In 2014, the Centers for Medicare & Medicaid Services (CMS) finalized a rule establishing new requirements for the settings in which Medicaid home- and community-based services (HCBS) are delivered. CMS noted that the intent of the rule is to ensure that HCBS settings are different from institutional settings and facilitate community integration. In addition, coverage of services should be defined by the nature and quality of individuals’ experiences rather than solely by the physical location. HCBS providers must comply with the new requirements by March 17, 2022, or they will not be able to receive Medicaid payment for HCBS.
This issue brief provides an overview of the HCBS settings rule and describes the status of federal and state implementation activities. It also includes the results of stakeholder interviews on implementation activities, the types of changes providers are making to comply, and the anticipated effects of the rule. While stakeholders generally agree that the rule will expand opportunities for community integration, uncertainty remains about how states and CMS will evaluate compliance of certain provider types.
