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How is Federal Home and Community Based Services Definition for Medicaid Funding Impacting Adult Day Centers in Your State?

Does your center receive funding from Medicaid under a state waiver?  The new HCBS rules published by the Centers for Medicare and Medicaid Services (CMS) have created an opportunity for adult day centers to be much more visible, but you have to be “at the table” to engage with policy makers.

Deadlines Loom

Some state Medicaid leaders may be scurrying to draft a statewide transition plan in response to the CMS definition of home and community-based services (HCBS), given the upcoming one year anniversary since the regulation became effective March 17, 2014. Find out what’s happening in your state at The outcome-oriented definition moves away from defining HCBS based on setting location, geography or physical characteristics. Statewide transition plans will be used to describe how every HCBS option will comply with the requirements.

Adult Day Centers Need to Be Informed and Involved


Find out what’s happening in your state at

Adult day centers, especially in rural or frontier areas, may be part of a larger building or on the campus of an excluded setting due to infrastructure needs. States provide a wide variety of non-residential services under HCBS programs, ranging from extended state plan services (which may be highly clinical/medical in nature but provided in an amount, scope or duration not available under the regular state plan benefit) to services that may support the individual in regular community-based activities (e.g., supported employment, pre-vocational, habilitation, adult day, clubhouse models and psychosocial rehabilitation). The state’s determinations about these settings and the extent to which changes in the settings are necessary to comply with the requirements may be different than state decisions/actions for a setting that is less medical/clinical in nature. Therefore, it is critical that adult day center representatives be engaged in the planning process as states tailor their review to the type of services relevant in their state. Note that the federal regulations set the floor for requirements, but states may elect to set more stringent requirements for what constitutes an acceptable HCBS setting.

States Determine Compliance Through Assessment

According to a recent publication by CMS exploring questions about non-residential HCBS settings, in some cases such as medical adult day programs when the service provided is highly clinical/medical in nature, the nature of the service will impact how the state addresses the HCBS settings requirements1. States should consider carefully the extent to which settings compliance is met due to the nature of the service and/or the HCBS qualities. For example, a service that is primarily rehabilitative (offers physical, speech, occupational and other therapies), but also offers respite to family caregivers, may be short-term in duration and requires by definition that all participants have a disability. Another type of service may be designed to primarily offer personal care, social recreational supports and respite for family caregivers, and is more long-term in duration. The manner in which each of these services meets the HCBS settings requirements may vary.

CMS encourages states to perform an assessment using the regulatory standards. The focus would be on “settings that isolate” as well as facilities that are attached to an excluded setting. States create the assessments used to determine compliance or noncompliance. CMS will not mediate between states and HCBS providers. The mandatory public comment periods provide multiple opportunities for advocacy.

Person-Centered Care Matters

Person-centered care is not new to adult day providers, so its inclusion in the regulation is not surprising. State plans likely reference guidance provided in Section 2402(a) of the Affordable Care Act regarding person-centered plans for persons funded through Medicaid HCBS to align with the new HCBS regulations. Person-centered plans are to be reviewed for each person served every 12 months. Just Like Home: An Advocate’s Guide for State Transitions Under the New Medicaid HCBS Rules provides a wealth of information about the person-centered planning process and service plans.


If a state determines that HCBS are currently being provided in settings that do not provide opportunities for participants to seek employment and work in competitive settings, engage in community life, control personal resources, and access the community to the same degree of access as individuals not receiving Medicaid HCBS, or if individuals receiving HCBS are not residing in settings that meet the HCBS settings requirements, the state has until March 2019 to bring its HCBS programs into compliance with the rule, consistent with its State Transition Plan. States can claim for federal matching funds for these services during the transition period.


For more information about the Medicaid HCBS regulation, including a settings requirements toolkit, please visit: is a platform to share information and resources regarding the new Home and Community Based Settings (HCBS) rule and stay informed about steps each state is taking to comply with the new rule. The website is a project of the Association of University Centers on Disabilities, the National Association of Councils on Developmental Disabilities, and the National Disability Rights Network. It includes news and documents from states, advocacy resources, comment deadlines, and links to the final rule and official guidance.

The Just Like Home: An Advocate’s Guide for State Transitions Under the New Medicaid HCBS Rules guide provides analysis and recommendations for multiple aspects of the new regulations, including determining which settings are disqualified for HCBS, and enforcing consumer protections.

—By Teresa D. Johnson, MBA, NADSA Managing Director


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