In 2014, the Centers for Medicare and Medicaid Services (“CMS”) finalized requirements for the settings in which Medicaid HCBS services may be provided under 1915(c) waivers (the “Settings Rule”). In 2016, the Pennsylvania Office of Long-Term Living (“OLTL”) provided further guidance to providers on the Settings Rule, and listed the following as locations for which HCBS Medicaid payments would not be made.
- A nursing facility;
- An institution for mental diseases;
- An intermediate care facility for individuals with intellectual disabilities;
- A hospital; or
- Any other locations that have qualities of an institutional setting as determined by the Secretary of the federal Department of Health and Human Services.
OLTL further clarified that any setting that is located in a building that is also a publicly or privately operated facility that provides inpatient institutional treatment, or in a building on the grounds of, or immediately adjacent to, a public institution, or any other setting that has the effect of isolating individuals receiving Medicaid HCBS from the broader community of individuals not receiving Medicaid HCBS will be presumed to be a setting that has the qualities of an institution.
On December 29, 2021, OLTL issued MA Bulletin 59-21-03 to provide additional guidance to HCBS providers billing for the provision of services under Community HealthChoices (“CHC”) and the OBRA waivers. This Bulletin details the “heightened scrutiny” test that OLTL will apply when evaluating whether HCBS providers operate consistent with the Settings Rule. OLTL advises that it will review the following HCBS locations, which OLTL presumes are “institutional” and thus not entitled to Medicaid HCBS payments:
- Settings that are located in a building that is also a publicly or privately operated facility that provides inpatient institutional treatment.
- Settings that are in a building located on the grounds of, or immediately adjacent to, a public institution.
- Any other settings that have the effect of isolating individuals receiving Medicaid HCBS from the broader community of individuals not receiving Medicaid HCBS.
- Congregate residential settings where 2 or more unrelated persons live and receive HCBS services and where the setting is owned or operated by an entity that has a financial interest in an HCBS provider.
Currently, despite several extensions by CMS, the deadline for compliance with the Settings Rule is March 17, 2023. OLTL will be issuing letters to those HCBS providers who will be reviewed under this heightened scrutiny test. If you operate HCBS services under a 1915(c) waiver or receive payments under CHC, it is imperative to review your operations under this Settings Rule. Long-Term Care providers who furnish HCBS services through adult day or home care operations on their campus, or with offices located within their nursing facility, may be subject to this heightened scrutiny test, and should prepare for OLTL review.
If you have questions about the Settings Rule or how to evaluate your current operations, please do not hesitate to contact us.
LATSHA DAVIS & MARSHALL, P.C