July 14, 2020

CMS Extends Deadlines for HCBS Settings Rule

BY LeadingAge

On July 14, the Centers for Medicare & Medicaid Services (CMS) issued new guidance for states with respect to the home and community-based services (HCBS) Settings Rule. Citing the COVID-19 pandemic, CMS is extending key deadlines for compliance with the Settings Rule. While these are applied to state agencies, many LeadingAge members will be ultimately subject to the Settings Rule and should note these updates.

Notably, the guidance does not make significant policy changes to the Settings Rule, focusing mostly on extending previously set deadlines. Providers should work with their state agencies to ensure compliance with the Settings Rule. LeadingAge will continue to monitor updates to the Settings Rule and provide support to our members as they pursue compliance.

Final Compliance Deadline

The final compliance deadline for the Settings Rule is now March 17, 2023. Previously, the deadline was March 17, 2022. It is after this point that federal reimbursement for HCBS providers will be conditioned on compliance with the Settings Rule.

Heightened Scrutiny Deadlines

In March 2019, CMS issued guidance on heightened scrutiny for the HCBS Settings Rule that set forth two deadlines for states that were set to take effect this year. See LeadingAge’s summary of that guidance here.

Providers Identified as Having the Effect of Isolating Individuals

By July 2020, states were to submit to CMS a list of providers they had identified as having the effect of isolating individuals but had since remediated and came into compliance with the rule. The deadline for this aspect of the rule is now July 1, 2021. If a provider is on this list, they do not need to undergo heightened scrutiny at the federal level to be deemed compliant.

Providers who are identified by the state as being noncompliant with the Settings Rule due to isolating individuals that have not remediated and come into compliance will need to undergo federal heightened scrutiny. States previously were to submit a list of such providers to CMS by July 2020 for heightened scrutiny by October 2020. The timeline for this is now July 1, 2021 for the list of providers to be submitted to CMS, and October 31, 2021 for CMS to complete the heightened scrutiny review.

Providers Identified as Being in the Same Building, Grounds or Adjacent to Institutions

All providers identified by states as being located in the same building as a public or private institution, or are on the grounds of or adjacent to a public institution must undergo heightened scrutiny from CMS before being considered compliant with the Settings Rule. Previously, states were to submit a list of such providers to CMS by October 2020. The deadline for states to submit this list is now March 31, 2021.

Providers Who Have Changed Significantly as a Result of COVID-19

The new guidance also includes this language about providers who have changed their operations as a result of the pandemic:

If a setting has made significant and permanent changes to the services provided or the location in which those services are provided, the state may be required to reassess the setting, after the PHE, for compliance with the Settings Rule requirements.

No further guidance is provided on this aspect of the document. As more becomes available, we will share with our members.