HCBS Settings Rule: Compliance for Residential Service Providers

The home and community-based services (HCBS) settings rule was published in 2014 by the Centers for Medicare & Medicaid Services (CMS). The federal requirements define the qualities of settings eligible for reimbursement for Medicaid home and community-based services. Under the requirements, DHS must ensure that settings where HCBS are provided meet and stay in compliance with the settings rule.

Residential settings subject to the HCBS settings rule:

• Certified 1-2 bed adult family homes (AFHs)
• Licensed community-based residential facilities (CBRFs)
• Licensed 3-4 bed AFHs
• Certified residential care apartment complexes (RCACs)
• Children’s level 5 foster homes

HCBS settings rule requirements

All residential settings must ensure specific rights of residents who get HCBS in those settings. Residents have the right to:

• Experience full access to the community. This includes chances to seek employment and work in integrated settings, take part in community life, control personal resources, and get services in the community. They get access to the community to the same degree as people not getting Medicaid HCBS.
• Decide where they live. Options include non-disability-specific locations. Their long-term care person-centered service and support plan provides options based on their needs, preferences, and resources.
• Be treated with dignity and respect. They also have the right to privacy and freedom from coercion and restraint.
• Live with independence. They are encouraged to make their own choices about life, daily activities, friendships, and the places they visit.
• Choose services and supports. They also choose who provides them.
• Enter into legal agreements with the provider to own, rent, or occupy a residence. This also protects them from eviction.
• Have a physically accessible residence.
• Privacy of living space. They have doors that lock and can choose their roommates. They can also choose their furniture and decorate if it doesn't break the rules of the lease or agreement.
• Control their schedules. They also have access to food at any time.
• Visitors of their choice, at any time.

Residential settings must meet these rules to be considered compliant. Only then can they provide services under the following Medicaid waiver programs:

• Family Care
• Family Care Partnership
• IRIS (Include, Respect, I Self-Direct)
• Children's Long Term Support Waiver

An HCBS setting rule compliance determination does not guarantee a contract to provide long-term care services.

Certified 1-2 bed adult family homes

Each AFH must be certified by one managed care organization, county human service agency, or the IRIS program before serving residents. An AFH can only be certified by one agency. Once the AFH has been certified, they may be eligible to admit residents from other managed care organizations, IRIS consultant agencies, or county human service agencies.

Federal HCBS settings rule requirements can be found in the Wisconsin Medicaid Standards for Certified 1-2 Bed Adult Family Homes, P-00638 (PDF).

If a certifying agency agrees to certify a home, they are required to review HCBS settings rule compliance if the setting intends to serve HCBS waiver-funded residents.

Benchmarks

Providers can review benchmark requirements with the federal settings rule for specific residential settings.

Home and Community-Based Services (HCBS) Settings Rule Benchmarks: 1-2 Bed Adult Family Home Settings, P-02060 (PDF)

DQA-regulated assisted living settings

The Division of Quality Assurance (DQA) inspects DQA-regulated assisted living facilities to ensure compliance with the HCBS settings rule. DQA-regulated assisted living facilities include licensed CBRFs, licensed 3-4 bed AFHs, and certified RCACs.

The DQA Implementation of Home and Community-Based Services Settings Rule in Residential Assisted Living Facilities, P-01826 (PDF), provides general information on how DQA will incorporate the HCBS regulations into the assisted living survey processes. This publication provides information on the following:

• Background
• Implementation
• Heightened scrutiny review process
• Notice of HCBS compliance review determination
• Training information
• Resources

Additional compliance information is available on the Assisted Living: HCBS webpage. DHS continues to evaluate the impact of the HCBS settings rule requirements on regulated assisted living settings and will make revisions as needed.

Heightened scrutiny

A residential setting can get paid by Medicaid if it is a home and community-based setting. The federal HCBS settings rule sets guidelines. Guidelines say a setting is not home and community-based if it:

• Is located in a publicly or privately owned facility providing inpatient treatment (including hospitals and skilled nursing facilities).
• Is on the grounds of, or next to, a public inpatient institution (including hospitals and skilled nursing facilities). Public means government owned or controlled.
• Keeps people away from the broader community of people who do not get Medicaid HCBS waiver services.

When a provider requests to receive Medicaid funding, and if any of these are true, the setting needs a heightened scrutiny review and needs to meet the additional benchmarks.

Providers can review heightened scrutiny benchmark requirements with the federal settings rule for specific residential settings.

Home and Community-Based Setting Rule Benchmarks: Heightened Scrutiny for Nonresidential Providers and 1-2 Bed Adult Family Homes, P-03629 (PDF)

Learn more and review compliance requirements on the HCBS Settings Rule: Heightened Scrutiny webpage.

Contact information

If you cannot find the answer to your question, email us at dhshcbssettings@dhs.wisconsin.gov or call 877-498-9525.