Home & Community-Based Settings Regulation (“HCBS Rule) Compliance Deadline Extended One Year

On July 14, the Centers for Medicare & Medicaid Services (CMS) issued guidance to state Medicaid agencies informing them that the agency will be extending the deadline for ensuring compliance with the Home and Community-Based Settings Regulation, in response to the COVID-19 pandemic. In their guidance they stated, “states have faced significant challenges and delays in their implementation activities, and that service provision and community integration approaches have been disrupted. Due to these unprecedented challenges, CMS has extended the compliance deadline for this regulation to March 17, 2023. CMS is committed to continuing its work with states, advocates, and other stakeholders to continue to improve HCBS options.”

Final Compliance Deadline: The final compliance deadline for the Settings Rule is now March 17, 2023. Previously, the deadline was March 17, 2022. It is after this point that federal reimbursement for HCBS providers will be conditioned on compliance with the Settings Rule.

Heightened Scrutiny Deadlines: In March 2019, CMS issued guidance on heightened scrutiny for the HCBS Settings Rule that set forth two deadlines for states that were set to take effect this year. By July 2020, states were to submit to CMS a list of providers they had identified as having the effect of isolating individuals but had since remediated and came into compliance with the rule. The deadline for this aspect of the rule is now July 1, 2021. If a provider is on this list, they do not need to undergo heightened scrutiny at the federal level to be deemed compliant. Providers who are identified by the state as being noncompliant with the Settings Rule due to isolating individuals that have not remediated and come into compliance will need to undergo federal heightened scrutiny. States previously were to submit a list of such providers to CMS by July 2020 for heightened scrutiny by October 2020. The timeline for this is now July 1, 2021 for the list of providers to be submitted to CMS, and October 31, 2021 for CMS to complete the heightened scrutiny review.

Extended State Deadlines: The California Department of Developmental Services (DDS) has also issued guidance extending deadlines related to HCBS Rule compliance, including:

  • Requirements for regional centers to post on their websites information on compliance with the HCBS Final Rule has been extended to August 31, 2020.
  • Requirements for providers to conduct a self-assessment has been extended

Home and Community-Based Settings Regulation – Implementation Timeline Extension and Revised Frequently Asked Questions State Medicaid Director Letter

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