Comments Due July 2 for Proposed Medicaid Regulations Defining “Community Based”

CMS has released another set of proposed regulations that seek to clarify whether an assisted living facility can be considered non-institutional setting for purposes of Medicaid home and community-based services (HCBS) funding, with comments on the proposal due by no later than July 2, 2012.[i]

In the proposed regulations, the initial subsections are aggressive in protecting beneficiary independence, although the broadness of the language means that its effectiveness will depend heavily on how it is interpreted and enforced.  For example, the beneficiary’s “initiative, autonomy, and independence in making life choices” must be “optimized and not regimented.”  Similarly, the setting must protect a beneficiary’s “essential personal rights of privacy, dignity and respect,” and facilitate his or her “full access to the greater community.”  Beneficiary choice is emphasized in the choice of both the setting and the service providers.[ii]

Specific provisions apply only to “a provider-owned or controlled residential setting,” e.g., an assisted living facility.   As one would hope, the setting must be physically accessible.  The living unit must be “a specific physical place,” with the beneficiary having “at a minimum, the same responsibilities and protections from eviction that tenants have under the landlord tenant law.”  Each beneficiary must have privacy in the living unit, and units are shared only at the beneficiary’s choice.  Units must be lockable, although “appropriate staff” may have keys.  Beneficiaries must also have freedom to live their lives — specifically, to control their schedules, and at any time to access food or receive visitors.  Any of these provisions evidently are subject to modification, as the proposed regulation notes that any modification, “for example, to address the safety needs of an individual with dementia, must be supported by a specific assessed need and documented in the person-centered service plan.”[iii]  Regarding such modifications, CMS explicitly solicits comments on whether to set additional specified standards for the modification process.[iv]

Certain settings are automatically deemed institutional and thus non-qualifying: nursing facilities, institutions for mental diseases, intermediate care facilities for the mentally retarded, and hospitals providing long-term care services.  Also disqualified, although with less precision, are “any other locations that have qualities of an institutional setting, as determined by [CMS].”  In making such determinations, CMS will apply a rebuttable presumption against a setting that shares a building with an inpatient facility, or which shares space with, or is “immediately adjacent to, a public institution, or disability-specific housing complex.”[v]

CMS explicitly requests public comment on whether a community-based setting should be allowed to require a beneficiary to receive a specific service or support.  CMS offers two examples: a facility requiring residents to purchase services and supports from the facility rather than an outside service provider, and a specialized facility conditioning tenancy on a resident’s use of the facility’s specialized services.[vi]

CMS suggests the proposed regulatory language to apply to two programs: the Community First Choice Option (proposed section 42 C.F.R. § 441.530) and the HCBS State-Plan benefit (proposed section 42 C.F.R. § 441.656.  The ultimate goal, explains CMS is to align the relevant regulatory language for the Community First Choice Option, the HCBS State-Plan benefit, and HCBS waiver programs.[vii]

This recent release of proposed regulations follows several previous steps: in 2008, proposed regulations for the HCBS State-Plan benefit; in 2009, an advance notice of proposed rulemaking for HCBS waiver programs; and, in 2011, proposed regulations for both the Community First Choice Option and HCBS waivers.  CMS notes in the recent regulatory release that it has softened its position to a certain extent since 2011, based on public comments that the 2011 proposed regulations would have excluded settings that in fact “promote independence and integration.”[viii]  For example, CMS in 2011 proposed to automatically exclude any setting that shared a building or grounds with an inpatient facility or a “housing complex designed expressly around an individual’s diagnosis or disability.”[ix]  At the same time, CMS also had proposed that each unit be “an apartment with individual living, sleeping, bathing and cooking areas,” and that facilities have a common practice of allowing residents to remain in the facility as the residents age and/or require additional services.[x]  Each of these requirements has been eliminated or softened in the development of the currently proposed regulations.

These proposed community-character regulations are part of a broader set of proposed regulations that apply solely to the HCBS State-Plan benefit.  This alert is only NSCLC’s first step in addressing the proposed regulations.  NSCLC will develop comments regarding the proposed regulations —including but not limited to the proposed standards for “community-based” settings — and will work with advocates on communicating beneficiaries’ priorities and concerns to CMS.

[i] The proposed regulation stated that comments were due on June 4, but this was a mistake.  As explained in a separate entry in the Federal Register, CMS accidentally submitted a request for a 30-day comment period instead of a 60-day comment period.  The separate entry corrects the mistake, leading to a deadline of July 2.  77 Fed. Reg. 26,232, 26,362 (May 3, 2012).

[ii] Proposed 42 C.F.R. §§ 441.530(a)(1)(i)-(v), 441.656(a)(1)(i)-(v).  Sections 441.530 and 441.656 apply, respectively, to the Community First Choice Option and the HCBS state-plan benefit.

[iii] Proposed 42 C.F.R. §§ 441.530(a)(1)(vi), 441.656(a)(1)(vi).

[iv] 77 Fed. Reg. at 26,379.

[v] Proposed 42 C.F.R. §§ 441.530(a)(2), 441.656(a)(2).

[vi] 77 Fed. Reg. at 26,379.

[vii] 77 Fed. Reg. at 26,379.

[viii] 77 Fed. Reg. at 26,379.

[ix] 76 Fed. Reg. 21,311, 21,317 (Apr. 15, 2011) (proposed regulations for HCBS waivers); see also 76 Fed. Reg. 10,736, 10,750 (substantially similar language proposed for Community First Choice Option).

[x] 76 Fed. Reg. at 21,313.


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