Abstract
First issued in 2014, the Home and Community Based Settings Rule seeks to ensure that the limited Medicaid funding dedicated to Home and Community Based Services (HCBS) funds settings that are truly home-and community based in nature, rather than settings that retain the characteristics of institutions. As a result of advances in federal public policy and civil rights law, coupled by demands from people with disabilities and their advocates for greater community-based options, states have shifted funds and helped people transition from institutional settings to community-based ones, with the goal of delivering higher quality services consistent with the autonomy and integration available in the community. In order to ensure that these transitions truly reflect a change in the experience of the person receiving services, the Settings Rule articulates the minimum standards a setting must meet to qualify as community-based. Among the Rule's requirements are those pertaining to settings defined as " presumptively institutional " – settings that are presumed to be institutional in nature, unless a state offers compelling evidence to the contrary through a " heightened scrutiny " process. The rule describes three categories of settings that are presumed to have the qualities of an institution: a) those located in a building that is also a publicly or privately operated facility that provides inpatient institutional treatment; b) those in a building located on the grounds of, or immediately adjacent to, a public institution; and c) any other setting that has the effect of isolating individuals receiving Medicaid HCBS from the broader community of those not receiving Medicaid HCBS. This policy brief focuses on the third prong: settings that isolate individuals from the broader community. The Rule itself remains in effect and has not changed since 2014. In March 2019, the Centers for Medicare and Medicaid Services (CMS)issued additional guidance on heightened scrutiny and has since issued multiple letters in response to heightened scrutiny requests from states, including the results of a six-state pilot CMS implemented on heightened scrutiny. As a result, states may need to adjust their approach to implementing the heightened scrutiny provisions of the HCBS settings rule. This technical brief provides recommendations to state policymakers on how to implement the HCBS settings rule with fidelity in light of CMS's recent updates, while highlighting certain promising practices states may adopt.