Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. State Plan Home and Community-Based Services


The DRA-2005 added §1915(i) to the Social Security Act, which allows states, at their option, to provide a broad range of home and community-based services under the Medicaid State Plan.23 The Affordable Care Act made a number of significant changes to the §1915(i) authority.

Section 1915(i) allows states to include any or all of the services that are listed in §1915(c)(4)(B) of the Social Security Act. These services include case management, homemaker/home health aide, personal care, adult day health, habilitation, and respite care services. In addition, the following services may be provided to persons with chronic mental illness: day treatment, other partial hospitalization services, psychosocial rehabilitation services, and clinic services (whether or not furnished in a facility). States may also offer “such other services…as the Secretary may approve.” CMS has drafted an application for states to submit a State Plan amendment to add an HCBS benefit.

All individuals served under §1915(i) must meet the needs-based criteria the state establishes for its HCBS benefit. These criteria must be less stringent than its level-of-care criteria for institutional services, that is, nursing facilities, ICFs/ID, and hospitals that are Medicaid certified as hospitals but provide long-term care services. These criteria cannot be based solely on diagnosis but must be based on an assessed need for a set of supports and services due to functional limitations.

The evaluation process to determine eligibility must be independent and not present a conflict of interest (i.e., service providers may not be involved in the eligibility determination process if they have a contract to furnish services under the benefit). Additionally, states must have safeguards in place to ensure there is no conflict of interest in the needs assessment and service planning processes.

Proposed Changes to Rehabilitation Benefit Withdrawn

On August 13, 2007, CMS published a proposed rule--Medicaid Program; Coverage for Rehabilitative Services--in the Federal Register to clarify the definition of Medicaid “rehabilitative services” and to establish new documentation and other requirements.

Due to concerns about the proposed rule expressed by many states and numerous stakeholders, it was subject to a Congressional moratorium that prohibited the Secretary of HHS from taking any action, including publication of a final rule that was more restrictive with respect to coverage or payment for rehabilitative services than the requirements in place as of July 1, 2007.

Before the expiration of the Congressional moratorium, the American Recovery and Reinvestment Act of 2009, enacted on February 17, 2009, included a “Sense of Congress” that the Secretary should not promulgate a final regulation similar to the August 13, 2007 proposed regulation. In light of clear Congressional concern, as well as the complexity of the underlying issues and of the public comments received, on November 23, 2009 CMS withdrew the proposed rule in order to ensure agency flexibility in re-examining the issues and exploring options and alternatives with Congress and stakeholders.

States have the option to provide State Plan HCBS to individuals with incomes up to 150 percent of the Federal Poverty Level (FPL) who are eligible for Medicaid under an eligibility group covered under the State Plan without regard to whether they meet institutional level-of-care criteria. They also have the option of providing services to individuals with income up to 300 percent of the SSI Federal benefit rate, but individuals in this new eligibility group must be eligible for a §1915(c), (d), or (e) waiver or §1115 demonstration program.24 They do not, however, have to be enrolled and receiving services in either waiver program.

States may also make HCBS available to medically needy people if they are covered under the State Plan. For the medically needy group, states may apply income disregards to facilitate their eligibility for HCBS benefits (but not for other State Plan services). States do not have the option to protect spousal income and assets as they can under an HCBS waiver.

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