CMS Issues Rule to Implement Community First Choice Option, Punts on What is a Community-Based Setting

Hot off the presses:  The final rules to implement the Community First Choice Option, a provision of the Affordable Care Act that will enable states to expand their provision of community-based services to people with disabilities.  The final rules, which were a long time coming, will provide a framework for states to now begin submitting plan amendments that will include this new option.  It's unclear how many states will choose to do this, but the new option can be a major tool in assisting states in complying with their Olmstead obligations.

There is one dark cloud, though.  After all these months, CMS decided not to issue the portion of its rule that defined what constitutes a community-based setting.  This is obviously a crucial omission.  CMS explained its decision this way:

In consideration of the comments received, we are not finalizing the setting provisions of proposed §441.530 at this time. The comments received indicated to us that the proposed provisions caused more confusion and disagreement than clarity and we believe further discussion and consideration on this issue is necessary. In addition, similar language proposed in the notice of proposed rulemaking for revisions to the 1915(c) waiver program garnered significant public comment. Therefore, we intend to issue a new proposed regulation that will provide setting criteria for CFC that we developed in light of the comments received and to invite additional public comment on our proposal. We plan to propose home and community-based settings shall have all of the following qualities, and such other qualities as the Secretary determines to be appropriate, based on the needs of the individual as indicated in their person-centered service plan:

● The setting is integrated in, and facilitates the individual’s full access to, the greater community, including opportunities to seek employment and work in competitive integrated settings, engage in community life, control personal resources, and receive services in the community, in the same manner as individuals without disabilities;
● The setting is selected by the individual from among all available alternatives and is identified in the person-centered service plan;
● An individual’s essential personal rights of privacy, dignity and respect, and freedom from coercion and restraint are protected;
● Individual initiative, autonomy, and independence in making life choices, including but not limited to, daily activities, physical environment, and with whom to interact are optimized and not regimented;
● Individual choice regarding services and supports, and who provides them, is facilitated.;
● In a provider-owned or controlled residential setting, the following additional conditions must be met. Any modification of the conditions, for example, to address the
safety needs of an individual with dementia, must be supported by a specific assessed need and documented in the person-centered service plan: 

++ The unit or room is a specific physical place that can be owned, rented or occupied under another legally enforceable agreement by the individual receiving services, and the individual has, at a minimum, the same responsibilities and protections from eviction that tenants have under the landlord tenant law of the State, county, city or other designated entity;
++ Each individual has privacy in their sleeping or living unit:
-- Units have lockable entrance doors, with appropriate staff having keys to doors;
--Individuals share units only at the individual’s choice; and
--Individuals have the freedom to furnish and decorate their sleeping or living units;
++ Individuals have the freedom and support to control their own schedules and activities, and have access to food at any time;
++ Individuals are able to have visitors of their choosing at any time; and
++ The setting is physically accessible to the individual.

We also plan to propose that home and community-based settings do not include
the following:

1) A nursing facility;
2) An institution for mental diseases;
3) An intermediate care facility for the mentally retarded;
4) A hospital providing long-term care services; or
5) Any other locations that have qualities of an institutional setting, as determined
by the Secretary. The Secretary will apply a rebuttable presumption that a setting is not a home and community-based setting, and engage in heightened scrutiny, for any setting that is located in a building that is also a publicly or privately operated facility that provides inpatient institutional treatment in a building on the grounds of, or immediately adjacent to, a public institution or disability-specific housing complex. CMS will engage States in discussion and review any pertinent information submitted during the SPA review process to determine if these facilities meet the HCBS qualities set forth in the proposed rule.

While we are proposing the aforementioned setting requirements in a new proposed rule, the CFC option is in full effect. CMS will rely on the proposed setting provision as we review new 1915(k) State plan options and we will fully expect States to comply with the setting requirements and design and implement the benefit accordingly. To the extent there are changes when this language is finalized, we are committed to permitting States with an approved section 1915(k) State plan amendment a reasonable transition period, at a minimum of one year, to make any needed program changes to come into compliance with the final setting requirements. We are committed to minimizing disruption to State systems that have been established based upon compliance with these proposed regulations. 

It is our intent to and to apply this criteria to sections 1915(c) and 1915(i) of the Act authorities. 

As expressed earlier, we believe further discussion is necessary and we believe this can be accomplished by soliciting public comments on the modified criteria. Therefore, we are not finalizing the setting provision at this time.

The decision to punt on the standards for what constitutes a community-based setting will be quite disappointing to disability rights advocates, and it might greatly limit the degree to which the CFC Option promotes real integration.  The proposed regulation to define what constitutes a community setting appears here.  The proposed rule should appear in the Federal Register on May 3, and the comment period on that rule will close 30 days later.