Attachment B - Instructions_TechnicalGuide_V3.7 2024.pdf

Instructions: Version 3.7 HCBS Waiver Application

Instructions, Technical Guide and Review Criteria

Release Date:

Center for Medicaid and CHIP Services Centers for Medicare & Medicaid Services Department of Health and Human Services

Table of Contents Purpose

Overview of the Section 1915(c) HCBS Waiver Authority

Version 3.7 HCBS Waiver Application

Waiver Application Format:

Description of the Section 1915(c) HCBS Waiver Authority

Principal Features of the HCBS Waiver Authority

Application for a §1915(c) Home and Community-Based Services Waiver

Overview

1. Request Information

2. Brief Waiver Description

3. Components of the Waiver Request

4. Waiver(s) Requested

5. Assurances

6. Additional Requirements

7. Contact Person(s)

8. Authorizing Signature

Attachments (if applicable)

Appendix A: Waiver Administration and Operation

Brief Overview

Requirements: Waiver Administration and Operation

Detailed Instructions for Completing Appendix A

Appendix B: Participant Access and Eligibility

Brief Overview

Appendix B-1: Specification of the Waiver Target Group(s)

Appendix B-2: Individual Cost Limit

Appendix B-3: Number of Individuals Served

Appendix B-4: Medicaid Eligibility Groups Served in the Waiver

Appendix B-5: Post-Eligibility Treatment of Income

Appendix B-6: Evaluation/Reevaluation of Level of Care

Quality Improvement: Level of Care (LOC) Determination

Appendix B-7: Freedom of Choice

Appendix B-8: Access to Services by Limited English Proficient Persons

Appendix C: Participant Services

Brief Overview

Web-Based Application

Appendix C-1: Summary of Services Covered Overview

Detailed Instructions for Completing Appendix C-1

Appendix C-2: General Service Specifications

Quality Improvement: Qualified Providers

Appendix C-3: Waiver Services Specifications

Appendix C-4: Additional Limits on Amount of Waiver Services

CMS Review Criteria General Criteria:

Criteria Applicable to Specific Types of Limits Limit(s) on Set(s) of Waiver Services

Prospective Individual Budget Amount

Budget Limits by Level of Support

Other Type of Limit

Appendix C-5: Home and Community-Based Settings Requirements

Attachment: Core Service Definitions

Appendix D: Participant-Centered Planning and Service Delivery

Brief Overview

Appendix D-1: Service Plan Development

Appendix D-2: Service Plan Implementation and Monitoring

Quality Improvement: Service Plan

Appendix E: Participant Direction of Services

Brief Overview

Overview: Participant Direction of Waiver Services

Detailed Instructions for Completing Appendix E

Appendix F: Participant Rights

Brief Overview

Appendix F-1: Opportunity to Request a Fair Hearing

Appendix F-2: Additional Dispute Resolution Process

Appendix F-3: State Grievance/Complaint System

Appendix G: Participant Safeguards

Brief Overview

Appendix G-1: Response to Critical Events or Incidents

Appendix G-2: Safeguards Concerning Restraints and Restrictive Interventions

Appendix G-3: Medication Management and Administration

Quality Improvement: Health and Welfare

Appendix H: Systems Improvement

Quality Improvement Strategy

Quality Improvement Strategy: Systems Improvement

QIS Processes to Establish Priorities, Develop, and Assess System Improvements

Compilation and Communication of Quality Improvement Information

Periodic Evaluation and Revision of the QIS

Appendix I: Financial Accountability

Brief Overview

Appendix I-1: Financial Integrity and Accountability

Quality Improvement: Financial Accountability

Appendix I-2: Rates, Billing and Claims

Appendix I-3: Payment

Appendix I-4: Non-Federal Matching Funds

Appendix I-5: Exclusion of Medicaid Payment for Room and Board

Appendix I-6: Payment for Rent and Food Expenses of an Unrelated Live-In Caregiver

Appendix I-7: Participant Co-Payments for Waiver Services and Other Cost Sharing

Appendix J: Cost Neutrality Demonstration

Brief Summary

Cost Neutrality Formula

Appendix J-1: Composite Overview and Demonstration of Cost-Neutrality Formula

Appendix J-2 - Derivation of Estimates

Glossary of Terms and Abbreviations

Index to the Application and Instructions

Purpose

These instructions provide information to assist states in completing the Version 3.7 Application for a section1915(c) Home and Community-Based Services (HCBS) Waiver, released January 2024.

The instructions include technical guidance to aid states in designing an HCBS waiver. This guidance is intended to improve understanding of applicable federal policies and their implications for the design and operation of an HCBS waiver. Finally, the instructions incorporate the review criteria that the Centers for Medicare & Medicaid Services (CMS) uses in order to determine whether a waiver meets applicable statutory, regulatory and other requirements. Publishing these criteria is intended to assist states in clearly understanding CMS expectations concerning the content of HCBS waiver applications.

It is not the purpose of the instructions to prescribe how a state should design its waiver.

Instead, the instructions are solely intended to provide information to assist states in the design of waivers and completing the waiver application.

Overview of the Section 1915(c) HCBS Waiver Authority Operating a program of services under the authority of section 1915(c) of the Social Security Act permits a state to waive certain Medicaid requirements in order to furnish an array of home and community-based services that promote community living for Medicaid beneficiaries and, thereby, avoid institutionalization. Waiver services complement and/or supplement the services that are available through the Medicaid State plan and other federal, state and local public programs as well as the supports that families and communities provide to individuals.

States have flexibility in designing waivers, including the latitude to:

• Determine the target group(s) of Medicaid beneficiaries who are served through the waiver;

• Specify the services that are furnished to support waiver participants in the community;

• Incorporate opportunities for participants to direct and manage their waiver services;

• Determine the qualifications of waiver providers;

• Design strategies to assure the health and welfare of waiver participants;

• Manage a waiver to promote the cost-effective delivery of home and community-based services;

• Link the delivery of waiver services to other state and local programs and their associated service delivery systems; and

• Develop and implement a quality improvement strategy to ensure that the waiver meets essential federal statutory assurances and to continuously improve the effectiveness of the waiver in meeting participant needs.

The next section provides a more complete description of the HCBS waiver authority and its principal features.

CMS recognizes that the design and operational features of an HCBS waiver will vary depending on the specific needs of the target population, the resources available to a state, service delivery system structure, state goals and objectives, and other factors.

Version 3.7 HCBS Waiver Application The Version 3.7 HCBS Waiver Application is available for state use upon release. The revised application reflects current federal policy regarding the operation of HCBS waivers and is designed to ensure that the application includes the full range of information that CMS requires in order to review and take action on a state’s request to operate an HCBS waiver. See Version

3.7 HCBS Waiver Application Organization for additional information concerning the revised application.

Waiver Application Format:

Since November 2006, CMS has offered a web-based version of the application, currently at https://wms-mmdl.cms.gov/WMS/faces/portal.jsp. The web-based application has streamlined the preparation of waiver applications and amendments as well as improved the exchange of information between states and CMS concerning waiver requests.

CMS requires states to employ the web-based application to submit new waivers, waiver renewals, and amendments. The web-based application format contains separate technical directions for its use. In addition, the web-based application is linked to pertinent elements of these instructions. Please see Waiver Application Submission Requirements, Process and Procedures for more information about the web-based application.

Instructions – Overview The instructions contain the following major sections:

• Description of the Section 1915(c) HCBS Waiver Authority provides an overview of the HCBS waiver program, including its statutory basis and principal features and information about where to locate resources that may assist states in designing and operating an HCBS waiver;

• Waiver Application Submission Requirements, Processes, and Procedures furnishes information and technical guidance concerning the submission of waiver applications and amendments to approved waivers, including use of the web-based format. This section also includes the timelines that CMS must meet in taking action on state waiver submissions, and directions;

• Post Approval Activities summarizes federal and state activities and processes that are undertaken during the period that a waiver is in effect, including state submission of annual waiver reports and CMS waiver review procedures;

• Detailed Instructions for Completing the Version 3.7 Section 1915(c) Waiver Application includes detailed item-by-item instructions for completing the application along with technical guidance to assist states in designing and operating a waiver and the criteria that CMS applies when reviewing each element of a waiver application;

• Glossary of Terms and Abbreviations provides definitions of the key terms and frequently used abbreviations that appear in the application and the instructions; and

• Index to Application and Instructions cross-references topics between the application and the instructions.

In addition, the following Resource Attachments accompany the instructions.

• Attachment A: Section 1915(c) of the Social Security Act contains the full text of the federal law that authorizes the HCBS waiver program;

• Attachment B: Federal Regulations Related to the Operation of HCBS Waivers https://wms-mmdl.cms.gov/WMS/faces/portal.jsp compiles selected federal Medicaid regulations that pertain to the operation of HCBS waivers;

• Attachment C: Selected State Medicaid Director Letters Concerning HCBS Waivers and Other Materials compiles letters issued to State Medicaid Directors by the Center for Medicaid and CHIP Services (CMCS) regarding topics that pertain to the HCBS waiver program. The attachment also includes additional CMS and other reference materials that may prove useful in designing a waiver or completing the waiver application; and

• Attachment D: Sampling Guide Description of the Section 1915(c) HCBS Waiver Authority Overview This section provides a summary description of the HCBS waiver program, including its statutory basis and principal features. It also identifies the CMS organizations and units that are responsible for the administration of the waiver program and web-accessible resources that may assist states in designing and operating HCBS waivers.

Statutory Basis and Legislative History of the HCBS Waiver Authority Section1915(c) of the Social Security Act (“the Act”) authorizes the Secretary of Health and Human Services (HHS) to waive certain specific Medicaid statutory requirements so that a state may offer home and community-based services to state-specified target group(s) of Medicaid beneficiaries who need a level of institutional care that is provided under the Medicaid State plan. This provision was added to the Act by section 2176 of P.L. 97-35 (Omnibus Budget Reconciliation Act (OBRA) of 1981) and subsequently has been amended by P.L. 99-272, (Consolidated Omnibus Reconciliation Act (COBRA) of 1985), P.L. 99-509 (OBRA 1986), P.L.

100-203 (OBRA 1987), P.L. 100-360 (Medicare Catastrophic Coverage Act of 1988), P.L. 100- 647 (Technical and Miscellaneous Revenue Act), P.L. 101-508 (OBRA 1990), and section 4743 of P.L. 105-33 (Balanced Budget Act of 1997 – BBA-97). Attachment B to these instructions contains the full text of section 1915(c) of the Act, as amended.

Prior to the enactment of section1915(c) of the Act, the Medicaid program provided for little in the way of coverage for long term services and supports in non-institutional settings but offered full or partial coverage of institutional care. Section 1915(c) was enacted to enable states to address the needs of individuals who would otherwise receive costly institutional care by furnishing cost-effective services to assist them to remain in their homes and communities.

Section 6086 of the Deficit Reduction Act of 2005 (P.L. 109-171) added §1915(i) to Act.

Effective January 1, 2007, states have the option to cover, under the Medicaid State plan, any or all of the home and community-based services that are specifically listed in section 1915(c)(4)(B), not including “other services”, to Medicaid eligible individuals who meet certain requirements. This option does not entail applying for a waiver (but it does require submitting a state plan amendment) and it does not include the requirement that beneficiaries require an institutional level of care in order to receive home and community-based services. The section 1915(i) authority provides an additional avenue for states to support individuals in the community. A state may employ both the sections 1915(c) and 1915(i) authorities to fashion a comprehensive approach to the delivery of home and community-based services. The enactment of the section 1915(i) authority did not alter the 1915(c)waiver authority. Further guidance regarding the 1915(i) state plan HCBS authority is available at https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915i/index.html.

https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915i/index.html https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915i/index.html

Principal Features of the HCBS Waiver Authority Basic Framework The HCBS waiver authority permits a state to offer home and community-based services to individuals who: (a) are found to require a level of institutional care (hospital, nursing facility, or Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID)) under the State plan; (b) are members of a target group that is included in the waiver; (c) meet applicable Medicaid financial eligibility criteria; (d) require one or more waiver services in order to function in the community; and, (e) exercise freedom of choice by choosing to enter the waiver in lieu of receiving institutional care. It is entirely a state option to offer waiver services through its Medicaid program.

Waiver Application Process In order to launch an HCBS waiver, a state must submit an initial waiver application to CMS, pursuant to 42 CFR § 441.301. The application describes the proposed waiver’s design and must include sufficient information to permit CMS (acting on behalf of the Secretary of Health and Human Services) to determine that the waiver meets applicable statutory and regulatory requirements, especially the assurances specified in 42 CFR § 441.302. Continuation of a waiver beyond its initial three-year approval period requires that the state submit a five-year waiver renewal application and a determination by CMS that, while the waiver has been in effect, the state has satisfactorily met the waiver assurances and other federal requirements, including the submission of mandatory annual waiver reports (the CMS-372(S) report). Each subsequent renewal of the waiver also requires the submission of a renewal application and a CMS determination that the state has continued to meet federal requirements.

The approved waiver application specifies the operational features of the waiver. A state must implement the waiver as specified in the approved application. If the state wants to change the waiver while it is in effect, it must submit an amendment to CMS for its review and approval. All requests for new waivers, waiver renewals and amendments must be submitted by the state Medicaid agency. There is no limit on the number of HCBS waivers that a state may operate.

Waivers Granted Section 1915(c) of the Act permits the Secretary of Health and Human Services to grant waivers of three provisions of the Act so that a state may operate an HCBS waiver:

Section 1902(a)(10)(B) (Comparability). Waiver of this provision of the Act permits a state to limit the provision of HCBS waiver services to Medicaid beneficiaries who require the level of care in an institutional setting and are in the target group(s) specified in the waiver, as well as offer services to waiver participants that are not provided to other Medicaid beneficiaries. All HCBS waivers operate under a waiver of this statutory provision;

Section 1902(a)(1) (Statewideness). The Secretary may grant a waiver of this provision of the Act in order to permit a state to limit the operation of a waiver to specified geographic areas of the state; and Section 1902(a)(10)(C)(i)(III) (Income and Resources for the Medically Needy). A State may request a waiver of this provision in order to apply institutional income and resource “eligibility” rules for medically needy in the community who otherwise qualify for waiver services.

Section 1915(c) does not give the Secretary the authority to waive any other provisions of the Act. Therefore, all other pertinent Medicaid statutory requirements apply to the operation of a waiver. By proposing to operate an HCBS waiver concurrently with another authority such as a section 1915(b) waiver, a state may obtain waivers of certain additional provisions of the Act.

Individuals Served by a Waiver In its application, a state must specify the group or groups of Medicaid beneficiaries who are served through the HCBS waiver, pursuant to 42 CFR § 441.301. This specification has three dimensions. First, a state must specify the level or levels of institutional care that individuals must need in order to be considered for entrance into the waiver. For example, a waiver may target persons who require the nursing facility level of care. Second, a state must select the specific target group (e.g., the “aged”) that the waiver will serve from among the three basic groups that are specified in the waiver regulations. A state may further specify the waiver target group by age, condition and/or other factors. Lastly, a state must identify the Medicaid eligibility groups (e.g., Supplemental Security Income (SSI) recipients) to which waiver services are furnished. These groups may include some or all of the eligibility groups that are included in the Medicaid State plan. Also, a state may elect to apply more generous “institutional eligibility” rules to certain persons in the community to secure Medicaid eligibility on the same footing as persons who elect to receive institutional services.

Waivers target many types of Medicaid beneficiaries, including older persons, individuals who have experienced a brain injury, children with mental illness, children and adults with developmental disabilities, persons with physical and other disabilities, persons living with AIDS, and others.

Services Offered Under a Waiver A state must specify the services that are furnished through the waiver, pursuant to 42 CFR § 441.301(b)(4). The state may include the services that are specifically enumerated in section 1915(c) of the Act and/or propose to offer other services that assist individuals to remain in the community and avoid institutionalization. Waiver services complement the services that a state offers under its state plan. Waiver participants must have full access to State plan services, including Early and Periodic Screening, Diagnosis and Treatment (EPSDT) services when children participate in a waiver. Through a waiver, a state may also furnish “extended state plan services” that exceed the limits that apply under the state plan. There is no limit on the number of services that a state may offer in a waiver nor are states required to include specific services in the waiver.

In its application, a state must specify the scope and nature of each waiver service and any limits on amount, frequency and duration that the state elects to apply to a service. Also, the state must specify the qualifications of the individuals or agencies that furnish each waiver service.

Exclusion of Room and Board Except in limited circumstances, a state may not claim federal financial participation (FFP) for the costs of the room and board expenses of waiver participants. Room and board expenses must be met from participant resources or through other sources.

Number of Waiver Participants In its application, a state must specify the unduplicated number of individuals that the state intends to serve each year the waiver is in effect, pursuant to 42 CFR § 441.303(f)(6). It is up to the state to determine this number, based on the resources that the state has available to underwrite the costs of waiver services. As state resources permit, this number may be modified by amendment while the waiver is in effect.

Service Plan The waiver services that an individual will receive must be incorporated into a written person-centered service plan (all references throughout this document to “plan of care” or “service plan” refer to the person-centered service plan described under 42 CFR § 441.301(c)(2)). A state may claim FFP only for the waiver services that have been authorized in the participant’s service plan. The service plan must also include the non-waiver services and supports that are used to meet the needs of the participant in the community. In its application, the state must specify how the service plan is developed, including how the plan addresses potential risks to the individual.

Effective service plan development processes are essential in order to ensure that waiver participants will receive the services and supports that they need in order to function successfully in the community and to assure their health and welfare. Monitoring the implementation of the service plan is also a critical waiver operational activity.

Participant Direction of Waiver Services A state may provide that the waiver participant (or the participant’s representative) may direct and manage some or all of their waiver services. Participant direction may take a variety of forms, including the participant’s employing and directly supervising community support workers and exercising decision-making authority over an amount of waiver funds (the participant-directed budget). When a waiver provides for participant direction, the state is expected to make supports available to the participant as necessary to facilitate participant direction.

Assuring Participant Health and Welfare A waiver’s design must provide for continuously and effectively assuring the health and welfare of waiver participants, pursuant to 42 CFR § 441.302(a). Processes that are important for assuring participant health and welfare include (but are not necessarily limited to):

Specifying the qualifications of waiver providers and verifying that providers continuously meet these qualifications;

Periodically monitoring the implementation of the service plan and participant health and welfare;

Identifying and responding to alleged instances of abuse, neglect and exploitation that involve waiver participants; and Instituting appropriate safeguards concerning practices that may cause harm to the participant or restrict participant rights.

The renewal of a waiver is contingent on CMS determining that the state has effectively assured the health and welfare of waiver participants during the period that the waiver has been in effect.

In its application, the state must specify how it monitors performance in assuring health and welfare and the other waiver assurances by preparing and submitting a quality improvement strategy, discussed in more detail below.

Waiver Administration and Operation A waiver may be operated directly by the Medicaid agency or by another state agency (termed the “operating agency’) under a written agreement with the Medicaid agency, so long as the Medicaid agency retains ultimate authority and responsibility for the waiver in accordance with State Medicaid Agency administrative authority at 42 CFR § 431.10(b)(1). In addition, a state may provide that local or regional non-state organizations (e.g., county human services agencies) or contracted entities perform some waiver administrative and operational tasks, so long as the authority of the Medicaid agency over the waiver is maintained, and any delegation of function performance or authority is expressly identified in writing.

Participant Rights Pursuant to 42 CFR § 431.220, a state must provide that individuals have the opportunity to request a Medicaid Fair Hearing when they are not given the choice to receive waiver services, are denied the waiver services or providers of their choice, or their waiver services are denied, suspended, reduced or terminated.

Cost Neutrality In its application and each year during the period that the waiver is in operation, the state must demonstrate that the waiver is cost neutral, pursuant to 42 CFR § 441.303(f). In particular, the average per participant expenditures for the waiver and non-waiver Medicaid services must be no more costly than the average per person costs of furnishing institutional (and other Medicaid state plan) services to persons who require the same level of care.

Quality Improvement Strategy: Overview For the purpose of the application, the state is expected to have, at the minimum, systems in place to measure and improve its performance in meeting the waiver assurances that are set forth in 42 CFR §§ 441.301 and § 441.302. These assurances address important dimensions of waiver quality, including assuring that service plans are designed to meet the needs of waiver participants and that there are effective systems in place to monitor participant health and welfare. CMS recognizes that the design of the QIS will vary depending on the nature of the waiver target population, the services offered, and the waiver’s relationship to other public programs.

While the QIS must address the waiver assurances as a prerequisite, it can extend to aspects of waiver operations the state deems critical in achieving the waiver’s purpose and meeting the expectations of waiver participants and stakeholders. For example, the QIS might include identifying and tracking performance in achieving critical participant outcomes, assessing how effectively the waiver supports participants to direct their services, or improving the capabilities of waiver providers to effectively support participants. In other words, while the QIS as a prerequisite must address compliance with the essential waiver assurances, the state need not limit the scope.

Finally, CMS recognizes that quality improvement is dynamic, and the QIS may change over time. CMS expects that states will have all essential quality improvement components in place at the time the waiver application is submitted.

In March 2014, CMS issued guidance that clarifies sub assurances for each waiver assurance, describes how states may combine quality systems across multiple waivers and discusses some modifications in the IPG process. CMS also issued guidance in July 2022, announcing a standard HCBS measure set that may be used to satisfy some of the assurances outlined in the 2014 guidance (available in Attachment D).

Waiver Assurances and Other Federal Requirements The waiver assurances (and their component elements)must be included in the QIS pursuant to 42 CFR § 441.302. Also included in parentheses are references to the specific parts of the application that pertain to the respective assurance.

• Administrative Authority (Quality Improvement: Appendix A)

Assurance: The Medicaid agency retains ultimate administrative authority and responsibility for the operation of the waiver program by exercising oversight of the performance of waiver functions by other state and local/regional non-state agencies (if appropriate) and contracted entities.

• Level of Care (LOC) (Quality Improvement: Appendix B) Assurance: The state demonstrates that it implements the processes and instrument(s) specified in its approved waiver for evaluating/re-evaluating and applicant’s/waiver participant’s level of care consistent with care provided in a hospital, NF, or ICF/IID.

An evaluation for LOC is provided to all applicants for whom there is reasonable indication that services may be needed in the future.

The levels of care of enrolled participants are reevaluated at least annually or as specified in the approved waiver.

The processes and instruments described in the approved waiver are applied appropriately and according to the approved description to determine participant LOC.

• Qualified Providers (Quality Improvement: Appendix C) Assurance: The state demonstrates that it has designed and implemented an adequate system for assuring that all waiver services are provided by qualified providers.

The state verifies that providers initially and continually meet required licensure and/or certification standards and adhere to other standards prior to their furnishing waiver services.

The state monitors non-licensed/non-certified providers to assure adherence to waiver requirements.

The state implements its policies and procedures for verifying that provider training is conducted in accordance with state requirements and the approved waiver.

• Service Plan (Quality Improvement: Appendix D) Assurance: The state demonstrates it has designed and implemented an effective system for reviewing the adequacy of service plans for the waiver participants.

Service plans address all participants’ assessed needs (including health and safety risk factors) and personal goals, either by waiver services or through other means.

Service plans are updated/revised at least annually, when the individual’s circumstances or needs change significantly, or at the request of the individual.

Services are delivered in accordance with the service plan, including the type, scope, amount, duration, and frequency specified in the service plan.

Participants are afforded choice between/among waiver services and providers.

The state monitors service plan development in accordance with its policies and procedures.

• Health and Welfare (Quality Improvement: Appendix G) Assurance: The state demonstrates it has designed and implemented an effective system for assuring waiver participant health and welfare.

The state demonstrates on an ongoing basis that it identifies, addresses and seeks to prevent instances of abuse, neglect, exploitation and unexplained death.

The state demonstrates that an incident management system is in place that effectively resolves those incidents and prevents further similar incidents to the extent possible.

State policies and procedures for the use or prohibition of restrictive interventions (including restraints and seclusion) are followed.

The state establishes overall health care standards and monitors those standards based on the responsibility of the service provider as stated in the approved waiver.

• Financial Accountability (Quality Improvement: Appendix I) Assurance: The state must demonstrate that it has designed and implemented an adequate system for insuring financial accountability of the waiver program.

The state provides evidence that claims are coded and paid for in accordance with the reimbursement methodology specified in the approved waiver and only for services rendered.

The state provides evidence that rates remain consistent with the approved rate methodology throughout the five-year waiver cycle.

Continuous Quality Improvement CMS expects states to follow a continuous quality improvement (CQI) process in the operation of each waiver program. The process involves a continuous monitoring of the implementation of each waiver sub-assurance, methods for remediation or addressing identified individual problems and areas of noncompliance, and processes for a) aggregating collected information on discovery and remediation activities, and b) prioritizing and addressing needed systems changes on a regular basis.

Discovery Discovery consists of monitoring and data collection activities that identify whether and to what extent the State addresses compliance with the assurances. Relevant discovery sources may include record/chart reviews, financial reviews, interviews with participants and providers, observation of program operations; compilation of operations data such as incidents and complaints, claims data, fair hearings and appeals data or the results of licensure/certifications reviews. Discovery activities also might include conducting a structured review targeted to a geographic area or type of service, special studies, or securing the services of an outside entity to perform an oversight/evaluation function.

Discovery activities intended to evaluate how well the state has performed relative to a sub-assurance must be expressed as a performance measure (i.e., a measurable statement reflecting all aspects of the sub-assurance, consisting of a specifically stated numerator and denominator).

The numerator must represent the number of items determined to be compliant with the performance measure. The denominator must represent the number of items reviewed, which will usually be the same as the sample size for the performance measure. The state’s numerator and denominator must be consistent with the state’s sampling methodology. Sampling of less than 100 percent of the universe must be statistically valid. CMS strongly suggests a confidence interval with at least a 95 percent confidence level and +/- 5 percent margin of error. Lower sampling standards will require an explanation by the state. Such an approach provides a clear and concise evidence-based representation of a state’s compliance with an assurance. As such, a state is expected to provide information on the method by which each source of data is analyzed statistically/deductively or inductively, how themes are identified or conclusions drawn, and recommendations are formulated.

By way of illustration, the “qualified providers” assurance requires the state to verify on a periodic basis that providers meet approved licensure and/or certification standards and/or adhere to other state standards. In Appendix C-1/C-3, states are expected to include information about each waiver service’s provider qualifications, the entity (or entities) responsible for verifying provider qualifications, and how frequently the verification of provider qualifications is performed. One of the state’s monitoring activities should describe the source of collected information (for example, record reviews of all waiver program providers or a statistically significant representative sample) and the performance measurement of providers meeting the required qualifications, (that is, from a statistically significant sample, the number meeting approved qualifications (numerator) over the total number reviewed (denominator).

Remediation It is important to keep in mind that, in each instance, the QIS should specify a similar numerical approach for identified problems or areas of noncompliance, and corrective or remedial actions taken when problems are discovered. The approach is critical in that states must show compliance with the CMS statutory assurances. Therefore, while monitoring data/indicators reveal a level of system performance for discovery activities, when the system performance is less than 100%, a remediation plan is necessary to correct identified areas of noncompliance.

Those individually identified areas require correction in order to support compliance with the assurance, and quality improvement. Specific activities include:

• The remedial action to be taken;

• The timeline for when remediation is effectuated;

• Those responsible for addressing remedial activities; and,

• The frequency with which performance/compliance is measured.

While it is up to the state to identify the types of information used to measure performance related to the assurances, it should be sufficient to conclude compliance with the assurance has been met. Often more than one data source can be tapped to evaluate performance, particularly related to the health and welfare assurance.

Measuring performance against the assurances may occur at different intervals, at different frequency rates, and with varying intensity. The state, however, should be able to verify to its stakeholders and CMS that it has measured its performance against the assurances no less than annually. The approach or frequency of measurement may vary from year to year, particularly when the state finds that it routinely meets the requirements and assurances.

Sampling Approach The CMS quality requirements are founded on an evidence-based approach. CMS requests from the state evidence that it meets the assurances, and that it applies a continuous quality improvement approach to the assurances. CMS therefore relies on the evidence or data produced by the State to substantiate compliance. For that reason, it is critical that states can assert with a degree of confidence that evidence produced is valid and reliable. Without such certainty, it is difficult at best for the federal government, waiver recipients, or stakeholder groups to have confidence in the state’s reported performance. CMS strongly urges state to have a solid sampling approach to the evidence it collects. A reference guide on sampling is available in Attachment D of the waiver application resource manual.

Roles and Responsibilities States are expected to describe the roles and responsibilities of the parties involved in the quality improvement strategy as they relate to discovery, remediation, and improvement activities. The description should include the roles and responsibilities of the Medicaid agency, operating agency and non-state entities (as applicable), other state agencies, participants, families and advocates, providers, and other contractors (if appropriate) in operationalizing the processes in the quality improvement strategy such as collecting and analyzing individual and system-level information, determining whether the waiver requirements and assurances are met, implementing remediation, and planning system improvement activities.

The focus of this QIS element is on identifying who is involved in appraising performance in meeting the waiver assurances based on the results of discovery processes. The parties involved in performance appraisal may vary by assurance, depending on the nature of the assurance. The state may organize the involvement of individuals and entities in any number of ways including, but not limited to, establishing a quality improvement unit, forming quality improvement councils, and establishing standing committees. It is not necessary that the Medicaid agency directly conduct every aspect of the quality improvement strategy. However, since the QIS focuses on meeting the waiver assurances, it is necessary that the Medicaid agency be the source of the delegation of activities in the QIS, and the recipient of the monitoring, remediation and system improvement reports that pertain to meeting the assurances. The Medicaid agency must also perform its own monitoring of all delegated activities in accordance with Medicaid administrative authority at 42 CFR § 431.10(b)(1).

CMS urges states to widen the circle of parties involved in waiver performance appraisal to include waiver participants, families (when appropriate), providers and other parties who are directly affected by waiver operations.

Example: Assuring health and welfare requires multiple discovery strategies that generate information about abuse, neglect, exploitation, accidents and injuries, hospitalizations, medication errors, the use of restraints, and self-reports about safety. The QIS might designate one entity or groups of individuals (participants, providers, advocates) to evaluate the utilization of restraints, determine whether improvement strategies are necessary and develop those strategies and specify another entity or groups of individuals to evaluate hospitalizations, accidents and injuries to determine whether there are areas, providers or participants who may warrant special attention.

Example: Monitoring participant service planning and service delivery generates information about implementation of the service plan that might be used by the operating agency alone to evaluate performance, or the operating agency might engage case managers to evaluate information from discovery and to develop improvement strategies. The Medicaid agency may use the same information reports to determine whether the operating agency’s oversight system is effective.

The state may create regional or statewide quality councils made up of participants, advocates, providers, clinicians, quality improvement specialists, and government managers to receive recommendations from various committees and determine what strategies should be adopted.

However, the creation of quality councils is not required. It is one mechanism that a state may use to appraise performance and secure input regarding quality improvement strategies.

Comprehensive Quality Improvement Strategy –Displaying and Printing in the Web-Based Application While states are expected to describe components of the quality improvement strategy for the waiver in multiple appendices of the application, there is capability within the web-based application to display and print the quality improvement strategy in its entirety. From the Print Options Menu in the web-based application, simply click on the button entitled “Print/Display Quality Improvement Strategy.” This function will extract the information from all relevant areas in the application to assemble the comprehensive quality improvement strategy for the waiver in one consolidated document that can be either saved or printed.

Federal Administration of the HCBS Waiver Authority The HCBS waiver authority is administered by the Center for Medicaid and CHIP Services (CMCS) at the Centers for Medicare & Medicaid Services (CMS), U.S. Department of Health and Human Services (HHS). Within CMCS, the Medicaid Benefits and Health Programs Group (MBHPG) Division of Long-Term Services and Supports (DLTSS) has lead responsibility for developing policies concerning the HCBS waiver authority and technical assistance to states in the design and operation of waivers.

The Medicaid and CHIP Operations Group (MCOG) Division of HCBS Operations and Oversight (DHCBSO) is the first point-of-contact for the states concerning the HCBS waiver program. DHCBSO is also tasked with oversight of the waivers and engaging in ongoing dialogue with the state concerning waiver operations and performance. DLTSS and DHCBSO share responsibilities for reviewing waiver applications and requests for amendments and providing technical assistance to states concerning the design and operation of waivers.

HCBS Waiver Services, the ADA and Olmstead CMS recognizes the important role that Medicaid plays in states’ efforts to ensure compliance with the ADA and Olmstead. In the early 2000s, CMS (then the Health Care Financing Administration) issued a series of letters to State Medicaid Directors to identify policies, tools, and expectations for home and community-based services (HCBS) and their role in Olmstead compliance. These letters, collectively known as “the Olmstead letters,” identified services that help transition individuals from institutional to community settings and maintain their community living status. The letters also described the obligations of states under federal Medicaid rules to provide services necessary to assure the health and welfare of individuals served under Medicaid section 1915(c) waiver programs. Although this guidance is intended with respect to the Medicaid program, we note that states have obligations pursuant to the Americans with Disabilities Act, section 504 of the Rehabilitation Act, and the Supreme Court’s Olmstead decision. Approval of any Medicaid waiver action does not address the state’s independent obligations under the Americans with Disabilities Act or the Supreme Court’s Olmstead decision.

HCBS Waiver Resources on the Web In addition to the web-based application for section1915(c) waivers located at https://wms-mmdl.cms.gov/WMS/faces/portal.jsp, CMS makes available assorted information and resources via its website (www.medicaid.gov). General information about the HCBS waiver program along https://wms-mmdl.cms.gov/WMS/faces/portal.jsp https://wms-mmdl.cms.gov/WMS/faces/portal.jsp http://www.medicaid.gov/ with links to other pertinent information is located at https://www.medicaid.gov/medicaid/hcbs/guidance/index.html.

Version 3.7 HCBS Waiver Application Organization The Version 3.7 HCBS Waiver Application consists of an application “module” and ten appendices, each of which addresses specific dimensions of waiver operations.

• Application (Module1). The initial section of the application contains the formal state request to operate a section 1915(c) HCBS waiver, including the request for waiver(s) of specific sections of the Act. This module also includes a brief description of the waiver’s goals, objectives, organization, and service delivery methods. It also contains the fundamental assurances and additional federal requirements that apply to the operation of a waiver.

• Appendix A: Waiver Administration and Operations. This Appendix identifies the state agency that is responsible for the day-to-day operation of the waiver along with other entities that are involved in its operation, including as applicable contracted entities and local/regional non-state entities. The distribution of certain waiver operational responsibilities among these entities also is specified. This Appendix addresses the question: “What entities are involved in the operation of the waiver?”

• Appendix B: Participant Access and Eligibility. This Appendix is designed to answer the question: “Who receives waiver services?” In this Appendix, a state specifies: (a) the waiver’s target group(s); (b) the individual cost limit (if any) that applies to individuals entering the waiver; (c) the number of individuals who will be served in the waiver and how this number will be managed during the period that the waiver is in effect; (d) the Medicaid eligibility groups served in the waiver; (e) applicable post-eligibility treatment of income policies; (f) procedures for the evaluation of level of care of prospective entrants to the waiver and the periodic re-evaluation of the level of care of waiver participants; (g) how individuals are afforded freedom of choice in selecting between institutional and home and community-based services; and, (h) how the state provides for meaningful access to the waiver by individuals with Limited English Proficiency (LEP).

• Appendix C: Participant Services. This Appendix is designed to answer the question:

“What services does the waiver offer?” In this Appendix, the state establishes the specifications for each waiver service and any limitations that apply to a service or the overall amount of waiver services. A service specification template (Appendix C-3) consolidates information about each waiver service (including its scope, provider qualifications, and whether the service may be participant-directed).

Pre-specified service definitions are not embedded in the Version 3.7 waiver application.

[N.B., “Core service definitions” that a state may adapt are included as an attachment to the Appendix C instructions.] This Appendix also captures information about state policies concerning criminal history/background and abuse registry checks, payments to legally responsible individuals for the provision of personal care and to relatives/legal guardians for the provision of services, and the 1915(c) home and community-based setting requirements.

• Appendix D: Participant-Centered Planning and Service Delivery. In this Appendix, the State describes how the person-centered service plan (plan of care) is developed along https://www.medicaid.gov/medicaid/hcbs/guidance/index.html with how the state monitors (a) the implementation of the service plan and (b) participant health and welfare. This Appendix is designed to answer two questions: “How are participant needs identified and addressed during the person-centered service plan development process?” and “How does the state monitor the delivery of waiver services?”

• Appendix E: Participant Direction of Services. This Appendix is designed to answer the questions: “What authority do participants have to direct some or all of their waiver services?” and “How are participants supported in directing their services?” This Appendix permits a state to specify the opportunities afforded to waiver participants to direct and manage their waiver services. This Appendix is completed only when the waiver offers one or both of the participant direction opportunities contained in the Appendix. The new application enables a state to offer participant direction in a waiver in which other service delivery methods also are used or, alternatively, provide that participant direction is the principal service delivery method that is used in the waiver.

• Appendix F: Participant Rights. In this Appendix, a state describes how it affords waiver participants the opportunity to request a Fair Hearing as well as any alternate processes that are available to resolve disputes or address participant complaints/ grievances. This Appendix addresses the question: “How are participant rights protected?”

• Appendix G: Participant Safeguards.