individuals receive information in a manner in which they understand, we have revised §441.560(d) to include the following la nguage: “Notice must be communicated in an accessible format, communicated in plain language, and needed auxiliary aids and services should be provided.”Comment : One commenter wanted to know if a State must adhere to the required elements at §441.560(a)(1), (a)(2), (a)(3)(i) and (a)(5) if the Stat e does not elect to provide transition costs, direct cash, vouchers or permissible purchases. Response : Any State allowing self-direction w ith a service budget must adhere to all requirements of the final re gulation. To clarify the requirements as they relate to permissible services and supports, we are ta king this opportunity to revise paragraph (a)(5) inserting “other permissible services and supports as defined at §441.520(b)” after “transition costs” and removing the remaining language.
Comment : We received several comments reque sting clarification with regard to a State’s flexibility to establish service limits on the serv ice budget. One commenter believes strongly that States should be allowed the flexibility to institute caps on hours of services in this section, especi ally in times of fiscal crisis or uncertainty. The commenter also believes States should notbe required to provide all se rvices relating to all needs identified through the needs assessment process as there are limited [financial] resources. Another commenter requested the regulation explicitly say if a State may set a per person service budget limit for th e self-directed model. Response : CFC is an optional State plan service and States have the flexibility to determine the amount, duration, and scope of the program, within the confines of statutory requirements. We provide clarification under the assessment of functional need section that although the assessment will identif y all needs an individual has, the CFC program will only be responsible for the provis ion of services available under CFC. We believe it is necessary and appropriate for the individual to be referre d to other Medicaid and non-Medicaid programs the individual may be eligible for, that will address the needs identified that are not available under CFC.Comment : One commenter requested the provision of guidance to States on ensuring that when a budget is capped, there ar e methods to modify the budget allotment, especially in emergency situations. Response : Section 441.560(b)(5) an d (c) require States to have procedures to adjust limitations placed on CFC services a nd procedures to provide safeguards to individuals when the budgeted amount is insuffi cient to meet the individual’s needs. These provisions allow States to modify the budget allotments in em ergency situations.
Comment : One commenter recommends the regulation include appropriate safeguards to ensure that budgets are not arb itrarily reduced for an individual’s selfdirected services. Another commenter indicated it is not clear what “safeguards” are considered acceptable when the budgeted serv ices amount is insufficient to meet the individual’s needs. The service budget re quirements should explicitly address what adjustments may be made, for example when the individual is at risk of an institutional placement because of budget limits. Anothe r commenter indicated that individuals should be well-informed of the appeal proce ss if they believe thata service budget cannot adequately meet their needs. Response : Section 441.560(c) requires the State to have procedures in place that will provide safeguards to individuals when th e budgeted service amount is insufficient to meet the individual’s needs. The Support System set forth in §441.555 requires individuals be informed of th e process for changing the person-centered service plan. An individual is supposed to sign their plan only if they agree with it. If the individual does not agree with the service budget, it should be addressed at this time. Additionally, there are requirements for individuals to file an appeal, and as always, the standard Medicaid fair hearing appeal rights exist fo r individuals recei ving CFC services.Comment : One commenter indicated that th e regulation should require that appeals be handled by entities not responsible for conducting the assessment or providing case management services. Response : We agree appeals should be ha ndled by an independent entity. Reconsiderations may be handled by the in dividuals responsible for conducting an assessment and facilitating the person-centered pl an of care. However, if an individual is not satisfied with the service plan devel oped, including the amount of hours identified on the plan, an individual has the right to file an appeal. The individuals should file an appeal following the State’s appeal process.
Comment : One commenter requested the rule clarify the applicability of “evidence based” to a service budget alloca tion methodology, as referenced in paragraph (b)(1). Additionally, th e commenter requests cl arification as to whether the “cost data” invokes a relationship to histor ical Medicaid rates and corr esponding expenditure costs, or if it CMS’ expectation that “cost” is re lated to audited costs for providing services unrelated to historical reimbursement rates. Response : By this, we mean that the method used by the State is based on an analysis of historical costs and utilization and other f actors that are likely to affect costs.
Comment : One commenter requested that CMS clarify the test against which we will measure service budget allocation methodology to dete rmine approval. This commenter asked if there is an expectation of actuarial soundness or some other rate setting standard against whic h the methodology will be judged. Response : Verification of actuarial soundness will not be required. States are expected to provide a descri ption of the methodology used to determine the individual’s service budget amount. The methodology must ta ke into account the co st of services ifthey were not self-directed. We would like to further clarify that we use the term “cost” to mean what it will cost the beneficiary to purchase the services, at either the fee-forservice rate or a beneficiary negotiated rate . We recognize the conf usion the use of the terms “allocation” and “cost” in §441.560(b)(1) have created, and therefore, we have revised the rule to remove the terms. A dditionally, we have revised this section to remove redundant language.
Comment : One commenter requested clarificat ion as to whether a State may set participation parameters, such that individuals may be prohibited from participating if the individual’s choices ar ound wage limits result in the se rvice budget being insufficient to cover the assessed needs. Response : Section 441.545(b)(2)(i ii) requires that Stat es make available a financial management entity to an individual who has demonstrated, after additional counseling information, traini ng or assistance, that the individual cannot effectively manage the responsibilities of receiving a cash payment.
Comment : A few commenters noted an in correct regulatory citation for the Medicaid fair hearing process. Response : We have revised the rule to make this technical correction.
Comment : A few commenters suggested the regulation be revised at paragraph (b)(1) to require individuals to follow a compensation standard developed by the State under §441.570. The commenters believe the States should include labor market data in their methodology for developing a participant service budget as a basis for setting adequate compensation standards for direct care services to support recruiting and retaining qualified providers.Response : We do not agree with the comm enter’s suggestion because it would not support the requirement at §441.550(e) granting individuals the authority to determine the amount paid for a service, support, or item.
Comment : Several commenters expressed support for the requirement §441.560(e) that the service budget not restrict access to othe r medically necessary care and services furnished under the State plan. Response : We appreciate the commenter’s support.
Comment : One commenter requested that th e service budget cr iterion be clear regarding what is permitted and prohibited. With regard to what is permitted, flexibility due to changing needs, priorities, or goals needs to be recognized. Response : States must ensure the method of determining the budget allocation is objective and evidence based utilizing valid and reliable cost data . Additionally, the regulation requires that States have a pr ocess for adjusting any limits placed on the provision of CFC services.
Comment : One commenter indicated that sa feguards for individuals to address budgeted amounts insufficient to meet consumer needs must be robust and timely. Response : We agree with the commenter and will review the description of the State’s safeguards through the State plan amendment process.
Comment : One commenter requests the regulation clarify if a State may set selfdirected budgets at a level which assures that those using the self-d irected service option will not exceed the amount of funding which would be spent under an agency-directed mode. The commenter indicated the necessity for fiscal neutrality, indicating that selfdirected services in the Stat e has led to budgets being reduce d by a specific percentage to account for the fact that flexibility is likelyto mean a person uses more of the fundingallowed to care for them during the year. The commenter urges th at any reductions or discounts be based on data a nd a transparent methodology. Response : States determine the methodol ogy through which the service budgets are developed. As required in paragraph (b )(1), this methodology must be objective and evidence-based, using valid, reliable cost data.
Comment : One commenter recommends revising paragraph (a)(3)(i) to indicate that “the procedure for an individual to freely adjust amounts allocated to specific services and supports within the approved service budget.” Response : We acknowledge the clarity this revision brings, and are revising the regulation to incorporate it.
Comment : One commenter recommends health and safety be added to paragraph (c). Response : We do not believe that such a clar ification is necessary, as the term “safeguards” is sufficiently broad to en compass health and safety protections. Upon consideration of public comments received, we are finalizing §441.560 with revision to paragraph (a)(5) inserting “other permissible services and supports as defined at §441.520(b)” after “transition costs” and removing the remaining language, correcting the citation of the fair hearings proce ss in paragraph (a)(6), incorporating the commenter’s suggested revision to paragraph (a)(3)(i), removing the terms “allocation” and “cost” from paragraph (b)(1), revising pa ragraph (d) to insert ing “Notice must be communicated in an accessible format, co mmunicated in plain language, and needed auxiliary aids and services should be provided” and removi ng redundant language. O. Provider Qualifications (§441.565)We proposed to require that States provi de assurances that necessary safeguards have been taken to protect the health and welf are of CFC recipients. States must define qualifications for providers of attendant services and supports under the agency-provider model. We proposed that an individual has the option to permit family members, or any other individuals to provide CF C services and supports identif ied in service plan as long as they meet the qualifications to provide su ch services and supports. We also proposed that individuals retain the right to train their attendant care providers in the specific areas of attendant services and supports needed by the individual, and th at individuals also retain the right to establish additional st aff qualifications based on their needs and preferences.
Comment : One commenter supported the requirement that States take necessary safeguards to protect the “health and welfare” of enrollees. Response : We recognize that the protecti on of health and safety requires program-wide consideration and oversight; we are therefore taking th is opportunity to move this assurance from the Provider Qualif ications section to the State Assurances section. Additionally, we are adding language to the State Assurance section to make it clear that this includes assuring the State’s adherence to se ction 1903(i)(2) of the Act that Medicaid payment shall not be made for items or services furnished by individuals or entities excluded from participating in the Medicaid Program.
Comment : One commenter expressed concer n that the regulatory language at §441.565(c) does not state the statutory require ment that services be provided by an individual who is qualified. The comment er recommended the regulatory language be revised to explicitly state this.Response : The requirements at §441.565(b) requiring the development of provider qualifications includes the requirement that providers must be qualified. Therefore, we are not revi sing the regulatory language to explicitly state this.
Comment : One commenter requested that we define the term “qualified.” A few commenters requested that the regulation go be yond requiring States to define provider qualifications, by also establishing core quali fications for States to build around. The commenters believe the core qualifications s hould be applied uniformly to home care agencies, as well as the self-directed m odel with service budget. The commenters indicated that at a minimum, attendant care providers shou ld be subject to criminal background checks, a minimum set of basic careg iver training standa rds, and training on mandated “abuse and neglect” reporting. Several commenters requested that the regulation require States to a dopt national credentialing standards for personal assistance attendant care providers. One commenter requested that we confirm that the individual’s right to establish additional staff qualifications does not interfere with a State’s ability to set provider qualifications including those neces sary to ensure the individual’s health and welfare. A few commenters expressed con cern that the State would not define the qualifications of providers who are not part of an agency, such as family members and friends. These commenters believed that ther e should be minimum safe guards that States must meet in establishing provider qualific ations for services provided under both an agency model and self-directed model. Thes e standards should incl ude caregiver training and competencies, health assessments, quality assurance systems and others. Response : Consistent with other Medica id authorities providing personal assistant services, States have the flex ibility to establish the minimum provider qualifications for providers of services pr ovided under the agency–provider model. Adescription of provider qualific ations will be reviewed witheach State’s proposal to implement CFC. Additionally, individuals r eceiving services under the agency-provider model retain the right to establish additional staff qualifications based on the individual’s needs and preferences. We agree that these additional qualifications should not interfere with the State’s ability to pr otect the health and welfare of individuals receiving CFC services and supports. We appreciate the commenters’ suggestions for possible safeguards States could employ to protect the health and welfare of participants receiving CFC services. While we agree with the suggestions, we believe that mandating specific safeguards will not allow States the flexibility to utilize procedures that have proven successful. In addition, we do not believe it is necessary or appropriate to establish at the Federal or State level provider qualifications for individuals delivering services via the self-directed model with service budget. A hallmark of self-directed models is the abilityof the individual receiving services to define the qualifica tions of those furnishing services. The only exceptions in CFC is the need to adhere to requirements of State Practice Acts when determining the ability of “health-related ta sks” to be delegate d by licensed healthcare professionals and adherence to section 1903(i) of the Act prohibit ing payment for items or services furnished by individuals or en tities excluded from participating in the Medicaid Program. We believe requiring State assurance of the provision of necessary safeguards is sufficient; however, as indicated above, we are moving this required assurance and adding language requiring adherence to section 1903(i) of th e Act to §441.570, State
Assurances.Comment : One commenter expressed concern that providers with a history of defrauding government programs need to be avoided in the selection process. Response : We agree with the commenters’ concerns and expect States to implement safeguards to prevent such indi viduals or entities from providing CFC services.
Comment : Several commenters requested the regulation require that all employers comply with basic attendant care providers rights such as minimum wage, tax withholding and provision of attendant care providers compensation. Response : Except for the mandatory flexibil ity within the self-directed model with service budget for i ndividuals to retain the authorityto determine the amount to be paid for a service, we believe the comme nters’ suggestions are addressed in the requirements set forth in §§441.545 and 441.570. Additionally, we have modified §441.570 State Assurances to add a paragraph (d )(5) to say “any other employment or tax related requirements.”
Comment : One commenter asked if the personal care attendant is considered to be the provider. If the pers onal care attendants are consid ered to be providers, the commenter wanted to know if the providers are subject to the screening requirements under §455.000. Response : Based on the commenter’s statement we are unable to determine if the commenter is referencing the program inte grity requirements found at 42 CFR Part 455 or if this is an error as the proposed ru le for CFC did not contain a §455.000. However, we note that §400.203(1) defines provider as eith er of the following: (1) For the fee-forservice program, any individual or entity furnishing Medicaid services under an agreement with the Medicaid agency; or (2) For the managed care program, anyindividual or entity that is e ngaged in the delivery of healthcare services and is legally authorized to do so by the State in which it deli vers the services. To the extent personal care attendants meet one of the above defini tions, they would be considered Medicaid providers and subject the program integrity requirements found at 42 CFR part 455. We acknowledge that the inherent flexibility of who can provi de services under a selfdirected service model, may result in a pers onal care attendant not meeting the definition of providers found in §400.203. We believe th e program safeguards included throughout this regulation, such as the activities re quired under the support system, provider qualifications, State assurances, and establishing a quality assurance system that evaluates quality of care and develops and implements mechanisms for discovery and remediation and quality improvement activities, will ensure individuals receiving services under this benefit are afforded protections of health , safety and program integrity in circumstances in which the personal care a ttendant does not fall within the regulatory definition of a provider. Additionally, a Stat e must adhere to the provisions of section 1902(a)(27) of the Act, and Federal regulations §431.107, governing provider agreements. Comment : We received many comments s upporting the requirement that individuals have the option to permit fam ily members or other individuals of their choosing to provide attendant services and supports. We also received many comments supporting the requirement that individuals set their own qualifications for family members or individuals they recruit. Response : We appreciate the commenter’s support.
Comment : One commenter believes services are best provided by public or notfor-profit entities. The commenter believes that if for-profit driven entities are used, thecontracts should specify the pr ofit and make sure the rest is spent for the consumers’ benefit. The commenter also expressed concern that services may be cut to boost profits. Response : The statute does not include langua ge to exclude for-profit entities from providing CFC services if they are quali fied to do so. We believe the regulation provides sufficient safeguards to thwart inappr opriate behavior that could occur with any provider.
Comment : One commenter stated consumer voices need to be heard regarding the selection for providers. Response : We believe that self-direction and consumer choice are supported throughout the rule. Regardless of the serv ice delivery model, the individuals have control over who is providing se rvices to them. As specified in the statute, and implemented in provisions of the rule, indivi duals have control to select and manage services. The Development and Implementati on Council, which requires its membership composition include a majority of elderly indi viduals, individuals w ith disabilities, and their representatives, is an excellent forum to discuss important issues such as service delivery options and provider types to be included in the State’s CFC program.
Comment : We received many comments re questing clarification regarding whether individuals are allowed to hire fam ily members to provide CFC services. The commenters requested that participants be allowed maximum flexibility to hire any individual capable of providi ng services and supports, in cluding legally responsible relatives. Many commenters requested thatthe regulatory language at §441.565(b) state that individuals have the op tion to have family members provide services and supports whether the State allows family members to be a attendant care provider or not.Response : Section 1915(k)(1)(A)( iv)(III) of the Act requires that services are provided by any individual who is qualified to provide suchservices, including family members. We interpret this to mean thatunder the self –directed model with service budget, States must allow individuals to hi re family members qualified to provide any service identified on the person-centered se rvice plan. Recognizing States have the option of only offering the agency-provider m odel, we expect that this model would allow an individual to exercise maximum c ontrol over who provides services to them. While we cannot mandate agencies to em ploy individuals’ family members for the purpose of providing CFC services, we str ongly encourage agencies to consider employing such individuals if they meetthe established qualifications.
Comment : Many commenters requested the regulatory langu age at §441.565(c) be revised to state that indivi duals or their representatives ha ve the right to train attendant care providers to perform any tasks within anapproved service planwithout regard to State licensure or certif ication requirements. Response : We interpret this provision to al low individuals to train providers to perform non-skilled activities tailored to the specific needs of the individual; therefore, we are not revising the regulat ory language. However, for reimbursement to be made for services that meet the definiti on of a health-related task, those services must be delegated within the State’s Practice Act for th e practitioner delegating the service.
Comment : One commenter asked for confirma tion on the applicability of 42 CFR 440.167 that prohibits FFP for payments to legally responsible individuals for the provision of State plan personal care services, unless those serv ices meet the criteria as being “extraordinary” care.Response : The regulatory requirements for Stat e Plan personal care services do not apply to CFC, which has its own statutory and regulatory requirements. We acknowledge the confusion created by including in the same s ection State flexibilities in determining provider qualific ations under agency-provi der models and individual flexibilities in determining provider qualif ications under self-dir ected models with service budgets. Such confusion was evident in many comments received. To that end, we are revising this section to indicate that paragraph (a) applies to all service delivery models, and paragraph (b) appl ies only to agency models a nd paragraph (c) applies only to self-directed models with a service budget. Paragraph (d ) applies to “other” models defined by the State.
Comment : Many commenters expressed concer n that the provider qualifications established by the State could threaten the ability of indi viduals to staff their support needs. The commenters suggested there be an exception process if there is no satisfactory attendant care provider ava ilable and the consumer makes a voluntary affirmative choice to waive the provider qua lifications requirement. The commenters suggested that the regulation define “volunt ary affirmative choice” in a way that will allow informed and sophisticated consumers to have the default requirement for a provider qualifications waiver , while not allowing this authority to be abused. For example, an agency should not be able to offer an unsuspecting consumer a waiver to “get a faster attendant placement.” La stly, the commenter recommended that the administrative burdens of ascertaining and ev aluating provider qualifications should not fall so heavily on an individual as to prevent hiring. Response : As noted above, we have restructured this paragraph to clarify the requirements that apply under the various se rvice delivery models. We believe thisshould alleviate any confusion. However, we disagree with the commenters’ recommendation to add an exception process for individuals if th ere is no satisfactory attendant care provider available. For the purposes of ensuring health and welfare of individuals receiving CFC services, we believe that providers must meet either the qualification standards establis hed by the State when servi ces are delivered through the agency-provider model, or by the individual, when services are delivered through the self-directed model w ith service budget.
Comment : One commenter requested clarification as to whether a State, in accordance with State law, may prohibit family members from serving as the client’s representative while also providi ng paid attendant services. Response : We are clarifying here that an indi vidual’s representative may not also serve as the individual’s paidattendant. This arrangement was prohibited in the section 1915(j) program, and we are modifying the de finition of “individual’s representative” to continue that prohi bition for CFC.
Comment : One commenter requested that the regulation give States the authority to determine which family members may act as providers of care. Response : We do not believe it is appropriate for the regulation to authorize States to determine which family members may act as providers of care under the selfdirected model with service budget. Consiste nt with the philosophy of self-direction, we believe individuals receiving CFC services must have th e opportunity to exercise maximum control in deciding who can provide services.
Comment : One commenter indicated that when services are provided in a traditional agency model, the regulation should mandate that States establish a qualification standard that includes establishi ng a specific set of pa tient rights, includingthe right to immediate access to a supervisor to request a change in attendant, or hours, or duties. Response : We do not agree that the regul ation should mandate that States establish qualifications above and beyond what is already required for CFC. We believe that these important indivi dual rights are included as re quirements under the personcentered planning requirements at §441.540 and the support system requirements at §441.555.
Comment : One commenter suggested that the regulation should set the expectation that fraud, waste and abuse will not be tolerated and should be prevented, punished and prosecuted. Response : A major tenet of the Medicaid program is maintaining program integrity. This requirement applies not onl y the section 1915(k) authority, but to all Medicaid authorities. In addition, the CF C regulation specifically requires services furnished to be based on the assessment of f unctional need, and indi cates that the personcentered service plan should pr event the provision of unnecessa ry or inappropriate care. To promote the integrity of the Medicaid program, we have modified §441.570(a), State assurances, to explicitly require a State’s a dherence to section 1903(i) of the Act, which stipulates that Medicaid payment shall not be made for items or services furnished by individuals or entities ex cluded from participating in the Medicaid Program, when implementing the CFC State plan option.
Comment : One commenter believes mandatoryattendant training should be required. Another commenter believes the Stat e should make available training programs or individualized coaching for those participan ts who prefer their a ttendant care provider receive such training. Alterna tively, many commenters support the right of individuals totrain attendant care providers in the speci fic areas of attendant care needed. The commenters suggested CMS clarify the interactio n of this individual ri ght with State laws mandating training requirements governing all attendant care providers. Response : We disagree with the commenters’ suggestion to require States to have mandatory trainings for providers of attend ant services, as this would remove the authority vested in the individuals to trai n their providers. However, to support the requirement at §441.565 that indivi duals retain the right to tr ain attendant care providers in specific areas, and to be consistent w ith related requirements under section 1915(j) of the Act, we expect States to allow individua ls to have access to a dditional attendant care provider training if needed or desired by the individual and related to needs identified in the person-centered plan. We have revise d the rule at §441.565 (a )(1) to reflect this change.
Comment : One commenter requests that cultural competency provisions explicitly include lesbian, gay, bise xual, and transgender populations. Response : We do not believe that language sp ecific to lesbian, gay, bisexual, and transgender populations is necessary, as th e requirement applies for all individuals receiving CFC services.
Comment : A few commenters believe that th ere should be certain safeguards and oversight to ensure that services have been provided appropriately and at the level that is authorized. Response : We believe that the regulati on provides sufficient individual protections to detect whethe r needed services are provide d appropriately. It is our expectation that an individua l’s services will be monito red by the entity providing support system services, and any irregularities in the provision of services will bedetected and addressed. Additionally, the St ate Medicaid agency will exercise ongoing oversight and monitoring of the provision ofservices through review of the personcentered service plans, and through the Qua lity Assurance and Improvement Plan.
Comment : One commenter requested clarification regarding whether a State may set limits on the number of hours an individual may receive from any single family member, such as 40 hours per week. Response : We do not believe it is appropriate for States to apply limitations to a certain classification of providers. Upon consideration of public comments received, we are finalizing §441.565 with revision, moving the requirement in paragraph (a) that requires St ates to assure the necessary safeguards that will be taken to protect the health and welfare of enrollees in CFC to §441.570. “State Assurances” and modify ing paragraph (c) to include the phrase “including through the use of training progr ams offered by the State.” We are also modifying this section to specify which requ irements apply in various service delivery models. P. State Assurances (§441.570) We proposed to reflect the requirements at section 1915(k)(3)(C) of the Act that, for the first full fiscal year in which the St ate plan amendment is implemented, the State must maintain or exceed the level of expe nditures for services pr ovided under sections 1905(a), 1915, or 1115 of the Act, or otherwise, to individuals with di sabilities or elderly individuals attributable to the preceding fiscal year. We al so proposed to interpret this requirement to be limited to personal care atte ndant services. In a ddition we proposed to reflect requirements at section 1915(k)(4) of the Act that Stat es electing this option must comply with certain laws in the provision of CFC regardless of which service deliverymodel the State elects to provide. Specificall y, the statute requires that services and supports are provided in accordance with th e Fair Labor Standards Act of 1938 and applicable Federal and State laws regardi ng withholding and payment of Federal and State income and payroll taxes; provisi on of unemployment and workers compensation insurance for attendant care workers; maintenance of gene ral liability insurance; and occupational health and safety. We proposed to include these assuranc es as specified in the statute at §441.570(b).
Comment : Multiple commenters supported limiting the application of the State maintenance of expenditure requirement to a de fined set of services rather than to all Medicaid expenditures for older people and individuals with disabilities. Multiple commenters agreed that there is a need to develop a standard wh ich more accurately reflects the legislative intent of CFC, as a pplying the maintenance of expenditure to all services is overly broad and would render th e provision “nearly poin tless”, but indicated that limiting it only to personal care services is overly narrow. Multiple commenters added that the maintenance of expenditure requirement should include all home and community-based services, not just persona l care and indicated that this would be consistent with the intent of the law. Other commenters asked CMS to clarify in the regulation that CMS interprete d this requirement to only a pply to personal care attendant services under sections 1905(a), 1915, and 1115 of the Act for the first year. Response : We interpreted section 1915(k)(3)(C ) of the Act to mean that, for the first full calendar year in which the State c hooses to offer CFC in the State plan, the State’s share of Medicaid personal care atte ndant expenditures fo r individuals with disabilities or elderly individuals must remain at the same level or be greater than State expenditures from the previous 12 month period year. As CFC is an attendant servicesand supports benefit, we believe it is appropriate to apply th is maintenance of expenditure requirement only to comparable expenditure s authorized under se ctions 1905(a), 1915, 1115 or other sections of the Act. We articu lated this interpretati on in the preamble of the proposed rule. To increase the clarity of this requirement, we are modifying the regulatory provision to specify the scope of services required unde r the requirement, to indicate that the clause “or otherwise” also applies to home and community-based attendant services authorized under other provisions of the So cial Security Act, clarify that this requirement applied to State expendi tures and to clarify we interpret the fiscal year to be a 12 month period. The new langua ge will say “For the first full 12 month period in which the State plan amendment is implemented, the State must maintain or exceed the level of State expenditures for ho me and community-based attendant services and supports provided under sections 1115, 1905(a) , 1915, or otherwise, under the Act, to individuals with disabilities or elderly individuals attributab le to the preceding 12 month period.”
Comment : A commenter indicated a 1-ye ar maintenance of expenditure requirement is not sufficient, given that dem ographics will drive an increasing need and suggested that the requirement s hould be at a baseline for the fi rst full fiscal year and then increase based on factors such as populati on demographics or i ndicators of need or demand such as waiting lists, applications for services, etc. Another commenter recommended that the requirement include gradual increases each year in access to personal care services. Response : We believe that section 1915(k)(3)(C ) of the Act was clear in terms of the timeframe for which States are require d to maintain or exceed the level of expenditures.Comment : Multiple commenters indicated th at while States should have the flexibility to move beneficiar ies from other programs into CFC, they recommended that safeguards be in place to ensure that bene ficiaries do not experien ce any disruptions or loss of benefits, and that they are able to retain their provid ers from the initial program if they previously directed thei r own supports. Multiple commenters added that the shift should be seamless for consumers. Another co mmenter added that if States substitute personal care services under CFC for otherw ise available personal care services, the qualifications and availability of the services should be maintained so that no currently eligible person or group loses care, and pointed out that the level of expenditures could be maintained in several ways including the expansion of eligibility for personal care services under section 19 15(c) programs or State plan personal care. Response : We believe the maintenance of expenditures provision will serve as a safeguard in that these expend itures cannot decrease for the fi rst year of implementation; however, we acknowledge the commenters’ concer ns and expect States to ensure that services will not be disrupted, decreased, or lo st as a result of a St ate choosing to elect CFC. We do not foresee there being an i ssue with individuals retaining their current providers if they choose to receive their attendant services an d supports through CFC.
Comment : Multiple commenters stated that it was their belief that the legislative intent of the maintenance of expenditure provi sion was to ensure that States implemented the CFC to expand access to services, and not as a way to constrict existing services while securing higher matching funds. The co mmenters suggested that there be extra scrutiny of State reductions in services that are related to taking up CFC, in particular, where the State makes no effort to grandf ather in existing services for affected consumers. The commenters explained that if a State were to take up the CFC option andapply an institutional level of care eligibility requirement, the State might be tempted to eliminate its personal care option to get highe r match for those services through CFC. The commenter added that the large majority of States do not have an institutional level of care requirement for the personal care opti on and thus many indivi duals who were in the personal care option would not be able to transition to CFC. While the commenter noted that the State would likely not be in technical violation of the maintenance of expenditure requirement, based on the broade r CFC spending obligations, it might violate the spirit of the CFC for thousands of consum ers to find themselves without personal care services. The commenter cautioned that HHS should be careful to avoid helping States evade the purpose of the requirement. Response : We do not believe that this regu lation promotes the constriction of existing services to secure higher matchi ng funds. We appreci ate the suggestions regarding the potential reduc tion of services. The CFC State plan option provides individuals requiring an institutional level of care the opportunity to receive personal attendant services and supports (PAS) in the community instead of in an institution. We anticipate States will use this State plan option to improve access to non-institutional long term care services and supports. Additiona lly, §441.570 requires States, for the first 12 months of implementing this State plan opti on, to maintain or exceed the level of State expenditures for similar services provided under other benefit authorities under the Act.
Comment : One commenter advised that if the maintenance of expenditure requirements for CFC pertain only to persona l care attendant services, it should be clarified in the regulatory langua ge in paragraph (a) to includ e HCBS waiver services as well. The commenter also expressed con cern regarding the interaction between the Affordable Care Act Maintenance of Effort (MOE) for home and community-basedwaiver services and the main tenance of expenditure requirement for CFC purposes, as the commenter anticipated that pers ons may move from a waiver to CFC, and indicated that States should not risk noncompliance withthe MOE under the Affordable Care Act if persons move from HCBS to CFC. Anothe r commenter indicated that States need clarification as to whether theyare required to maintain the same number of waiver slots, as would be required by the Affordable Care Act MOE if a State takes up CFC, as States may be unwilling to take up the option if they cannot rea lize savings from directing people away from waivers and towards less expensive State plan services. Response : This set of comments addressed two aspects of the maintenance of expenditure requirement of CFC. First, the spending covered by the maintenance of expenditure requirements are for home and co mmunity-based attendant care services in the State as authorized under sections 1905( a), 1915, 1115, or otherwise, under the Act. The final rule reflects that this requirement pertains to these services and these provisions of statute. Secondly, the comments raised questions regarding the relationship of the maintenance of expenditure requirements as se t forth in section 1915(k) of the Act to the MOE requirements established through Affordable Care Act as such requirements apply to long term services and supports, including HCBS waiver programs. The Affordable Care Act MOE pertains to Me dicaid eligibility standards, methodologies, and procedures. Because institutional care and HCBS waivers ca n serve as a doorway to eligibility for certain individuals, changes impacting access to those benefits may raise MOE questions. While changes to the section 1915(c) waiv er eligibility and capacity may have implications for the Affordable Care Act re quirements regarding MOE, a State currently has great flexibility to modify benefits to ma nage waiver costs. As a result, a State mayelect to provide attendant car e services and supports through CFC that are currently provided through other Medicaid authorities. States seeki ng to reduce waiver capacity (“slots”) or otherwise adjustthe eligibility requiremen ts for HCBS waivers should consult with CMS to ensure continued comp liance with the MOE requirements, and to receive guidance on alternatives available to them in this regard. For additional information on the MOE requirements of the A ffordable Care Act a nd its relationship to HCBS waivers, please see the State Medicaid Director letter issued on this matter at http://www.cms.gov/SMDL/SMD/list.asp#TopOfPage

. However, we do encourage States to ev aluate what it offers under existing programs and consider the opportunities offered through CFC and the corresponding reporting and quality requirements to determine what is best for each State and its beneficiaries. We note that the additional 6 percentage point increase in FMAP would apply only to CFC, and would not apply to any currently approved program authorizing personal attendant serv ices and supports.
Comment : A commenter recommended that CM S require States to formulate a plan to reduce existing waiver waiting lists for personal attendant care services. Response : While we appreciate the commenter ’s suggestion, we do not plan to add a requirement to CFC for States to formulat e such a plan as it is outside the scope of this benefit.
Comment : Another commenter requested further clarification on the section 1915(k)(4) requirement that waiver services meet FLSA and payroll tax requirements. Currently the State in which this commenter re sides does not pay payroll taxes. The State shifts its payroll obligations to Medicaid r ecipients and also imposes unpaid care on the providers forcing them to “volunteer” for their employers. The commenter would likeclarification as to whether or not CMS is attempting to remedy these abuses for CFC Option, as well as existing waivers. Response : We reiterate that CFC is not a wa iver program, but is a new, optional State plan benefit. Any State implementing CF C must adhere to the requirements in the authorizing legislation. By submitting a SPA to implement this program, the State will be assuring adherence to these requirements. States have the ability to contract with entities for the provision of activities such as the withholding of payr oll taxes, etc., but retain ultimate responsibility for ensuring they are done appropriately.
Comment : A commenter asked for details rega rding the applicable Federal laws regarding the requirement to maintain “general liability insurance” as their State’s current personal care services program does not require this insura nce for any party, and their current program is in compliance with al l other provisions of this section. The commenter requested that th is language be removed. A nother commenter asked that CMS clarify which entity is expected to maintain general liability insurance as it is unclear whether it is the individu al self directing care, the attendant providing services, or the financial management entity. The comment er also asked CMS to clarify whether the attendant’s employer must provide attendant care providers with health insurance
coverage. Response : These details are best left to State Medicaid Agencies as they implement the program, so as to allow for State flexibility.
Comment : Another commenter suggested that CMS require States to set forth in detail how they intend to comply with/m eet the various employment-related laws.Response : States electing CFC must submit a State plan amendment that assures their adherence to this requirement. The speci fics of how this happens are left to the States to determine.
Comment : A commenter stated that at para graph (c)(4), CMS indicates that a State must assure that all applicable provisi ons of Federal and Stat e law are met including those related to “occupational health and safety” and added that since the majority of CFC services will be delivered under person-centered plans and primarily in persons’ residences, CMS should clarify how they e nvision States ensuring compliance with OSHA requirements, if that is the intent. The commenter stated that if compliance with OSHA requirements is not the intent, CM S needs to clarify what is meant by “occupational health and safety.” Response : These assurances were set forth instatute at section 1915(k)(4) of the Act. We will look to the State Medicaid Agen cies to implement any policies they believe are necessary to ensure compliance.
Comment : Two commenters proposed an additional assurance at a new paragraph (c)(5) that States ensure that fi scal agents who will be cutting checks to attendant care providers on behalf of beneficiaries have suffici ent cash reserves to be able to pay attendant care providers timely, notw ithstanding delays in reimbursement due to bank holidays, etc. Response : It is the responsibility of a State to ensure that the fiscal agents with whom the State chooses to work are capable of compensating providers of services and supports.Comment : Several commenters recommende d the following language: “A State must assure that fair hearing processes for individuals are met in accordance with 42 CFR Part 431 Subpart E.” Response : State Medicaid programs must adhere to the fair hearing requirements at 42 CFR Part 431 Subpart E fo r all Medicaid programs. Therefore, we do not agree with the commenters that it is necessary to add an additional St ate assurance to the regulations for CFC.
Comment : A commenter suggested that the re gulation promote the use of local, peer-based and consumer-controlled providers so beneficiaries have maximum access to their fiscal agent. Response : This regulation includes extensive flexibility for States to establish provider qualifications in a way that encompasses a broad pool of experience. Individuals participating in a self-directed model will have ultimate flexibility for selecting providers of services. Upon consideration of public comments received, we are finalizing §441.570 with revision, to clarify the intentof the maintenance of expenditures requirements proposed in paragraph (a), now paragraph (b). In a ddition, as indicated above , we are adding a new paragraph to reflect the moveme nt of the requirement that St ates assure the provision of necessary safeguards to prot ect the health and welfare of CFC enrollees including adherence to section 1903(i) of the Act which stipulates that Medicaid payment shall not be made for items or services furnished by individuals or entities excluded from participating in the Medicaid Program. This will be a new paragraph (a), with the existing language being adjusted accor dingly. As indicated in §441.565, ProviderQualifications, we are adding a new paragra ph (d)(5) to state “any other employment or tax related requirements.” Q. Development and Implementation Council (§441.575) We proposed that States must establ ish a Development and Implementation Council that is primarily comprised of indivi duals with disabilities, elderl y individuals and their representatives. We also proposed to require that States must consult and collaborate with this Council during the development and impl ementation of a State plan amendment to provide home and community-bas ed attendant services and supports under
CFC.
Comment : Many commenters had positive comments regarding the Development and Implementation Council. Many co mmenters stated the Development and Implementation Council is an excellent idea and a positive step forward for States, as well as a mechanism to ensure consumer input and implementation monitoring. Many of the commenters were pleased that CMS is soliciting comments on ways to design the Implementation Council, as it provides fo r robust stakeholder collaboration. Response : We agree that the Council will provide additional opportunities for stakeholder input and collaboration.
Comment : Many commenters weighed in on the makeup of the Development and Implementation Council. Many commenters re quested that a diverse population from advocacy organizations, disability rights groups, private agency representatives, stakeholders, direct support professionals, and direct service attendant care providers or their representatives be include d in the Council’s membership. Many commenters requested that the final rule ensure that a majority of the Council is made up of individuals with di sabilities, elderly in dividuals, and theirrepresentatives. The commenters furthe r recommended that the Council should be comprised of members that reflect the dive rse populations who use or could use CFC services and supports. One commenter reques ted that the following sentence be added to the end of §441.575(a): “This Council must al so include home and community-based attendants or their selected representatives.” Another commenter re quested that the rule should require that 51 percent of the Counc il be made up of elderly or disabled individuals. Response : Section 1915(k)(3)(A) of the Act requires that this Council include a majority of members with disabilities, elderl y individuals and their representatives. This was reflected in the proposed rule at §441.575 and is a requirement of the program. We believe that this membership will reflect th e populations who will participate in CFC. We acknowledge that various advocacy organi zations, disability rights groups, private agency representatives, stakeholders, directsupport professionals and direct service attendant care providers and re presentatives could have a voi ce on the Council as long as the Council meets the requirements set forth in the final regulation. We do not agree that the regulation should add an additional requ irement that attendants or their selected representatives be included in the member ship of the Council or that the Council be broken down into a specific perc entage of individuals. The statute specifically requires a “majority” of members with disabilities, elde rly individuals and thei r representatives and this language will be maintained in our final rule. However, we acknowledge that the regulatory language proposed in the proposed ru le used the phrase “p rimarily comprised” rather than a “majority.” We are revising the regulation to more closely align with the

statute.Comment : One commenter requested that cons umers with the highest needs have a significant presence on the Development and Implementation Council. Response : We believe that a having an arra y of individuals with varying needs on the Council will provide a broa d representation of the individuals for whom CFC was created.
Comment : One commenter requested further definition of an “aging or disability” consumer. The commenter requeste d clarification on whether an older adult, who is not Medicaid eligible or low inco me, could hold a position on the Council under the current definition. Response : Section 1915(k)(3)(A) of the Act requires that the Development and Implementation Council include a majority of members with disabilities, elderly individuals and their representatives. The st atute did not set forth any additional qualifier or specifications these individuals must meet to participate on the Council. Therefore, we do not believe an older adult who is not on Medicaid or is not low-income would be prohibited from particip ating on the Council.
Comment : One commenter requested that the regulation suggest agencies and advocacy groups from which the Council could recruit. Response : We disagree with providing spec ific agencies and advocacy groups from which to recruit, as th is would unfairly advantage cert ain groups. States have the flexibility to determine how to best meet this requirement.
Comment : Many commenters requested that the Council’s meetings and other functions be accessible and that supports be provided to individuals, as needed, to facilitate their full participation. The comme nters indicated that these supports could include the use of modern technological devi ces. Several commenters requested that theDevelopment and Implementation Council shou ld hold their meetings publically and provide opportunities for public input, which would allow for transparency. Response : We agree that the Council’s meetings and other functions should be accessible to individuals to facilitate thei r full participation. With regard to the commenters’ suggestion to requ ire that these meetings be held publicly to allow for transparency, while we appreciat e the suggestion, States have the flexibility to decide how to meet these requirements. A State’ s proposal for operating the Council will need to be described in their State plan ame ndment and approved by CMS for implementation. We do encourage these meetings to be held in a way that facilitates participation by a broad range of individuals.
Comment : Several commenters requested clar ification of what “transparency in the selection process” means, as mentioned inthe preamble to this section, and suggested using rules for implementing section 10201(i) of the Affordable Care Act as a means of providing transparency. Response : In the proposed rule, we invited comments regarding how States could achieve robust stakeholder input including tr ansparency in the selection process and activities of the Council. The intent of this request was to gather ideas regarding what processes States might use to select members of the Council. States have the flexibility to determine how to meet the re quirements of the final rule an d we encourage States to be transparent in their selection processes.
Comment : One commenter requested that St ates be required to provide public notice on how they will establish the Development and Implementation Council. Response : While we encourage States to provide public noti ce regarding how they will establish the Council, as this is a matter of interest to individuals and may be adirect way to solicit members, we do not agree that this should be an additional requirement that is added to th is regulation. States maintainthe flexibility to determine how to best meet the requirements to implement CFC.
Comment : Many commenters provided input related to how the Development and Implementation Council should be structured and the duties associated with it. Many commenters requested that baseline definitions and minimum participation standards for the Council be included in the final rule. Response : We disagree with further defini ng the role of the Council or with setting minimum participation standards for the Council in this regulation.
Comment : One commenter provided models and examples of committees and councils formed to address issues related to home health care. Response : We appreciate the commenter’s efforts and contribution, but again emphasize that, outside of the specific mandate s of the regulation, States will have the discretion to design their councils.
Comment : One commenter requested that the regulation require the Council to be in place, and to provide recommendations on CFC prior to October 2011, or whenever the State implements the program. Response : We agree with the commenter that the Council will need to be in place prior to implementation, as the State is re quired to consult and collaborate with the Council to develop a State plan amendment for CFC, as set forth in section 1915(k)(3)(A) of the Act and reflected at §441.575. We do not agree that re visions to the regulation are
necessary. Comment : One commenter requested that Council members be trained on what it means to be a Council member, including what th e expectations are w ith regard to theirrole representing a larger constituency group. Council members should be supported in the acquisition of knowledge necessary to be active members and provided support to ensure meeting attendance. Response : We agree that members of the C ouncil should understa nd their role in the Council and the responsibilitie s that the Council ha s with regard to CFC. States may want to take this into consideration when de termining how to best meet the requirements of this Council. It is impo rtant for the Council membership to understand their role and the purpose of the Council as a whole. Tr aining requirements for the Council are beyond the scope of this regulation and we do not ag ree with the commenter that these should be added to the regulation. With regard to th e commenter’s point about support for meeting attendance, as we indicated above, States s hould make every effort to ensure that the meetings are held at times and locations that are accessible to the members of the Council.
Comment : One commenter requested that fi nancial and personnel resources be dedicated solely to the work of the Council. The comment er added that States should recognize that the frequency of meetings will impact the success of the Council and suggested that they occur at least quarterly. Response : States have the flexibility to im plement the Council, and to determine the frequency at which meetings of the Council will occur, as long as all the requirements in the final regulation are met. Therefore, we do not agree that th e regulation should add specific requirements pertaining to these issues.
Comment : Many commenters weighed in on th e level of influence that the Development and Implementation Council has onthe State. One commenter requested that the recommendations made by the De velopment and Implementation Council beincorporated into the State plan. One comment er expressed concern regarding the role of Council as it relates to th e independent decision making authority of the State in developing and implementing a State plan amendment for CFC. The commenter would like clarification that the Council should in no way be empowered to impede a State’s authority. Response : As noted above, section 1915(k)(3 )(A) of the Act sets forth the requirement that a State establish the Deve lopment and Implementation Council. This provision also requires a State to consult and collaborate with this Council to develop and implement the State plan amendment for CFC. While States must describe in their State plan amendment how this collaboration and consultation occurred, this does not mean that the State’s ability to make decisions is compromised. States need to consider the Council’s input and should make every effort to incorporate the feedback of the Council in these decisions. However, we are not interp reting “collaboration” as total concurrence.
Comment : Another commenter requested that the life of the Development and Implementation Council be extended beyond impl ementation to include a role in the ongoing improvement of the State’s CFC program. Response : Section 1915(k)(3) of the Act requires consul tation and collaboration with the Council “in order for a State plan amendment to be approved under this paragraph.” We encourage St ates to continue operations of the Council even after implementation of CFC. A strict interpreta tion of the statute woul d require consultation and collaboration with the C ouncil prior to submitting any type of CFC SPA to CMS, which would encompass amendments to an already approved CFC SP A. We recognize that requiring such consultation and collabora tion prior to submitting a SPA to implement a minor or administrative change would be overly burdensome to both the State andCouncil members. But we are taking this opportunity to specify that any substantive changes to the operation of an approve d CFC program would require the prior consultation and collaboration of the Council. We would define a substantive change to include revisions to the amount, duration, a nd scope of services provided under CFC, revisions to the service delivery model, revi sions to payment methodologies, etc.
Comment : Another commenter requeste d that the Development and Implementation Council identify specific data to help better advi se the State on the program and recommended that the proposed ru les should also assure that States are responsive to the Council’s request for such data. Response : Section 441.575 reflects the requirements in the statute for this Council and we do not agree that additional re quirements are necessary in regulation.
Comment : Many commenters requested further guidance from CMS regarding the Development and Implementation Council. A number of co mmenters requested confirmation that a State may use an existing self directed care advisory committee or whether the requirement is for a dedicated advisory Council limite d to self direction pursued under the section 1915( k) authority. Many comment ers believe States should ensure that the Council coordi nates with other st akeholder bodies that have related missions such as Olmstead implementation councils and long-term service and support commissions. Response : States may utilize existing adviso ry bodies in the implementation of CFC, as long as the statutory requiremen ts for the Development and Implementation Council are met. We acknowledge the benefits of the Council coordinating with related stakeholder councils and commi ssions and strongly encourage States to do so. Statesmay also choose to leverage these councils and/or incorporate members from these councils to meet the requirements for CFC.
Comment : Many commenters requested ame nding the current proposed language to include more specific Development a nd Implementation Council criteria regarding what groups should be included in the Council membership and additional roles that the Council should assume. Several commenters re quested adding a reference to “direct-care attendant care providers” after “elderly individuals.” The rationale behind the commenters’ request is that direct care attendant care providers’ contributions will enhance the work of the Council by providi ng regular, direct co mmunication with the State on core service delivery issues. Furthermore the commenters recommend the following language be included, “(c) The Council should develop a plan that ensures the adequacy of provider rates and compensati on; makes attendant care provider training available; establishes a central mechanism to help program participants find providers; and develops an approach to collecting essential workforce data elements.” Response : As indicated above, the statut e was very specific in both the requirements for the membership and the functio ns and responsibilities of the Council. The final regulations reflect the statutory re quirement and we do not agree with creating additional requirements that States must meet in addition to whatis clear in the statute.
Comment : One commenter requested clar ification regarding whether the activities of the Development and Implemen tation Council will be eligible for Federal funds because the Council is mandated both by statute and regulation. Response : Activities required by CFC that are done for the operation of the program, such as implementation of the Development and Implementation Council will not receive an additional 6 percentage point FMAP increase, as they are administrativeactivities and are only eligible for the standard Federal administrative matching rate of 50 percent available at §433.15(b)(7).
Comment : Several commenters requested a timeline for the creation of this Council. Response : We believe that the Council should be in place prior to the submittal of a SPA requesting CFC, as States are re quired to consult and collaborate with the Council regarding the development and implementation of a SPA for CFC.
Comment : One commenter requested changing the rule to state: “(a) States must establish a Development and Implementation Council comprised primarily of individuals with disabilities, elderly indivi duals, their representatives, an d disability rights advocates. The Development and Implementation Council mu st be cross-disabi lity and cross-age and must include representation of all categor ies identified in this paragraph; (b) The Council must include individuals who are eligib le for and, when applicable, in receipt of CFC services; (c) States must consult and collaborate with the Council when developing and implementing a State plan amendment to provide home and community-based attendant services and supports or when cont emplating any changes; and (d) To maintain quality assurance, States must continue to regularly consult with the Council and incorporate their recommendations into the operation of the Community First Choice Option.” Response : We appreciate these suggesti ons, but do not agree that these additional requirements need to be incorporated into the regulation.
Comment : Another commenter requeste d changing the Development and Implementation Council language as follows: “( a) States must establish a Development and Implementation Council which includes prov iders and individuals with disabilitiesincluding elderly individuals, and their representatives; and (b) States must consult the Council when developing and implementing a State plan amendment to provide home and community-based attendant services and supports.” Response : We disagree with adding “pr oviders” to §441.575(a). The statute only directs that the majority of the Council must consist of elderly or disabled individuals, and their representatives. We do not be lieve it is appropriate to require other representation. We be lieve that §441.575(b) closely mirro rs the commenter’s change in language and does not require change.
Comment : One commenter requested clarification of the term “representative” in reference to individuals who ar e elderly, have disabilities, or are the representatives of individuals with disabilities. Another commenter requested clarification of the term “consumer representative” as it is ambiguous and could be interpreted as an individual representing a consumer or an employee of an advocacy organization. Response : We are interpreting “representat ive” broadly in th e context of the Council, including both the indi vidual’s representative, as defined in §441.505, and other representatives of elderly indi viduals or individuals with di sabilities in general. The phrase “consumer representative” is not used in this regulation.
Comment : One commenter recommended that the proposed rule expressly state that section 1915(k)(3) of the Act, pertaining to State co llaboration with a Development and Implementation Council, does not negate th e State responsibility to solicit advice from Indian health programs and urban I ndian organizations as required by section 5006(e) of the ARRA.Response : We acknowledge the commenter’s concern. Nothing in the CFC regulation should be construed as superseding current requiremen ts for States in regard to Indian health organizations and programs. Upon consideration of public comments received, we are finalizing §441.575 with revision, to align with the st atutory requirement that a majority of the Council be comprised of individuals with disabilities, el derly individuals, and their representatives. R. Data Collection (§441.580) We proposed to require that States mu st provide information regarding the provision of home and community-based atte ndant services and s upports under CFC for each fiscal year for which the services and supports are provided. We also proposed a number of specific data elements th at must be collected and reported.
Comment : One commenter commended the in clusion of subpart (c) regarding the collecting of information about individuals served under CFC and indicated that this data will be an essential tool to identify deficiencies in the provision of the benefit. Response : We appreciate the commenter’s support.
Comment : A few commenters asked what is meant by “type of disability”, as indicated in paragraph (c). Response : We interpret “type of disabi lity” as set forth in section 1915(k)(5)(B)(iii) to include developmental disability, phys ical disability, traumatic brain injury, etc.
Comment : One commenter stated that in section §441.535(a)(5) States are required to obtain information about an indi vidual’s “school.” This commenter asked if “school” is synonymous with “educati on level” as speci fied in §441.580(c).Response : Based on comments, we revised th e text at §441.535(a) and school is no longer a specified element of the a ssessment of functional need for the implementation of CFC. Therefore, there is no need to clarify further as the data collection requirement at §441.580(c) is cl ear regarding “education level.”
Comment : One commenter asked for a clarification of “previous fiscal year” with regard to data collection timeframes. Response : We interpret “fiscal year” to mean “Federal fiscal year.” We plan to issue additional guidance to States regardi ng maintenance of expenditure requirements.
Comment : Several commenters asked for clarification regarding the data collection requirements at §441.580(e) in term s of what CMS meant by “data regarding how the State provides CFC and other home and community-based services.” Response : We interpret this requirement to mean the methods in which the State delivers home and community-based servic es under CFC, through other State Plan authorities, through section 1915(c) waivers, or through section 1115 demonstrations. For CFC, this could include which service models are offered in the State, the permissible services and supports that a State has chosen to make available, any limits the State has set on services and supports, a nd a number of other factors as determined by the State. We anticipate being able to collect much of the information related to this requirement from the State Plan as the St ate Plan must describe how the State is providing CFC. We anticipate releasing a dditional guidance in the future, providing more detail on data collection and how it re lates to the CFC evaluation required in the legislation.
Comment : One commenter stated that the la nguage in paragra ph (g) appears to be a request for a description and not data co llection activity.Response : We do not understand the commen ter’s concerns based on this comment, but while the requirement at §441.580( g) could include a description of how the State provides individuals the choice to receive home and community-based services in lieu of institutional care, it could also include informati on regarding the methods used to offer this choice, the strategies involv ed in making this choice available, and the number of individuals that have made that choice.
Comment : One commenter asked CMS to clar ify any expectations to reconcile estimated number of individuals anticipated to receive services against actual utilization. This commenter asked if there will be an e xpected accuracy standard and further stated that since this is a new option there is potential for significant discrepancy. Response : We are clarifying that States may report on the actual number of individuals that received CFC services and supports in the prior fiscal year, when reporting on the estimate of individuals expect ed to receive them in the upcoming fiscal year. We understand that th ere will be discrepancies in the number of individuals estimated vs. actually served.
Comment : One commenter sought clarification on the resp ective roles the State and Federal government will play in regard to the evaluation. Response : Section 1915(k)(5) of the Act sets forth the requirements that States provide data to the Secretary for an evaluati on and reports to Congress. The States and the Federal government will part ner to accomplish an evaluation of CFC. The States can evaluate their individual programs based on da ta collected throughout the fiscal year. The Federal government will be evaluating CFC on a nationwide basis based on each State’s data. We anticipate releasing additional gu idance in the future, providing moredetail on data collection and how it relate s to the CFC evaluation required in the legislation.
Comment : One commenter asked whether a se lf-report is an acceptable standard for type of disability, edu cation level and employment status. Additionally, this commenter asked that CMS clarify the acceptability of retaining the original data with updates if there are changes ra ther than collectin g it each year. This commenter also asked for clarification of the expectations for linking the data collected and asked whether a State could begin with data unlinke d and phase in those cap abilities over time. Response : We are deferring answering this qu estion until such time as we release additional guidance in the future, providing more detail on data co llection and how it relates to the CFC evaluation required in the legislation.
Comment : One commenter asked what the Department hopes to collect. Response : Through the data collection pr ocess, the Department hopes to determine the effectiveness of the provision of CFC services and supports in allowing the individuals receiving such services and supports to lead an independent life to the maximum extent possible; the impact on th e physical and emotional health of the individuals who receive such services; and an comparative analysis of the costs of services provided under the State plan amendment under this paragraph and those provided under institutional care in a nursing facility, institut ion for mental diseases, or an intermediate care facility for the mental ly retarded. As such, we are modifying the regulation to include a data collection requirement for States to capture data on the impact of CFC services and supports on the phys ical and emotional h ealth of individuals, and other data as determined by the Secretary.Comment : One commenter requested specificity of the exact data comparison expected for CFC and other home and community-based services. Response : We are deferring answering this qu estion until such time as we release additional guidance in the future, providing more detail on data co llection and how it relates to the CFC evaluation required in the legislation.
Comment : One commenter suggested that the data collectio n section should begin with what questions CMS wants answer ed, some of which are in the preamble. This commenter further asked what the data at §441.580 are supposed to illuminate. In conclusion, this commenter suggested consid ering convening an expert group to help draw up data points. Response : The data collected from States will be used to complete the statutorily required evaluation of the effectiveness of CFC services and supports. We anticipate releasing additional guidance in the future, providing more detail on data collection and how it relates to the CFC evaluati on required in th e legislation.
Comment : One commenter asked for clarific ation regarding reporting the number of individuals that received services and s upports during the preceding fiscal year. This commenter asked if after CFC has been in pl ace the second and followi ng years, if States report the number of persons in CFC from the preceding year(s). Response : In accordance with section 1915(k)(5)(B) of the Act, States should report the number of individuals that have received CFC serv ices and supports during the preceding fiscal year. This means that after CFC has been in place the second and following years, States should report the num ber of persons in CFC for the preceding year (that is, reporting the number of individu als served under CFC in year one after the program has been in place for 2 years).Comment : Two commenters asked for clarific ation pertaining to the requirement to report the specific number of individuals who were previouslyserved under other authorities or State Plan options. Response : To clarify, with regard to indi viduals receiving CFC services and supports, the State should repor t the number of these indivi duals who were previously receiving supports under sections 1115, 1915(c) and (i) of the Act, or the personal care State plan option.
Comment : One commenter asked whether a State may limit the number of individuals reported to those who received attendant support servic es under the specified authorities rather than all individuals serv ed under the waivers, with regard to the requirement in paragraph (d). Response : A State may not limit the number of individuals reported in this way. As stated in §441.580(d), States are required to report th e specific number of CFC individuals who were previously served under another authority regardless of what services and supports were re ceived under that authority.
Comment : One commenter asked whether the requirement to report the specific number of individuals who have been previ ously served under se ctions 1115, 1915(c) and (i) of the Act is intended to include those indi viduals who are served concurrently or just those who are no longer accessing personal care services under those authorities and are now accessing only CFC services. Response : States are required to report the number of individuals who were previously served under the authorities stated above, meaning that these individuals are now accessing attendant care services and supports through the CFC Option. It is possible that individuals rece iving attendant services a nd supports through CFC couldalso be receiving other services, particularly via a section 1115 dem onstration or section 1915(c) waiver.
Comment : One commenter stated that it is im perative that data collection is not a barrier to the provision of timely, high quality services. Response : We agree that data collection shou ld not be a barrie r to the provision of services. Our intention is to place as little burden as po ssible on States and individuals in terms of data collection while ensuring that data is available to comply with the statutory requirements fo r evaluation and reporting.
Comment : Many commenters provided suggesti ons for additional data collection options. One commenter recommended the regulation require recording the number of individuals served, both in terms of the numbe r of individual s eligible to receive CFC, and in terms of individuals receiving all of the various CFC services. Another commenter stated that it would be helpful if the data could show whether individuals who transferred to CFC from another home and community-based option experienced any loss of service subsequent to the transfer. This same commenter recommended that the regulation provide for the collect ion of data in such a way as to tell whether individuals receiving CFC services and supports were previously receiving home and communitybased services through waivers or other options , or if individuals re ceiving CFC services are newly eligible for home and community-based services. Two commenters suggested collecting data specific to the service models utilized. One of these commenters further suggested including what serv ices and items are used by those choosing the agency model versus those who choose the self-direct ed model with a serv ice budget. Several commenters suggested includi ng data pertaining to the number of people who were previously receiving services in in stitutions or nursing facilities. One of thesecommenters suggested collecting data on Medicaid costs of this option vs. Medicaid costs in institutional settings. Two commenters sugg ested that data should be made available to the public. One of these commenters also suggested that CMS should collect the data quarterly. Several commenters also s uggested including data with additional demographic break-down of individuals. Two commenters suggested collecting data pertaining to race. One of these commente rs suggested also including ethnicity, limited English proficiency, and type of residence. One commenter suggested that States include optional sexual orientation and gender identity questions to break down utilization rates. One commenter suggested requiring States to provide data on an individual’s veteran

status. Many commenters recommended that States be urged to provide data on the staff providing services includ ing: attendant care provider avai lability, turnover and retention rates, and compensation. One commenter suggested also collecting data pertaining to training and creden tialing of staff. Additionally, many commenters stated that in a selfdirected delivery system, program participants will be the most likely source of data pertaining to staff, and urged for identificati on of collection methods that will be feasible for participants. One commenter suggested adding an “other as determined by the Secretary” element to this section. Response : We appreciate the ideas and sugge stions that commenters proposed. States continue to have the fl exibility to design their data collection requirements as long as all of the requirements incl uded in the regulation for CFC are met. States may adopt additional data collection requirements for th eir own purposes. As indicated above, we are adding data collection requirements for St ates to capture data on the impact of CFC services and supports on the physical and emoti onal health of individuals, and other data as determined by the Secretary.Comment : One commenter stated that data collection requirements are excessive in comparison to reporting on section 1915(c) wa ivers and the section 1915(j) State Plan option. The commenter also stated that so me of the requirements do not appear to provide CMS or the States with any additional information that is useful in the operation of multiple home and community-based serv ices programs, quality assurance, or customer satisfaction. This commenter also stated that the requirements at paragraphs (a), (b), (d), and (f ) are similar to existing reporting. Response : We have implemented data colle ction requirements as they were specified in the statute. We do not agr ee that the data colle ction requirements are excessive. We believe that these requirements are an essential tool needed to evaluate
CFC.
Comment : One commenter asked for CMS to clarify anticipated mechanisms to report annual estimates, and asked whether CM S will make changes to existing reporting mechanisms. Another commenter suggested that CMS provide States with flexibility in data reporting until existing State automate d systems can be updated to accommodate new reporting requirements. Another commenter stated that mechanisms chosen need to include consumer input and consumer satisf action surveys as well as outcome measures. Response : As we noted, we will provide future guidance on the format of this reporting requirement. We will consider the co mmenters’ perspectives as we develop our guidance and will try to impose as little burden on the States and individuals as possible. However, with regard to State flexibility in reporting, States must provide the information specified in §441.580 in a timely manner regardle ss of the State’s sy stems and potential system modifications needed. States may le verage existing data collection and reporting vehicles to meet the requirements of CFC.Upon consideration of th e public comments receive d, we are finalizing §441.580 with revision, adding data collection requirement s for States to capture data on the impact of CFC services and supports on the physical and emotional health of individuals, and other data as determined by the Secretary. S. Quality Assurance System (§441.585) We proposed to require that States must establish and maintain a comprehensive, continuous quality assurance system, detailed inthe State plan amendment, that includes a quality improvement strategy and employs measures for program performance and quality of care, standards for delivery models, mechanisms for discovery and remediation, and quality improvements proportionate to the benefit and number of individuals served. We proposed that the qua lity assurance system must include program performance measures, quality of care meas ures, standards for delivery models and methods that maximize consumer choice and cont rol. We also required that States elicit and incorporate feedback from key stakehol ders to improve the quality of the CFC benefit and that States must collect and re port on monitoring, reme diation, and quality improvements related to information defined in the State’s quality improvement strategy.
Comment : Several commenters commended the requirement that the quality assurance system be detailed in the CFC SPA. Response : We appreciate the support of this requirement.
Comment : Several commenters noted that it is crucial that the quality management system utilized for CFC reflect the participant direction philosophy and recommended that the quality system resemb le what is seen in sections 1915(i) and 1915(j) of the Act. The commenter indicated that special attention and/or assistance maybe needed to ensure agencies administering CFC implement quality assurance and measurement techniques that build upon the participant direction paradigm. Response : We appreciate the commenters’ vi ews and agree that the perspective of the individuals receiving CFC attendant servic es and supports is an important aspect to consider. We believe the requirement to incorporate stakeholder feedback will complement the other elements of the partic ipant direction philosophy included in CFC. While certain aspects of the CFC quality assura nce system were set forth in the statute, similar measures are required for other Medicaid programs including sections 1915(c), 1915(i) and 1915(j) of the Act, and we anticipa te that States will leverage their current systems to meet the requirements for CFC where possible.
Comment : Multiple commenters suggested additional requirements for the quality assurance system including the following:

● Modification of the program performan ce measures to capture achievement of individuals’ outcomes and goals id entified in the service plan;

● Indication of the choice of location where the servic es are provided such as home, school, work or other;

● Collection of type of living situation such as group home, family home, individual’s home or ot her in §441.585(a)(1)(iii);

● Specification of the choice of institution or community;

● Collection of a core set of functional indicators which are representative of the full range of functional limitations for the CFC population;

● Implementation of measures of consumer satisfaction and consumer experience;● Measurement and reporting of barriers to achievement of individual outcomes and goals and how the State intends to addr ess and remove any identified barriers;

● Collection and monitoring of the diffe rence between the number of personal attendant care hours scheduled or authorized in each qualifiedindividual’s service plan and the hours of the scheduled type of service that are actually delivered to the qualified individual;

● Implementation of a program performa nce measure called “g aps in service” which they believe would allow States to document, gauge and address service gaps;

● Implementation of standard s for services and supports;

● Measurement of the numbers individuals served both in terms of the number of individuals eligible to receive CFC, and in terms of the i ndividuals receiving all of the various CFC services;

● Measurement of the numbers of shifts that went unstaffed;

● Measurement of the gene ral availability, turnover and retention of attendant staffing;

● Measurement of access to services on the basis of fields identified in §441.580(c);

● Measurement of race, ethnicity, lim ited English proficiency, and type of residence;

● Evaluation of whether the payment methodologies for attendant services and supports are sufficient for developing and sustaining an adequate workforce;

● Measurement of the impact direct care workforce wages have on the access consumers have to a wide range of reliable, timely home and community-based services;

● Analysis of workforce quality and stability; and● Development and implementation of pr ogram integrity measures to evaluate the validity of individual elig ibility, appropriateness of the care plan, and propriety of payments to caregivers. Response : We appreciate the commenters’ suggestions regarding additional requirements to be included in States’ qualityassurance systems for CFC. As noted in previous sections, we are working to st reamline the various HCBS requirements and expectations where possible across Medicaid HCBS programs. We are presently working with stakeholders to better understand the mo st effective and efficient method to assure the health and welfare of indi viduals with long term servi ces and support needs, and to maximize quality across Medicaid HCBS author ities. We are considering the feedback from stakeholders, including the feedback received regarding the proposed language for CFC and forthcoming section 1915(i) commen ts, and analyzing current statutory and regulatory guidance across applicable Medicaid authorities. Additiona l guidance will be provided to States regarding a ny streamlined approaches that are developed for utilization across Medicaid HCBS. For the purposes of this regulation and the implementation of CFC, we have revised the quality assurance system requirements to more closely align with requirements included in statute. We will consider these commenters’ suggestions as the work continues to better understand th e most effective and efficient method to assure the health and welfare of individuals with long term services and support needs, and to maximize quality across Medicaid HCBS authorities.
Comment : One commenter indicated that it is critical in a quality improvement framework to examine participant outcom es and suggested that CMS be more prescriptive in the assessment elements which will result in comparable data on which to monitor quality and compare outcomes acros s States over time. The commentersuggested that CMS consider identifying a standard set of measures that would be implemented across States as they believed that this would allow CMS to identify exemplary States that could serve as best practice examples, as well as identify those States that may require support to improve the provision of serv ices to CFC participants. Another commenter recommended that CMS in clude a set of minimum measures in the regulation, stating that this will both ensure States are collecting core meaningful quality measures and also allow for comparison of different programs to help identify best practices. Several commenters indicated that States’ continuous quality assurance systems must be designed to measure and re port on achievement of individual outcomes and goals expressed by beneficiaries in their person-centered services and supports plans. Response : We agree with the commenters that individual outcomes are an important component to consider in terms of quality improvement and quality assurance, particularly as they relate to specific servic es. We expect that States’ quality assurance systems will utilize the info rmation present in service plans to inform how needs are being met across the program and to see where improvements need to be made. As noted earlier, we have modified the Person-Cen tered Service Plan section to include individually identified goal s and desired outcomes. States have the flexibility to incorporate additional measures above what is required through this regulation. Also, as mentioned in the assessment section, we ar e currently working to determine universal core elements to include in an assessme nt for consistency across Medicaid HCBS programs. Based on multiple comments and the acknowledgement that additional policy work is necessary to maximize the extent to which consistency can exist across the Medicaid programs as it relates to assessm ents for HCBS programs, we revised the assessment requirements to reflect the broad requ irements in statute. Our intent is torequire any finalized universal core elements that are devel oped to be incorporated into the assessment of functional n eed for CFC and other HCBS assessments as determined by CMS. We also appreciate the commenters’ sugge stions regarding standard sets of quality measures. As noted, we are presen tly working with stakeholders to better understand the most effective and efficient me thod to assure the health and welfare of individuals with long term se rvices and support needs, a nd to maximize quality across Medicaid HCBS authorities. For the purposes of this regulation and the implementation of CFC, we have revised the quality assu rance system requireme nts to more closely reflect the requirements included in statute.
Comment : One commenter asked what th e expectation is for measuring individuals’ outcomes associatedwith the receipt of communi ty-based attendant services and supports, particularly for the health and welf are of recipients of the service as stated at §441.585(a)(2). The commenter asked if this is a major evaluation element or if it could be satisfied with a survey. The co mmenter voiced concern that a broad-based assessment of need that includes elements over and above what is offered in the personal care program’s purview may negatively impact the ability of States to develop and measure individual outcomes. Response : As noted above, individual outco mes are an important component to consider in terms of quality improvement a nd quality assurance, pa rticularly as they relate to the services and supports provide d under CFC. For these outcome measures being tied to assessment elements or the ach ievement of individual outcomes and goals expressed in the service plan, we expect that States’ quality assurance systems will utilize the information present in service pl ans to inform how needs are being met acrossthe program and to see where improvements need to be made. This information will also be a major component in the evaluation of CFC. States will need to describe how they plan to capture these outcomes in their qualityassurance system. With regard to the commenter’s concern regarding the assessm ent of need including elements over and above what is offered under CFC, as men tioned earlier, the assessment portion of the regulation has also been revised, as has the person-centered planning section, to remove the specified elements that went beyond the services and supports available under CFC. However, it is important to reiterate that our intent is to require any finalized universal core assessment elements that are developed to be incorporated into the assessment of functional need for CFC and other HCBS assessments as determined by CMS.
Comment : One commenter indicated that the proposed rule deferred too much to States, was too vague to provi de adequate protection for Me dicaid beneficiaries, and did not incorporate the monitori ng function that section 2401 of the Affordable Care Act included as a requirement for a State’s qua lity assurance system. The commenter recommended more prescriptive requirements for this function. Response : We believe that the monitoring function was incorporated. Several protections for individuals are required under th e quality assurance system, and the system as a whole must continuously monitor the quality of the program and incorporate feedback from key stakeholders. However, as mentioned above, we are continuing the work to determine quality approaches for util ization across Medicaid HCBS authorities. Therefore, for the purposes of this regulati on and the implementation of CFC, we have revised the quality assurance system re quirements to more closely reflect the requirements included in statute. Secti on 441.585(a)(2) now indicates that the quality assurance system must monito r the health and welfare of each individual who receivedCFC home and community-based attendant serv ices and supports, in cluding a process for the mandatory reporting, investig ation, and resolution of allegati ons of neglect, abuse, or exploitation in connection withthe provision of community-bas ed attendant services and supports. Comment : One commenter noted that the data collection and quality assurance system should not be burdensome on consumer s and they should not be surveyed every month with a lot of questions that get into unnecessary de tail or invade the person’s privacy. Response : We agree with the commenter.
Comment : Several commenters commended the inclusion of the examples of measures in the preamble, including functi onal indicators and indi vidual satisfaction. One commenter added that the perspective of service recipients and advocates will be critically important in making de terminations as to “quality,” particularly as it pertains to personal goal and outcome achievement. Response : We believe that individual outco mes are an important component to consider in terms of quality improvement and quality assurance, pa rticularly as they relate to the services and supports provided unde r CFC. With regard to the perspective of individuals and advocates as referenced in the comment, States’ quality assurance systems must also incorporate stakeholder feedback to improve the quality of the services offered under CFC. These aspects of CFC, along with the Development and Implementation Council, demonstrates the impor tance of the individu al’s perspective as it relates to services and suppor ts provided under the program.Comment : One commenter asked CMS to clarif y whether a State can delegate its quality assurance responsibilities to an outside entity while retaining ultimate responsibility, or if the State is requi red to facilitate these functions. Response : States continue to ha ve the flexibility to desi gn their quality assurance programs as long as all of the requirements in cluded in the regulation for CFC are met. A State will need to determine whether they want an entityoutside the State to be responsible for meeting this requirement.
Comment : A few commenters voiced concer n about the complexity of the proposed quality assurance system , pointed out that it is very similar to that for the section HCBS 1915(c) waiver programs, and refere nced a previous letter they had sent to CMS that stated: “The growing demands on States to implement increasingly complex quality management systems and improvement strategies are problematic because they: (a) deviate significantly from the original intent of the quality initiati ve, that is, that CMS would review State systems of quality rather than monitor activities at the level of the individual beneficiary, (b) extend beyond the expectation specific inthe HCBS Waiver Application Version 3.5 and related guidance, an d (c) are being placed on States at a time when their fiscal and human resources are di minishing.” Another commenter referenced this letter and asked that CMS clarify exp ectations regarding how section 1915(k) quality assurance is similar or dissimilar to secti on 1915(c) quality improve ment, with specific attention paid to individual outcome measures and remediation activitylevel of detail. Response : As noted earlier, based on the f eedback received during this process and the direction of ongoing work at CMS to develop a quality strategy that can be utilized to the extent possible across the Me dicaid programs, we are revising this portionof the regulation to more closely align withthe quality assurance system requirements included in statute.
Comment : One commenter indicated that th e proposed language is similar to quality assurance in HCBS waivers, which th ey believe is unsatisfactory because it has few, if any, quality of care standards, and is based on quality indica tors that may or may not be meaningful and do not give guidance to consumers when ther e is a dispute about how services are to be provided. The co mmenter added that the quality assurance process seems to be hidden from consumers and that the data seems to be almost exclusively viewed by the State and CMS, withlittle or no involvement from consumers. The commenter recommended that information from the quality assurance process be shared with stakeholders, including bu t not limited to consumers and their representatives. Response : As mentioned above, we have re vised the quality assurance system requirements to more closely align with the quality assurance system requirements included in statute. We have maintained the language that requi res outcome measures associated with the receipt of community -based attendant services and supports, particularly for the health and welfare of reci pients of this service. States may use a number of quality of care measures to m eet that requirement. We also point the commenter to the final rule at §441.585(b), which requires that the quality assurance system employ methods that maximize cons umer independence and control and will provide information about the provisions of quality improvement and assurance to each individual receiving such se rvices and supports, and §441.585(c) , which requires that the State elicit and incorpor ate feedback from individuals and their representatives, disabilityorganizations, providers, families of disabled or elderly individuals, members of the community, and others to improve the quality of CFC.
Comment : One commenter indicated that th e quality improvement strategy needs to involve consumer and stak eholder input, and that measurements and remediation needs to consider the convenience to the consumer and their ability to unde rstand the process, and not impinge unduly on consumer directi on while improving service delivery. The commenter added that the Development and Implementation Council needs to be directly involved in monitoring and making program changes to implement quality improvement strategies. Several other comme nters indicated that in additi on to stakeholder feedback received through the Council, feedback from consumer sa tisfaction surveys and other means should be included in the quality assu rance system and should be included in the rule. Another commenter urged CMS to clarif y that feedback from aging organizations should also be incorporated in the quality assurance system. Response : We point the commenter to th e final rule at §441.585(b), which requires that the quality assu rance system employ methods that maximize consumer independence and control, and will provide information about the provisions of quality improvement and assurance to each individua l receiving such servic es and supports, and §441.585(c), which requires that the State e licit and incorporat e feedback from individuals and their representatives, disa bility organizations, providers, families of disabled or elderly individuals, members of the community, and others to improve the quality of CFC. We expect that States w ill include the feedback of the Development and Implementation Council as part of this requi rement as the membership of the Council will include many of the individuals speci fied at §441.585(c). We agree with the commenter that consideration should be give n to the methods that involve individuals’feedback. We agree that surveys may be a useful component with which to gain feedback, but caution that this process not be overly complicated or burdensome for individuals.
Comment : One commenter asked that CMS clar ify expectations for incorporating stakeholder feedback that may conflict with Federal regulations or State policy direction as defined in State statute, or drive increased expenditures for which a State lacks funding appropriation. Response : The requirement at section 1915(k)(3 )(D)(ii) of the Act, which we proposed to implement at §441.585(b), require s that the quality assurance system incorporate feedback from consumers and thei r representatives, disa bility organizations, providers, families of disabled or elderly individuals, members of the community, and others. We are interpreting the use of the wo rd “incorporate” to mean that feedback from these key stakeholders must be considered, but we do not expect that States must make changes based on each and every suggestion rece ived. Should feedback received be in conflict with Federal regulations, States w ould not be expected to incorporate that feedback, in terms of making changes to the program, as Federal regulations must be adhered to for a State to be in compliance w ith such regulations. If feedback received was in conflict with State policy direction, as defined in State statute, or would drive increased expenditures for which a State l acks funding appropria tion, the State would need to make a choice as to whether to consider it.
Comment : One commenter asked to what extent a State must “maximize consumer independence and control” as described at §441.585(a)(4), asked for an example of what this means and what CMS’ in tent is with this language. The commenter asked for confirmation that this is all within the confines of the i ndividual’s health needsand requested that if this is the case that CMS include additional language to make this clear. Response : The statute and this regulation f acilitate the ability for States to maximize individual independence and control throughout the CFC benefit, as illustrated by the inclusion of the language related to self-direction and pers on-centered planning, the Development and Implementation C ouncil, and the stak eholder feedback requirements for the quality assurance system. While we do not set a minimum or maximum threshold that States must m eet in terms of maximizing consumer independence and control, we expect that States make every effort to meet these requirements.
Comment : Multiple commenters recommended that the language at section 1915(k)(3)(D)(ii) of the Act be used at paragraph (b) Stakehol der feedback, instead of the term “key stakeholders.” Response : We appreciate the commenters’ suggestion and have revised the language to include each entityspecified in the statute.
Comment : Several commenters stated that at paragraph (a)(2), the regulation applies the statutory requirement regardi ng reporting and investigation of abuse and neglect. The commenters commended the c onnection of abuse and neglect reporting to quality of care measures, but believed that the statute (at section 1915(k)(3)(D)(iii) of the Act) applies the requirement more broadly thanto the more limited subpart of “Quality of care measures” specified in pa ragraph (a)(2). The commenters recommended that it be more broadly set forth as an independent re quirement under the quali ty assurance system. Response : As mentioned above, we have re vised the quality assurance system requirements to more closely align with the quality assurance system requirementsincluded in statute. As such, §441.585 of the fina l rule is clear that this function applies more broadly than to the proposed limited subpart of “quality of care measures.” Upon consideration of th e public comments receive d, we are finalizing §441.585 with revision, to more closely mirror the quality assurance requirements specified in

statute. T. Increased Federal Fina ncial Participation (§441.590) We proposed that beginning October 1, 2011, the FMAP applicab le to the State will be increased by 6 percentage points fo r the provision of CFC home and communitybased attendant services, under an approved State plan amendment.
Comment : One commenter expressed concern that since States will receive 6 percentage point increase in FMAP for cost s associated to the program, it would seem shortsighted for a State not to take advant age of this opportunity to expand communitybased services which will d ecrease the amount of money ne eded for institutional care. Response : We appreciate the commenter’s perspective.
Comment : Many commenters indicated that St ates should be permitted to receive the enhanced FMAP provided in CFC concurre ntly with receiving other HCBS enhanced match rates such as those authorized by the Money Follows the Person Rebalancing Demonstration and the Balancing Incentive Payments Program. Response : We acknowledge the potential for States to receive enhanced FMAP under more than one program, and are willing to provide technical a ssistance to States interested in doing so.
Comment : One commenter requested clarific ation regarding how CFC services would work in conjunction with similar efforts already under way to transition individuals from skilled nursing facilities to a home and community-based setting, suchas section 1915(c) waivers and MFP. The co mmenter asked if waiver participants would be able to access CFC services and if so, whether the additional FMAP would apply to MFP or waiver services. Response : The enhanced FMAP applies to services authorized under the CFC program, but there is no prohi bition on individuals receivi ng services th rough a section 1915(c) waiver or MFP program also receiving services through CFC.
Comment : One commenter stated that this provision needs to be strong enough to encourage State participation and should be seen as an ince ntive for States to comply with the Olmstead Integration Mandate. The commenter indicated that it should not preclude other forms of enforcement of the law. Response : We agree with the commenter, and believe that the 6 percentage point increase in Federal match provides incentives to the States to provide CFC to eligible individuals. This provisi on does not preclude other forms of enforcement of the Olmstead decision.
Comment : Several commenters asked for clarif ication pertaining to what services and expenditures would be eligible for in creased FMAP. One of these commenters requested that CMS clarify whether increased FFP is available for activities that support the delivery of “home and community-based attendant services” in context of CFC requirements. Two commenters requested that the enhanced reimbursement rate also be applied to assessments. One of these comme nters further requested that CMS cover the coordination of the person-centered plan at the enhanced FMAP rate. Another commenter stated that their understanding is that attendant care would be eligible for the enhanced FMAP, and inquired whethe r additional services such as necessary case management or support brokerage servi ces, administrative costs related toimplementation of a fiscal agent structure, vo luntary training for serv ice participants, and the implementation of quality improvement mechanisms would be covered. One

commenter requested clarification of the range of services eligible for the enhanced FMAP rate other than attendant services, su ch as case management, training, or personal agents. One commenter requested that CMS clarify that the additional 6 percent FMAP would be applied to all services qualif ying under CFC. This same commenter encouraged CMS to clarify that the 6 per cent additional FMAP applies to the entire package of services to anyone qualified to re ceive them, not just those who are newly in receipt of attendant care services and s upports provided under CFC. This commenter also asked whether a Personal Emergency Response System (PERS) would also qualify for enhanced reimbursement. Response : The authorizing legislation indica tes that the additional 6 percentage points in FMAP applies to CFC services and supports. We are inte rpreting “services and supports” broadly in this context, to include not only the services referenced at §441.520 (“Included services”) , but also some of the activities referenced in the comments described above. Specifically, activities requ ired by CFC that are performed for specific individuals, such as assessments, person-cen tered planning, support system and Financial Management Services will receive an additiona l 6 percentage points to the State’s service match rate. Activities required by CFC that are done for the operation of the program in general, such as quality management, data collection, implementation of the Development and Implementation Council, and administrative costs related to implementation of a fiscal agent structure will not receive an a dditional 6 percentage points as they are administrative activities and are only eligible for the standard federal administrative matching rate of 50 pe rcent available at §433.15(b)(7).Comment : One commenter stated that CMS should ensure that the “and supports” is added to the end of “home and community-based attendant services” to be consistent with the terminology in the statute. Response : We agree with this commenter a nd will add “and supports” to the end of “home and community-based a ttendant care services” in §441.590.
Comment : One commenter requested that CM S clarify its expectations on how these services and expenditures are to be tracked to appropriately draw the higher FMAP. The commenter asked whether CMS will revise the CMS-64 form to reflect this State plan option. Response : The CMS-64 form has been modified to include a new CFC line item.
Comment : Two commenters supported the 6 percent increase in FMAP, hoping that this will encourage St ates to select this option. Response : We appreciate the perspectives these commenters had in support of this provision of the rule.
Comment : Two commenters requested conf irmation of the duration of the 6 percent FMAP increase. Response : There is no time limit attached to the FMAP increase. The 6 percentage point increase in FMAP is availabl e to States for as l ong as States choose to provide services and su pports under CFC.
Comment : One commenter asked if the enhanced Federal match is available if a State decides to implement late r than October, 2011 to coor dinate implementation efforts with other efforts connected to Affordable Care Act.Response : The enhanced FMAP becomes ava ilable to a State upon the effective implementation date of their approved SPA fo r CFC, regardless of whether this date occurs after October 1, 2011.
Comment : One commenter suggested that a portion of the increased Federal financial assistance that Stat es receive be invested in workforce compensation, and investment that has been shown to improve r ecruitment and retention and thus quality of

care. Response : States will continue to have fl exibility with determining how they utilize the increased Federal funds that they will receive with the 6 percentage point enhanced match. Upon consideration of th e public comments receive d, we are finalizing §441.590 with revision, to reflect th at the enhanced match is available for CFC “home and community-based attendant services and supports.” III. Provisions of the Final Regulations Generally, this final regulation incorpor ates the February 25, 2011 provisions of the proposed rule. We have outlined in sec tion II of this preamble the revisions in response to the public comments. The provisions of this final regula tion that differ from the proposed rule are as follows:

● At §441.505 we have revised the fo llowing definitions: agency-provider model, backup systems and supports, individu al representative, other models, Selfdirected . This section has also been revise d to add two new definitions: individual, Selfdirected model with service budget.

● We have revised §441.510 to set forth th e requirement that all individuals that meet an institutional level of care, allow fo r State administering agencies to permanentlywaive the annual level of care recertification if certain conditions are met and clarify income requirements

● We have revised §441.515 to combine (b) and (c) to more directly align with the statute.

● We have revised §441.520 to rename it “Included services” to align with the statute. We have revised §441.520( b) to clarify that (b)(1) an d (2) that follow are both at the State’s option, and to add the language from proposed 441.520(b )(3) ”linked to an assessed need or goal identified in the individual’s person-cent ered service plan” into the introductory section so that it is clear it applies to both (b)(1) and (2).

● We have revised §441.530 to remove the proposed home and communitybased settings criteria. This section is now reserved for future use.

● We have revised §441.535 to add the abilit y for States to meet the face-to-face requirement through the use of telemedicine or other information technology medium if the certain conditions are met. We al so added a new requirement at §441.535(d) indicating “Other requirements as determined by the Secretary.”

● We have revised §441.540 to add a new requirement that the service plan require an assurance that the setting in whic h the individual resides is chosen by the individual, and to require a description of the setting a lternatives avai lable to the individual from which to choose. The pr oposed text at §441.540(b)(1) through (5) all shifted down by one number. We added re quirements for administering the personcentered service plan. We al so relocated some of the pr oposed rule language to the Support System section at §441.555.

● We have revised §441.545 expand the types of arrangements that may exist under the Agency provider model, to clarif y the authority indivi duals have in theselection and dismissal of th eir service providers, to clar ify the responsib ilities of the Financial management entity and to add “Other service delivery model” as an additional service delivery model to allow States the option of proposing alternate delivery models for consideration.

● We have revised §441.550(e) to specify that determining the amount paid for services should be “in accordance with St ate and Federal compensation requirements”.

● We have revised §441.555 to specify th at support system activities must be available to all individuals regardless of the service deliverymodel; We also revised the requirements under this section to ad d additional benefi ciary protections.

● We have revised §441.560(a)(3)(i), re placing the phrase “change the budget” with “adjust amounts allocated to specific services and s upports within the approved service budget.”

● We have revised §441.560 to make technical corrections

● We have revised §441.565 to clarify which requirements apply to which service delivery model.

● We have revised §441.570 to clarify th at this includes as suring the State’s adherence to section 1903(i) of the Act that Medicaid payment shall not be made for items or services furnished by individuals or entities excluded from participating in the Medicaid Program. We also clarified that the Maintenance of Existing Expenditures requirements described at §441.570( b) pertains to the first full 12 months in which the CFC State plan amendment is implemented, and is limited to the expenditures for home and community-based attendant services and supports provided under sections 1115, 1905(a), 1915, or otherwise, under the Act, to individuals with disabilities or elderly individuals attributable to the preceding 12-month period.● We have revised §441.575 to align w ith the statutory requirement that a majority of the Council be comprised of indivi duals with disabilities, elderl y individuals, and their representatives.

● We have revised §441.580 adding additi onal requirements for States to capture data on the impact of CFC services and suppor ts on the physical and emotional health of individuals and other data as determined by the Secretary.

● We have revised §441.585 to more closely align with requirements set forth in

statute. V. Collection of Information Requirements We solicited public comment on each of the issues for the following sections of this document that contain information co llection requirements (ICRs). We received several public comments on specific sections contained in the ICRs. The comments and our responses follow: A. Assessment of Functional Need (§441.535) Section 441.535 requires States to conduc t a face-to-face a ssessment of the individual's needs, strengths, preferences, and goals for the servi ces and supports under CFC. States may use one or more processe s and techniques to obtain this information about an individual. In §441.535(a)(1), the St ate must define the provider qualifications for health care professionals to use tele medicine or other information technology mediums for the assessment. In §441.535(a)(3), the State must obtain informed consent from the individual to use telemedicine or other information technology mediums for the assessment. In addition to the initial assessment, St ates are required to conduct reassessments at least ev ery 12 months (§441.535(c)). The burden associated with the re quirements under §441.535 is the time andeffort it would take to conduct a face-to-f ace assessment of each individual's needs, strengths, preferences and goals for the se rvices and supports under CFC. While this requirement is subject to the PRA, only a few States have ex pressed potential interest. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe that it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The one-time burden associated with th e requirements under §441.535(a)(1) is the time and effort it would take the respondents to define th e provider qualifications for health care professionals. While this requireme nt is subject to the PRA, only a few States have expressed potential intere st. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe th at it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The burden associated with the requir ements under §441.535(a)(3) is the time and effort it would take the responde nts to obtain informed consen t from the individual to use telemedicine or other information technology mediums for the assessment. While this requirement is subject to the PRA, only a few States have ex pressed potential interest. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe that it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The burden associated with the requir ements under §441.535(c) is the time and effort it would take the respondents to conduc t reassessments at le ast every 12 months. While this requirement is subject to the PRA, only a few States have expressed potential interest. Therefore, based on our informal di scussions with States after the publication ofthe proposed rule, we believe that it would aff ect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).
Comment : Several commenters recommended that CMS revisit the time estimates for the assessment of functional need and r eassessment of need. The commenters had concerns regarding the one hour estimate provided in proposed rule stating that an assessment could take up to th ree hours. The commenters added that this estimate also does not include travel time or the time necessary to analyze the information. It was also noted that while a reassessment may take less time than an initial assessment, it still would take up to two hours to perform. Response : Our estimates are based on the average time it may take for States to complete the assessment. This average woul d take into account the fact that some assessments may take less than one hour while some may take more than 1 hour. We do not believe the estimate of 1 hour to comple te a face-to-face interview to be unreasonable and did not receive overwhelming public comment to indicate otherwis e. Therefore, we have not revised the collection of information estimate. B. Person-Centered Service Plan (§441.540) Section 441.540 requires the State to c onduct a person-centered planning process resulting in a person-centere d service plan (§441.540(b)), based on the assessment of functional need (§441.535), in collaboration with the indivi dual and the individual’s authorized representative, if applicable. This service plan must be agreed to in writing by the individual and signed by all individua ls and providers responsible for its implementation. In addition, States must provi de a copy of the plan to the individual and anyone else responsible for the pl an. In addition to the initia l plan, States are required to review the plan at least every 12 months (§441.540(c)).The burden associated with the requir ements under §441.540(b) is the time and effort it would take to develop and finalize a written person-centered service plan for each individual, and to provide each individual and anyone else responsible for the plan a copy of that plan. While this requirement is subject to the PRA, only a few States have expressed potential interest. Therefore, ba sed on our informal discussions with States after the publication of the proposed rule, we believe th at it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The burden associated with the requir ements under §441.540(c) is the time and effort it would take respondents to review each person-centered service plan at least every 12 months and revise, when necessary. While this requirement is subject to the PRA, only a few States have expressed pot ential interest. Ther efore, based on our informal discussions with States after the publication of the propos ed rule, we believe that it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).
Comment : Several commenters recommended that CMS revisit the time estimates for development of the service plan. Several commenters stated that the CMS estimate of 2 hours to develop and finalize a se rvice plan was too short. The commenters indicated that 2 hours is needed to develop the plan with an additional 2 hours, at minimum, to finish the plan. They adde d that the overall development of a personcentered plan, including administrative tasks, could take up to 5 hours. Response : Our estimates are based on the average time it may take for States to complete the requirements related to §441.540-Person-centered Service plan. This average would take into account the fact th at some of these components may take lessthan the estimated time while some may take more than we estimated. We estimated a total of 3.5 hours on average. We do not believ e that this estimate is unreasonable and did not receive overwhelming public comment to indicate otherwise. Therefore, we have not revised the collection of information estimate. C. Service Models (§441.545) Section 441.545 requires the State to choose one or more service delivery models for providing home and community-based attendant servic es and supports. Under the agency-provider model for CFC, in §441.545(a)(1), the State Medicaid agency or delegated entity, must enter into a contract or provider agreement with the entity providing the services and supports. Under the self-directed m odel with service budget, in§441.545(b), the individual must be provided with a service budget ba sed on the assessment of functional need. States must provide additional counseling, information, training, or assistance to individuals who have demonstr ated that they cannot effectively manage the cash option described in §441.545(b)(2)(iii). They must also provide the individual with the conditions under which the State would requ ire an individual to use a financial management entity (§441.545(b)(2)(iv)). In §441.545(c), States have the option of proposing other service delivery models which must be defined by th e State and approved by CMS. The burden associated with the requir ements under §441.545(a)(1) is the time and effort it would take to enter into a contra ct or provider agreement with the entity providing the services and supports . While this requirement is subject to the PRA, only a few States have expressed potential interest. Theref ore, based on our informal discussions with States after the publication of the proposed ru le, we believe that it wouldaffect less than 10 entities on anannual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The burden associated with the requir ements under §441.545(b) is the time and effort it would take the respondents to deve lop person-centered serv ice plans and service budgets. While this requirement is subject to the PRA, we believe that it would affect less than 10 entities on an annual basis; th erefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The burden associated with the requir ements under §441.545(b)(2) is the time and effort it would take the respondents to provide additional counseling, information, training, or assistance to individuals who have demonstrat ed that they cannot effectively manage the cash option and provi de that individual with th e conditions under which the State would require an individual to use a financial management entity. While this requirement is subject to the PRA, only a few States have ex pressed potential interest. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe that it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).
Comment : One commenter was concerned that the State burden will vary depending on the service model. The comment er indicated that implementing the “self directed model with service budget” would crea te additional burden fo r the State and that a State would view the complexity of mana ging self-directed serv ice budgets with new service features such as direct cash, vouche rs, and training to support consumers with the full employer responsibility, as a si gnificant additional burden. Response : We appreciate the commenter’s pe rspective. It is difficult to accurately estimate the total burden associated with any one of these models, as it woulddepend on the number of models a State chos e to offer. While we acknowledge the additional burden that a State may have if th ey do not already offer such a model that could be leveraged to meet the requirements of CFC, we did not receive any estimates or additional comments that provide any compe lling information to modify this section. Therefore, we will not be revising this collection of information estimate. D. Support System (§441.555) For each service delivery model describe d under §441.545, States must provide or arrange for the provision of a support system to: appropriately a ssess and counsel an individual or the individual’s representative, if applicab le, before enrollment (§441.535); provide appropriate information, counseling, tr aining and assistance to ensure that an individual is able to manage the services and budgets (if applicab le) (§441.545); establish conflict of interest standards for the asse ssments of functional need and the personcentered service plan developm ent process that apply to a ll individuals and entities, public or private (§441.540); and ensure that the responsibilities for assessment of functional need and person-cen tered service plan developm ent are identified (§§441.535 and 441.540). In §441.555(b), States must specify in thei r State plan any tools or instruments used to mitigate identified risks. The one-t ime burden associated with the requirements under §441.555(b) is the time and effort it w ould take to amend their State plan by specifying any tools or instruments used to mitigate any identified risks. While this requirement is subject to the PRA, only a few States have ex pressed potential interest. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe that it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).Comment : One commenter indicated that designing and implementing a support system that appropriately assesses and counsel s an individual before an assessment, as well as providing information counseling, trai ning, and assistance to the individual will require significant effort. Response : We appreciate the commenter’s perspective and agree that the requirements will require State effort. We did not receive any estimates or additional comments that provide any compelling informati on to modify this section. Therefore, we will not be revising this collection of information estimate. E. Service Budget Requirements (§441.560) For the self-directed model with a service budget, the St ate is required to develop and approve a service budget that is base d on the assessment of functional need and person-centered service plan and must in clude all of the requirements in §441.560(a)(1) through (a)(6). In addition to developi ng a service budget, the methodology used to determine an individual’s service budge t amount must meet the requirements in §441.560(b) and must be included inthe State plan (§441.560(b)(3)). In §441.560(c), the State must have procedures in place that will provide safeguards to individuals when the budgeted service amount is insufficient to meet the individual’s needs. In §4 41.560(d), the State must have a method of notifying individuals of the amount of any limit that applies to an individual’s CFC services and supports. In §441.560(f), the State must have a procedure to adjust a budget when a reassessment indicates a change in an i ndividual’s medical condition, functional status, or living situation. The burden associated with the requir ements under §441.560(a) is the time and effort it would take to develop and approve each service budget. While this requirementis subject to the PRA, only a few States have expressed potential in terest. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe that it would aff ect less than 10 entities on an a nnual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The one-time burden associated with the requirements under §441.560(b) is the time and effort it would take the respondents to develop a methodology used to determine an individual’s service budget amount and in clude that methodology in the State plan. While this requirement is subject to the PRA, only a few States have expressed potential interest. Therefore, based on our informal di scussions with States after the publication of the proposed rule, we believe that it would aff ect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The one-time burden associated with the requirements under § 441.560(c), (d), and (f) is the time and effort it would take the respondents to develop: procedures that will provide safeguards to individuals when th e budgeted service amount is insufficient to meet the individual’s needs, a method for notif ying individuals of the amount of any limit that applies to an individual’s CFC servic es and supports, and a procedure to adjust a budget when a reassessment indicates a change in an individual’s medical condition, functional status, or liv ing situation. While this requirementis subject to the PRA, only a few States have expressed potential interest. Theref ore, based on our informal discussions with States afte r the publication of the proposed rule, believe that it would affect less than 10 entities on anannual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). An additional burden associated with the requirements under §441.560(d) is the time and effort it would take the respondents to develop a nd distribute each notice thatspecifies the amount of any limit for the indi vidual’s CFC services and supports. While this requirement is subject to the PRA, only a few States have expressed potential interest. Therefore, based on our informal di scussions with States after the publication of the proposed rule, we believe that it would aff ect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).
Comment : One commenter believed that is w ould take far more than 16 hours to develop communicate, test, and finalize budget procedures with input from interested parties and intradepartmental reviews. Response : We acknowledge the commenter’s concern, however, the development requirement imposed is a onetime burden that wi ll vary by State. We believe that the 16-hour estimate is an accurate reflection of the average time a State would take to develop their procedures. We did not receiv e any estimates or additional comments that provide any compelling information to modify this section. Therefore, we will not be revising this collection of information estimate. F. Provider Qua lifications (§441.565) For the agency provider mode l of CFC services and suppor ts, States must develop system safeguards that include written adequ acy qualifications for pr oviders. In certain circumstances, this requiremen t may apply to other models. The one-time burden associated with the requirements under §441.565(b) is the time and effort it would take to develop wr itten adequacy qualifica tions for providers. While this requirement is subject to the PRA, only a few States have expressed potential interest. Therefore, based on our informal di scussions with States after the publication of the proposed rule, we believe that it would aff ect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).Comment : One commenter believed that 16 ho urs to develop system safeguards, including written adequacy qua lifications for providers, was significantly insufficient. The commenter noted that the identificati on, analysis, and development of provider qualifications together with executing regulat or or contractual mechanisms to control and/or oversee the risk in the individual’s environment will require more than 16 hours to complete. Response : We disagree that 16 hours to develop system safeguards is insufficient. Our estimates are based on the av erage time it may take for States to fulfill these requirements. This would include Stat es who may only have to slightly modify qualifications that are already in place and States who would have to create new qualifications. We did not receive any estimat es or additional comme nts that provide any compelling information to modify this secti on. Therefore, we will not be revising this collection of information estimate. G. Development and Implementation Council (§441.575(b)) States are required to establish a Deve lopment and Implementation Council, and must consult and collaborate with the Counc il when developing and implementing a State plan amendment to provide home and community -based attendant serv ices and supports. The burden associated with the requir ements under §441.575(b) is the time and effort it would take to consult and collaborate with the Council when developing and implementing a State plan amendment to pr ovide home and community-based attendant services and supports. While this requirement is subject to the PRA, only a few States have expressed potential intere st. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe th at it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5CFR 1320.3(c). H. Data Collection (§441.580) Section 441.580 requires States to provide specified information regarding the provision of home and community-based atte ndant services and s upports under CFC for each Federal fiscal year for which such services and supports are provided. The burden associated with the re quirements under §441.580 is the time and effort it would take to provide specified info rmation regarding the pr ovision of home and community-based attendant services and supports for each fiscal year for which such services are provided. While th is requirement is subject to the PRA, only a few States have expressed potential intere st. Therefore, based on our informal discussions with States after the publication of the proposed rule, we believe that it would affect less than 10 entities on an annual basis; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).
Comment : Many commenters expressed concer ns pertaining to the estimated annual burden associated with th e data collection requirement. Response : We have implemented data colle ction requirements as they were specified in the statute. We disagree that the annual burden will be significantly more than estimated. While some States may need to revise their data collection systems, we do not believe that this will affect all Stat es. Additionally, since much of this data collection is also a requirement under other authorities, we believe that States have the mechanisms in place to gather the requestedinformation for reporting without excessive additional burden.
Comment : One commenter believed that the data collection requirements set forth in the proposed regulati ons are reasonable. However, the commenter believed thatthe burden of the requirement to estimate th e number of individuals served by type of disability, education level, and employment status in their St ate prior to the first fiscal year will be significant because it will lik ely require a manual effort from disparate sources. The commenter stated that once ot her major projects involving automation are implemented, the requirement for reporting in future years will become far less burdensome. Response : We appreciate this comment and the time that it may initially take States to set up systems to captu re the required information. We agree that th e initial data collection effort could be significant; however, as systems are put in place to capture this data we are confident that the time associated with data collection will be significantly reduced.
Comment : One commenter believed that th e requirement to report whether specific individuals were previously served in other programs or wa ivers is significant because it requires the devel opment of ad-hoc reporting and report validation system which is not currently produced. The commen ter stated that the estimated annual burden associated with this requirement will be significantly more than 24 hours or $576 per State for the initial year. Response : We appreciate this commenter’s perspective. Our estimates are based on the average time it may take for States to fulfill these requirements. This would include States who may only have to slight ly modify or determine how to leverage current data collection methods and States th at would have to cr eate new methods or systems. We also believe th at some of the data required could be retrieved by a State’s MMIS. We did not receive any estimates or additional comments that provide anycompelling information to modify this secti on. Therefore we will not be revising this collection of information estimate.
I. Quality Assurance System (§441.585) Section 441.585(a) requires each State to es tablish and maintain a comprehensive, continuous quality assurance system, detail ed in the State plan amendment. In §441.585(b), States must provide informa tion about the provisions of quality improvement and assurance to each individua l receiving such servic es and supports. In §441.585(c), States must elicit and incorporat e feedback from individuals and their representatives, disability organizations, providers, families of disabled or elderly individuals, members of the community a nd others to improve the quality of the community-based attendant serv ices and supports benefit. The burden associated with the requir ements under §441.585(a) is the time and effort it would take to establish and main tain a comprehensive, continuous quality assurance system, detailed in the State plan amendment. While this requirement is subject to the PRA, only a few States have e xpressed potential interest . Therefore, based on our informal discussions with States af ter the publication of the proposed rule, we believe that it would affect less than 10 entities on an annual basi s; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The burden associated with the requir ements under §441.585(b) is the time and effort it would take the responde nts to provide information aboutthe provisions of quality improvement and assurance to each indivi dual receiving such serv ices and supports. While this requirement is subject to the PRA, only a few States have expressed potential interest. Therefore, based on our informal di scussions with States after the publication of the proposed rule, we believe that it would aff ect less than 10 entities on an annual basis;therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c). The burden associated with the requir ements under §441.585(c) is the time and effort it would take the respondents to elicit and incorporate feedb ack from individuals and their representatives, disability organi zations, providers, families of disabled or elderly individuals, members of the community and others to improve the quality of the community-based attendant serv ices and supports benefit. While this requirement is subject to the PRA, only a few States have e xpressed potential interest . Therefore, based on our informal discussions with States af ter the publication of the proposed rule, we believe that it would affect less than 10 entities on an annual basi s; therefore, it is exempt from the PRA in accordance with 5 CFR 1320.3(c).
Comment : One commenter believed that establishing and maintaining a comprehensive quality assurance system th at includes a continuous quality assurance system, quality improvement strategy, and measures for program performance will exceed 100 hours for development. The cost will also be more than $2,400 annually. Response : We appreciate this commenter’s perspective. Our estimates are based on the average time it may take for States to fulfill these requirements. This would include States who may only have to slight ly modify or determine how to leverage current quality assurance systems and States that would have to create new systems. We did not receive any estimates or additi onal comments that provide any compelling information to modify this section. Therefor e, we will not be revi sing this collection of information estimate. This document imposed information collec tion and recordkeepi ng requirements. Consequently, it was reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 35).VI. Regulatory Impact Analysis A. Statement of Need This final rule implements section 24 01 of the Affordable Care Act. The Secretary is to establish a new State plan option to provi de home and community-based attendant services and supports at a 6 per centage point increase in Federal matching payments for expenditures related to the prov ision of services under this option. Section 2401 of the Affordable Care Act, entitled “C ommunity First Choice Option,” adds a new section 1915(k) of the Act that allows Stat es, at their option, to provide home and community-based attendant services and supports under their State plan beginning October 1, 2011. B. Overall Impact We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (Sep tember 30, 1993), Executive Order 13563 on Improving Regulation and Re gulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)). Executive Orders 12866 and 13563 direct agenci es to assess all costs and benefits of available regulatory alterna tives and, if regulation is n ecessary, to select regulatory approaches that maximize net benefits (inc luding potential economi c, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both co sts and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated an"economically" significant rule, under sect ion 3(f)(1) of Executive Order 12866 and a major rule under the Congre ssional Review Act. Acco rdingly, the rule has been reviewed by the Office of Management and Budget. Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before i ssuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2012, that thres hold is approximately $139 million. Because this rule does not mandate State participati on in section 1915(k) of the Act, there is no obligation for the State to make any change to their Medicaid progr am. Therefore, we estimate this final rule will not mandate expenditures in the threshold amount of $139 million in any 1 year. Executive Order 13132 establishes certain requ irements that an agency must meet when it promulgates a final rule that imposes substantial direct requi rement costs on State and local governments, preempts State law, or otherwise has Federalism implications. As stated above, this final rule does not have a substantia l effect on State and local governments. This final rule is estimated to have an economic impact of $1.3 billion in fiscal year 2012, with the Federal and State sh ares reflecting $820 million and $480 million, respectively. The economic impact estimates pr esented in this final rule differ from those originally presented in the proposed rule, pr imarily due to the final rule revising §441.510 to require, that in order to receive CFC se rvices, all individuals, regardless of income, must be determined annually to m eet an institutional level of care.TABLE 1: Medicaid Costs for the Community First Choice Option (in $ millions) 1

FY 2012 FY 2013 FY 2014 FY 2015 FY 20162 Federal Medicaid $820 $1,060 $1,815 $2,585 $3,520

State Medicaid $480 $620 $1,061 $1,511 $2,058

This final rule provides States with additional flexibility to finance home and community-based services by establishing a new CFC Option at an increased FMAP for attendant services and supports. Because of th is enhanced flexibilit y, and the fact that a majority of States may already provide at tendant services and supports through optional medical assistance services in its Medicaid State plan, HCBS waiver programs or both, we anticipate that each Stat e will likely compare and decide which vehicle provides greater benefits and stability to their overall Medicaid program. As such, at this time it is very difficult to accurately predict how ma ny States will choose to adopt the CFC Option, and how a State’s election to exercise this option will influence other parts of its Medicaid program. However, for purposes of this RIA, we assume a gradual growth in the number of States adopting this option, so that, by FY 2016, 30 percent of eligible persons who would want this coverage w ould reside in States that offer it. C. Anticipated Effects 1. Effects on Medicaid Recipients We anticipate that a large number of Medi caid recipients will be affected. We believe the additional option to provide at tendant care services and supports at the

1 Figures are rounded to the nearest $1 million and as sume increased State participation per fiscal year. 2 The proposed rule included cost estimates for FY 2012 through FY 2015. The cost estimates in this final rule are for FY 2012 through FY 2016.increased FMAP will likely have significant positive effects on Medicaid recipients, particularly on their demand for these services . We anticipate that the provisions of the final rule will likely increase State and local accessibility to services that augment the quality of life for individual s through a person-centered pl an of service and various quality assurances, all at a pot entially lower per capita costrelative to alternative caresettings. 2. Effects on other Providers We anticipate that this final rule will increase the demand for attendant care services and supports. We believe this effect will be beneficial to providers, particularly providers of attendant care services and s upports. Additionally, if the increase in demand for such services is sufficient, the number of providers of such services may increase. 3. Impact on Small Entities The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a signi ficant impact on a substantial nu mber of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hosp itals and most other health care providers and suppliers are small entities, either by be ing nonprofit organizations or by meeting the SBA definition of a small business and having revenues of less than $7 million to $34.5 million in any 1 year. (For details, see the Small Business Administration's Table of Size Standards at http://www.sba.gov/sites/default/ files/Size_Standards_Table.pdf .) Individuals and States are not included in the definition of a small entity. We are not preparing an analysis for the RFA because the Secretary has determined that this final rule does not have a significant impact on a substantial number of small entities.In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the opera tions of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of th e Act, we define a small rural hospital as a hospital that is located outside of a metr opolitan statistical area and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because the Secretary has determined that this final ru le will not have a si gnificant impact on the operations of a substantial number of small rural hospitals. 4. Effects on the Medicaid Program Expenditures Varying State definitions of personal car e services and rules concerning who may furnish them make it difficult to estimate accurately the potential increases in expenditures for States that choose to a dopt CFC under section 1915(k) of the Act. While we specifically solicited comments on the number of States th at were likely to participate in CFC, we received none. Table 1 above provides estimates of the an ticipated Medicaid program expenditures associated with furnishing attendant care services and supports. The estimates were made using various assumptions about increases in service utilization and costs, as well as assumptions about the induced utilization that may result from the CFC option. We have allowed for possible State incentives due to the increased FMAP rate, as well as for the possibility of savings due to beneficiaries being diverted from nursing facility use. D. Alternatives Considered In finalizing the policies set forth in th is rule, we reviewed all public comments submitted within the allowed time. We received a large number of comments on the proposed definition of home andcommunity-based settings. We met with Federal partners to discuss the concerns raised by public commenters. We also reviewed se veral documents and policy papers prepared by advocacy groups, independent policy groups, and other stakeholders for information on the types of settings personal attendant se rvices are provided in. Additionally, we looked to the Olmstead Decision and the ADA as the framework onto which we built our definition. After much discussion and consideration of the impact of each option discussed, we concluded that further discussion and c onsideration on this issue is necessary. Therefore, we are not finalizing the language proposed at §441.530. Rather, we will issue a new proposed regulation that will establ ish setting criteria for CFC developed as a result of the comments received. E. Accounting Statement As required by OMB Circul ar A-4 (available at: http://www.whitehouse.gov/sites/default/f iles/omb/assets/omb/circulars/a004/a-4.pdf ), we have prepared an accounting statemen t showing the classification of estimated transfers, benefits and costs associated w ith section 1915(k) servi ces offered by qualified providers in the Medicaid program, as a result of this final rule. TABLE 2: Accounting Statement: Esti mated Transfers, Benefits, and Costs (FYs 2012 to 2016) 3 Category TRANSFERS Annualized Monetized Transfers Year Dollar Discount Rate Period Covered
2012 7% 3% P rimary Estimate $1.87 Billion $1.92 Billion F Ys 2012-2016

3 The proposed rule included cost estimates for FY 2012 through FY 2015. The cost estimates in this final rule are for FY 2012 through FY 2016.From/To Federal Government to Medicaid Qualified Providers. Category TRANSFERS Year Dollar Discount Rate Period Covered 2012 7% 3% Annualized Monetized Transfers P rimary Estimate $1.09 Billion $1.12 Billion F Ys 2012-2016

From/To State Governments to Medicaid Qualified Providers. Category BENEFITS Qualitative Benefits The CFC option will increase State and local accessibility to services which in turn improves, through a person-centered plan of service with various quality assurances, the quality of lif e for individuals, and reduces the financial strain on States and Medicaid participants. Category COSTS Administrative Burden Costs The administrative burden costs are presented in the Paperwork Reduction Act section of this final rule.List of Subjects in 42 CFR Part 441 Aged, Family planning, Grant programs-h ealth, Infants and children, Medicaid, Penalties, Reporting and recordkeeping requirements.

The Centers for Medicare & Medicaid Se rvices amends 42 CFR Chapter IV as follows: PART 441--SERVICES: REQUIREM ENTS AND LIMITS APPLICABLE TO
SPECIFIC SERVICES 1. The authority citation for part 44 1 continues to read as follows: Authority: Sec 1102 of the Social Security Act (42.U.S.C 1302) 2. Part 441 is amended by adding subpart K to read as follows: Subpart K –- Home and Community-based Attendant Services and Supports State Plan Option (Community First Choice)
Sec. 441.500 Basis and scope. 441.505 Definitions. 441.510 Eligibility. 441.515 Statewideness. 441.520 Included services. 441.525 Excluded services. 441.530 [Reserved] 441.535 Assessment of functional need. 441.540 Person-centered service plan. 441.545 Service models. 441.550 Service plan requirements for self-d irected model with service budget. 441.555 Support system. 441.560 Service budget requirements. 441.565 Provider qualifications. 441.570 State assurances. 441.575 Development and Implementation Council. 441.580 Data collection.441.585 Quality assurance system. 441.590 Increased Federal financial participation. Subpart K –- Home and Community-based Attendant Services and Supports State Plan Option (Community First Choice) § 441.500 Basis and scope. (a) Basis . This subpart implements section 1915 (k) of the Act, referred to as the Community First Choice option (hereafter Community First Choice), to provide home and community-based attendant services and supports through a State plan. (b) Scope . Community First Choice is desi gned to make available home and community-based attendant serv ices and supports to eligible individuals, as needed, to assist in accomplishing activities of daily liv ing (ADLs), instrumental activities of daily living (IADLs), and health-related tasks th rough hands-on assistance, supervision, or cueing. § 441.505 Definitions. As used in this subpart: Activities of daily living (ADLs) means basic pers onal everyday activities including, but not limited to, tasks such as eating, toileting, groom ing, dressing, bathing, and transferring. Agency-provider model means a method of providing Community First Choice services and supports under which entities co ntract for or provide through their own employees, the provision of such services and supports, or act as the employer of record for attendant care providers selected by the individual enrolled in Community First Choice.Backup systems and supports means electronic devices used to ensure continuity of services and supports. These items ma y include an array of available technology, personal emergency response systems, a nd other mobile communication devices. Persons identified by an i ndividual can also be included as backup supports. Health-related tasks means specific tasks related to the needs of an individual, which can be delegated or assigned by licen sed health-care professionals under State law to be performed by an attendant. Individual means the eligible individual a nd, if applicable, the individual’s representative. Individual’s representative means a parent, family member, guardian, advocate, or other person authorized by the individual to se rve as a representative in connection with the provision of CFC services and supports. This authoriz ation should be in writing, when feasible, or by another method that clear ly indicates the indivi dual’s free choice. An individual’s representative may not also be a paid caregi ver of an individual receiving services and supports under this subpart. Instrumental activities of daily living (IADLs) means activities related to living independently in the community, includi ng but not limited to, meal planning and preparation, managing finances, shopping for food, clothing, and othe r essential items, performing essential household chores, co mmunicating by phone or other media, and traveling around and partic ipating in the community. Other models means methods, other than an agency-provider model or the self-directed model w ith service budget, for the provision of self-directed services and supports, as approved by CMS.Self-directed means a consumer controlled me thod of selecting and providing services and supports that allows the indi vidual maximum control of the home and community–based attendant serv ices and supports, with th e individual acting as the employer of record with nece ssary supports to perform that function, or the individual having a significant and meaningful role in the management of a provider of service when the agency-provider model is utilized. Individuals exercise as much control as desired to select, train, superv ise, schedule, determine dutie s, and dismiss the attendant care provider. Self-directed model with service budget means methods of providing self-directed services and supports using an individua lized service budget. These methods may include the provision of vouchers , direct cash payments, and/or use of a fiscal agent to assist in obtaining services. §441.510 Eligibility. To receive Community First Choice servic es and supports under this section, an individual must meet the following requirements: (a) Be eligible for medical as sistance under the State plan; (b) As determined annually-- (1) Be in an eligibility group under the State plan that in cludes nursing facility services; or (2) If in an eligib ility group under the State planthat does not include such nursing facility services, have an income that is at or be low 150 percent of the Federal poverty level (FPL). In determining whether the 150 percent of the FPL requirement is met, States must apply the same methodol ogies as would apply under their MedicaidState plan, including the same income disregar ds in accordance with section 1902(r)(2) of the Act; and, (c) Receive a determination, at least annually, that in th e absence of the home and community-based attendant se rvices and supports provided under this subpart, the individual would otherwise re quire the level of care furnis hed in a hospital, a nursing facility, an intermediate care facility for the mentally reta rded, an institution providing psychiatric services for individuals under age 21, or an institution for mental diseases for individuals age 65 or over, if the cost could be reimbursed under the State plan. The State administering agency may perman ently waive the annual recertification requirement for an individual if: (1) It is determined that there is no reasonable expectation of improvement or significant change in the individual’s condi tion because of the severity of a chronic condition or the degree of impairment of functional capacity; and (2) The State administering agency, or designee, retains documentation of the reason for waiving the annual recertification requirement. (d) For purposes of meeting the criteri on under paragraph (b) of this section, individuals who qualify for me dical assistance under the special home and communitybased waiver eligibility group defined at se ction 1902(a)(10)(A)(ii)(VI) of the Act must meet all section1915(c) requirements and r eceive at least one home and communitybased waiver service per month. (e) Individuals receiving services through Community First Choice will not be precluded from receiving other home and community-based long-term care services and supports through other Medicaid State plan, waiver, grant or demonstration authorities. § 441.515 Statewideness.States must provide Community First Choice to individuals: (a) On a statewide basis. (b) In a manner that provides such servi ces and supports in the most integrated setting appropriate to the indi vidual’s needs, and without regard to the individual’s age, type or nature of disability, severity of disability, or the form of home and community-based attendant serv ices and supports that the in dividual requires to lead an independent life. § 441.520 Included services. (a) If a State elects to provide Community First Choice, the State must provide all of the following services: (1) Assistance with ADLs, IADLs, and health-related tasks through hands-on assistance, supervis ion, and/or cueing. (2) Acquisition, maintenance, and enhancement of skills necessary for the individual to accomplish ADLs, IA DLs, and health-related tasks. (3) Backup systems or mechanisms to ensure continuity of services and supports, as defined in §441.505 of this subpart. (4) Voluntary training on how to sele ct, manage and dismiss attendants. (b) At the State’s option, the State may provide permissible services and supports that are linked to an assessed need or goa l in the individual’s person-centered service plan. Permissible services and supports may include, but are not limited to, the following: (1) Expenditures for transition costs such as rent and utility deposits, first month’s rent and utilities, bedding, basic kitchen supplies, and other ne cessities linked to an assessed need for an individual to transition fr om a nursing facility, institution for mentaldiseases, or intermediate care facility for the mental ly retarded to a home and community-based setting wher e the individual resides; (2) Expenditures relating to a need identif ied in an individual’s person-centered service plan that increases an individu al’s independence or substitutes for human assistance, to the extent that expenditure s would otherwise be made for the human assistance. § 441.525 Excluded services. Community First Choice may not include the following: (a) Room and board costs for the indivi dual, except for a llowable transition services described in §441.520( b)(1) of this subpart. (b) Special education and re lated services provided under the Individuals with Disabilities Education Act that are related to education only, and voc ational rehabilitation services provided under the Rehabilitation Act of 1973. (c) Assistive devices and a ssistive technology services, ot her than those defined in §441.520(a)(3) of this subpart, or those that meet the requirements at §441.520(b)(2) of this subpart. (d) Medical supplies and medical equipmen t, other than those that meet the requirements at §441.520(b)(2) of this subpart. (e) Home modifications, other than t hose that meet the requirements at §441.520(b) of this subpart. § 441.530 [Reserved] § 441.535 Assessment of functional need.States must conduct a face-to-face assessment of the individual’s needs, strengths, preferences, and goals for the services and supports provided under Community First Choice in accordance with the following: (a) States may use one or more processe s and techniques to obtain information, including telemedicine, or other information technology medium, in lieu of a face-to-face assessment if the following conditions apply: (1) The health care professional(s) perf orming the assessment meet the provider qualifications defined by the State, including any additional qualific ations or training requirements for the operation of re quired information technology; (2) The individual receives appropriate support during the assessment, including the use of any necessary on- site support-staff; and (3) The individual is provided the opportuni ty for an in-person assessment in lieu of one performed via telemedicine. (b) Assessment information supports the dete rmination that an individual requires Community First Choice and also supports the development of the person-centered service plan and, if applicable, service budget. (c) The assessment of functional need must be conducted at least every 12 months, as needed when the individual’ s support needs or circumstances change significantly necessitating revisions to the person-centered service plan, and at the request of the individual. (d) Other requirements as determined by the Secretary. § 441.540 Person-centered service plan. (a) Person-centered planning process . The person-centered planning process is driven by the individua l. The process--(1) Includes people chos en by the individual. (2) Provides necessary information and s upport to ensure that the individual directs the process to the maximum extent pos sible, and is enabled to make informed choices and decisions. (3) Is timely and occurs at times and lo cations of convenience to the individual. (4) Reflects cultural considerations of the individual. (5) Includes strategies for solving conflict or disagreement within the process, including clear conflict-of-interest guidelines for all planning participants. (6) Offers choices to the individual re garding the services and supports they receive and from whom. (7) Includes a method for the individu al to request updates to the plan. (8) Records the alternative home and co mmunity-based settings that were considered by the individual. (b) The person-centered service plan . The person-centered service plan must reflect the services and supports that are important for the individual to meet the needs identified through an assessment of functional need, as well as what is important to the individual with regard to pr eferences for the delivery of such services and supports. Commensurate with the level of need of th e individual, and the scope of services and supports available under Community First Choice, the plan must: (1) Reflect that the setting in which the individual resides is chosen by the individual. (2) Reflect the individual’s strengths and preferences. (3) Reflect clinical and support needs as id entified through an assessment of functional need.(4) Include individually identifie d goals and desired outcomes. (5) Reflect the services and supports (p aid and unpaid) that will assist the individual to achieve identif ied goals, and the providers of those services and supports, including natural supports. Na tural supports cannot supplant n eeded paid services unless the natural supports are unpaid s upports that are provided vol untarily to the individual in lieu of an attendant. (6) Reflect risk factors and measures in place to minimize them, including individualized backup plans. (7) Be understandable to the individual receiving services and supports, and the individuals important insupporting him or her. (8) Identify the individual and/or entity responsible for m onitoring the plan. (9) Be finalized and agreed to in wr iting by the individual and signed by all individuals and providers respons ible for its implementation. (10) Be distributed to th e individual and other peop le involved in the plan. (11) Incorporate the service plan requir ements for the self-directed model with service budget at §441.5 50, when applicable. (12) Prevent the provision of unn ecessary or inappropriate care. (13) Other requirements as determined by the Secretary. (c) Reviewing the person-centered service plan . The person-centered service plan must be reviewed, and revised upon reassessm ent of functional need, at least every 12 months, when the individual’ s circumstances or needs change significantly, and at the request of the individual. § 441.545 Service models.A State may choose one or more of the follo wing as the service delivery model to provide self-directed home and community -based attendant services and supports: (a) Agency-provider model . (1) The agency-provider model is a delivery method in which the services and supports are provide d by entities, under a contract or provider agreement with the State Medicaid agency or delegated entity to provide services. Under this model, the entity either provides the services directly thr ough their employees or arranges for the provision of services under the direction of the individual receiving services. (2) Under the agency-provider model fo r Community First Choice, individuals maintain the ability to have a significant role in the selection and dismissal of the providers of their choice, for the delivery of their specific care, and for the services and supports identified in their person-centered service plan. (b) Self-directed model with service budget . A self-directed model with a service budget is one in which the individual has both a person-centered service plan and a service budget based on the asse ssment of functional need. (1) Financial management entity . States must make available financial management activities to a ll individuals with a serv ice budget. The financial management entity performs functions in cluding, but not limite d to, the following activities: (i) Collect and process time sheets of the individual’s attendant care providers. (ii) Process payroll, withhol ding, filing, and payment of applicable Federal, State, and local employment related taxes and insurance. (iii) Separately track budget funds and expenditures for each individual. (iv) Track and report disbursements and balances of each individual’s funds.(v) Process and pay invoices for services in the person-centered service plan. (vi) Provide individual pe riodic reports of expenditures and the status of the approved service budget to the individual and to the State. (vii) States may perform the functions of a financial management entity internally or use a vendor organization that has the cap abilities to perform the required tasks in accordance with all applicable requirements of the Internal Revenue Service. (2) Direct cash . States may disburse cash prospectively to individuals self-directing their Community First Choice se rvices and supports, and must meet the following requirements: (i) Ensure compliance with all applicable requirements of the Internal Revenue Service, and State employment and taxation authorities, including but not limited to, retaining required forms and payment of FICA, FUTA and State unemployment taxes. (ii) Permit individuals using the cash option to choose to use the financial management entity for some or all of the f unctions described in paragraph (b)(1)(ii) of this section. (iii) Make available a financial management entity to an individual who has demonstrated, after additional counseling, info rmation, training, or assistance that the individual cannot effectively manage th e cash option described in this section. (iv) The State may require an individual to use a financial management entity, but must provide the individual with the c onditions under which this option would be enforced. (3) Vouchers . States have the option to i ssue vouchers to individuals who self-direct their Community First Choice services and supports as long as the requirements in paragraphs (b)(2)(i) thr ough (iv) of this paragraph are met.(c) Other service delivery models . States have the option of proposing other service delivery models. Such models are defined by the State and approved by CMS. §441.550 Service plan requirements for self-d irected model with service budget. The person-centered service plan under the self-directed model with service budget conveys authority to the individual to perform, at a minimum, the following tasks: (a) Recruit and hire or se lect attendant care providers to provide self-directed Community First Choice serv ices and supports, including specifying attendant care provider qualifications. (b) Dismiss specific attendant care provide rs of Community First Choice services and supports. (c) Supervise attendant care providers in the provision of Community First Choice services and supports. (d) Manage attendant care providers in the provision of Community First Choice services and supports, which includes the following functions: (1) Determining attendant care provider duties. (2) Scheduling attendant care providers. (3) Training attendant care pr oviders in assigned tasks. (4) Evaluating attendant care providers’ performance. (e) Determining the amount paid for a se rvice, support, or item, in accordance with State and Federal compensation requirements. (f) Reviewing and approving provider payment requests. §441.555 Support system. For each service delivery mode l available, States must provide, or arrange for the provision of, a support system that meets all of the following conditions:(a) Appropriately assesses and counsels an individual before enrollment. (b) Provides appropriate information, c ounseling, training, an d assistance to ensure that an individual is able to mana ge the services and budgets if applicable. (1) This information must be communi cated to the individual in a manner and language understandable by the individual. To ensure that the information is communicated in an accessible manner, info rmation should be communicated in plain language and needed auxiliary aids and services should be provided. (2) The support activities must include at least the following: (i) Person-centered planning and how it is applied. (ii) Range and scope of indi vidual choices and options. (iii) Process for changing the person-centered service plan and, if applicable, service budget. (iv) Grievance process. (v) Information on the risks and re sponsibilities of self-direction. (vi) The ability to freely choose fromavailable home and community-based attendant providers, availabl e service delivery models a nd if applicable, financial management entities. (vii) Individual rights, including appeal rights. (viii) Reassessment and review schedules. (ix) Defining goals, needs, and preferen ces of Community First Choice services and supports. (x) Identifying and accessing servic es, supports, and resources. (xi) Development of risk management agreements.(A)The State must specify in the State Plan amendment any tools or instruments used to mitigate identified risks. (B) States utilizing criminal or back ground checks as part of their risk management agreement will bear the costs of such activities. (xii) Development of a personalized backup plan. (xiii) Recognizing and re porting critical events. (xiv) Information about an advocate or advocacy systems available in the State and how an individual can access the advocate or advocacy systems. (c) Establishes conflict of interest standards for the assessments of functional need and the person-centered service plan developm ent process that apply to all individuals and entities, public or private. At a mini mum, these standards must ensure that the individuals or entities conduc ting the assessment of functiona l need and person-centered service plan development process are not: (1) Related by blood or marriage to the indivi dual, or to any paid caregiver of the individual. (2) Financially responsib le for the individual. (3) Empowered to make financial or h ealth-related decisions on behalf of the individual. (4) Individuals who would benefit financ ially from the provision of assessed needs and services. (5) Providers of State plan HCBS for the i ndividual, or those w ho have an interest in or are employed by a provide r of State plan HCBS for the individual, except when the State demonstrates that th e only willing and qualified entity/entities to perform assessments of functional need and develop pe rson-centered service plans in a geographicarea also provides HCBS, and the State devise s conflict of interest protections including separation of assessment/planni ng and HCBS provider functions within provider entities, which are described in the State plan, and individuals are provided with a clear and accessible alternative disput e resolution process. (d) Ensures the responsibilities for asse ssment of functional need and personcentered service plan deve lopment are identified. §441.560 Service budget requirements. (a) For the self-directed m odel with a service budget, a service budget must be developed and approved by the State based on the assessment of functional need and person-centered service plan and must in clude all of the following requirements: (1) The specific dollar amount an individua l may use for Community First Choice services and supports. (2) The procedures for informing an i ndividual of the amount of the service budget before the person-centered service plan is finalized. (3) The procedures for how an individual may adjust the budget including the following: (i) The procedures for an individual to freely adjust amounts allocated to specific services and supports within the approved service budget. (ii) The circumstances, if any, that may re quire prior approval by the State before a budget adjustment is made. (4) The circumstances, if any, that may re quire a change in the person-centered service plan. (5) The procedures that govern the dete rmination of transition costs and other permissible services and suppor ts as defined at §441.520(b).(6) The procedures for an individual to request a fair hearing under Subpart E of this title if an individual’s request for a budge t adjustment is denied or the amount of the budget is reduced. (b) The budget methodology set forth by the State to determine an individual’s service budget amount must: (1) Be objective and evidence-based utilizing valid, reliable cost data. (2) Be applied consistently to individuals. (3) Be included in the State plan. (4) Include a calculation of the expected cost of Community First Choice services and supports, if those services a nd supports are not self-directed. (5) Have a process in place th at describes the following: (i) Any limits the State places on Commun ity First Choice services and supports, and the basis for the limits. (ii) Any adjustments that are allowe d and the basis for the adjustments. (c) The State must have procedures inplace that will provide safeguards to individuals when the budgeted service amount is insufficient to meet the individual’s needs. (d) The State must have a method of no tifying individuals of the amount of any limit that applies to an i ndividual’s Community First C hoice services and supports. Notice must be communicated in an accessibl e format, communicated in plain language, and needed auxiliary aids a nd services should be provided. (e) The budget may not restrict access to other medically necessary care and services furnished under the State plan and approved by the State but which are not included in the budget.(f) The State must have a procedure to adjust a budget when a reassessment indicates a change in an i ndividual’s medical condition, functional status, or living situation. §441.565 Provider qualifications. (a) For all service delivery models: (1) An individual retains the right to trai n attendant care providers in the specific areas of attendant care needed by the individu al, and to have the at tendant care provider perform the needed assistance in a manner that comports with the individual's personal, cultural, and/or relig ious preferences. (2) An individual retains the right to establish additional staff qualifications based on the individual’s needs and preferences. (3) Individuals also have the right to access other training provided by or through the State so that their attendant care provi der(s) can meet any additional qualifications required or desire d by individuals. (b) For the agency-provider model, the State must define in writing adequate qualifications for providers in the agency m odel of Community Firs t Choice services and supports. (c) For the self-directed m odel with service budget, an individual has the option to permit family members, or any other indivi duals, to provide Community First Choice services and supports identified in the person- centered service plan, provided they meet the qualifications to provide the services and supports establis hed by the individual, including additional training. (d) For other models, the app licability of requirements at paragraphs (b) or (c) of this section will be determined based on the description and approval of the model.§441.570 State assurances. A State must assure the following requirements are met: (a) Necessary safeguards have been taken to protect the health and welfare of enrollees in Community First Choice, includ ing adherence to sect ion 1903(i) of the Act that Medicaid payment shall not be made for items or services furnished by individuals or entities excluded from participating in the Medicaid Program. (b) For the first full 12 month period in which the State plan amendment is implemented, the State must maintain or exceed the level of State expenditures for home and community-based attendant services and supports provided under sections 1115, 1905(a), 1915, or otherwise under the Act, to individuals with disabilities or elderly individuals attributable to the preceding 12 month period. (c) All applicable provisions of th e Fair Labor Standards Act of 1938. (d) All applicable provisions of Federal and State laws regarding the following: (1) Withholding and payment of Federal and State income and payroll taxes. (2) The provision of unemployment and workers compensation insurance. (3) Maintenance of general liability insurance. (4) Occupational health and safety. (5) Any other employment or tax related requirements. §441.575 Development and Implementation Council. (a) States must establish a Development and Implementation Council, the majority of which is comprised of individuals with disabilities, el derly individuals, and their representatives.(b) States must consult and collaborate with the Council when developing and implementing a State plan amendment to prov ide Community First Choice services and supports. §441.580 Data collection. A State must provide the following inform ation regarding the provision of home and community-based attendant services and supports under Community First Choice for each Federal fiscal year for which the services and supports are provided: (a) The number of individuals who are estimated to receive Community First Choice services and supports under this State plan option dur ing the Federal fiscal year. (b) The number of individuals who receive d the services and supports during the preceding Federal fiscal year. (c) The number of individuals served br oken down by type of disability, age, gender, education level, and employment status. (d) The specific number of individuals w ho have been previo usly served under sections 1115, 1915(c) and (i) of the Act, or the pers onal care State plan option. (e) Data regarding how the State prov ides Community First Choice and other home and community-based services. (f) The cost of providing CommunityFirst Choice and other home and community-based services and supports. (g) Data regarding how the State provid es individuals with disabilities who otherwise qualify for institutional care under th e State plan or under a waiver the choice to receive home and community-based services in lieu of institutional care. (h) Data regarding the impact of Commun ity First Choice services and supports on the physical and emotiona l health of individuals.(i) Other data as determined by the Secretary. §441.585 Quality assurance system. (a) States must establish and maintain a comprehensive, continuous quality assurance system, described in the State plan amendment, which includes the following: (1) A quality improvement strategy. (2) Methods to continuously monitor the health and welfare of each individual who receives home and community-based atte ndant services and supports, including a process for the mandatory reporting, investig ation, and resolution of allegations of neglect, abuse, or exploitation in connecti on with the provision of such services and supports. (3) Measures individual outcomes associ ated with the receipt of home and community-based attendant serv ices and supports as set fort h in the person centered service plan, particularly for the health and we lfare of individuals re ceiving such services and supports. These measures must be reported to CMS upon request. (4) Standards for all servi ce delivery models for traini ng, appeals for denials and reconsideration procedures for an in dividual’s person-centered service plan. (5) Other requirements as determined by the Secretary. (b) The State must ensure the quality assurance system will employ methods that maximizes individual independence and control, and provides information about the provisions of quality improvement and assurance to each individual receiving such services and supports. (c) The State must elicit and incorporat e feedback from individuals and their representatives, disability organizations, providers, families of disabled or elderlyindividuals, members of the community a nd others to improve the quality of the community-based attendant serv ices and supports benefit. §441.590 Increased Federal financial participation. Beginning October 1, 2011, the FMAP applicab le to the State will be increased by 6 percentage points, for the provision of Community First Choice services and supports, under an approved State plan amendment. Authority: (Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program)

Dated: April 24, 2012

_______________________________ Marilyn Tavenner, Acting Administrator, Centers for Medicare & Medicaid Services

Approved: April 24, 2012

__________________________________ Kathleen Sebelius , Secretary, Department of Health and Human Services

BILLING CODE 4120-01-P[FR Doc. 2012-10294 Filed 04/26/2012 at 4:15 pm; Publication Date: 05/07/2012]