Home & Community Based Waiver Requests and Supporting Regulations; 42 CFR 440.180, 441.300-.310

Application for a §1915(c) Home and
Community-Based Waiver [Version 3.6, January 2019]

Instructions, Technical Guide
and Review Criteria
Release Date:
January 2019

CENTERS FOR MEDICARE & MEDICAID SERVICES

Disabled and Elderly Health Programs Group
Center for Medicaid and State Operations
Centers for Medicare & Medicaid Services
Department of Health and Human Services

Table of Contents

Introduction .................................................................................................................................................. 1
Purpose ..................................................................................................................................................... 1
Overview of the §1915(c) HCBS Waiver Authority ................................................................................... 1
Version 3.6 HCBS Waiver Application ....................................................................................................... 2
Waiver Application Format: .................................................................................................................. 2
Instructions – Overview ............................................................................................................................ 2
Description of the §1915(c) HCBS Waiver Authority .................................................................................... 5
Overview ................................................................................................................................................... 5
Statutory Basis and Legislative History of the HCBS Waiver Authority .................................................... 5
Principal Features of the HCBS Waiver Authority..................................................................................... 6
Basic Framework................................................................................................................................... 6
Waiver Application Process .................................................................................................................. 6
Waivers Granted ................................................................................................................................... 6
Individuals Served by a Waiver ............................................................................................................. 7
Services Offered Under a Waiver.......................................................................................................... 7
Exclusion of Room and Board ............................................................................................................... 7
Number of Waiver Participants ............................................................................................................ 8
Service Plan ........................................................................................................................................... 8
Participant Direction of Waiver Services .............................................................................................. 8
Assuring Participant Health and Welfare.............................................................................................. 8
Waiver Administration and Operation.................................................................................................. 9
Participant Rights .................................................................................................................................. 9
Cost Neutrality ...................................................................................................................................... 9
Quality Improvement Strategy: Overview ................................................................................................ 9
Waiver Assurances and Other Federal Requirements............................................................................ 10
Continuous Quality Improvement .......................................................................................................... 11
Discovery............................................................................................................................................. 11
Remediation........................................................................................................................................ 12
Sampling Approach ............................................................................................................................. 12
Roles and Responsibilities................................................................................................................... 13
Federal Administration of the HCBS Waiver Authority........................................................................... 14
Strengthening HCBS Waiver Quality Assurance/Quality Improvement ................................................. 14

HCBS Waiver Services, the ADA and Olmstead....................................................................................... 15
HCBS Waiver Resources on the Web ...................................................................................................... 15
Version 3.6 HCBS Waiver Application Organization ................................................................................... 17
Ongoing CMS Waiver Application Activities ........................................................................................... 18
Implementation of the Web-Based Application ................................................................................. 18
Additional Activities ............................................................................................................................ 18
Waiver Application Submission Requirements, Processes and Procedures............................................... 21
Overview ................................................................................................................................................. 21
Submission of Applications ..................................................................................................................... 21
Making a Submission Using the Web-Based Application ................................................................... 21
Making Changes to a Submitted Application...................................................................................... 22
Joint Central Office/Regional Office Waiver Review Process ................................................................. 22
Requesting Division Review ................................................................................................................ 22
Policies Concerning New and Renewal Waiver Applications.................................................................. 23
90-Day Clock........................................................................................................................................ 23
New Waiver Applications.................................................................................................................... 24
Special Considerations: §1915(c) Waivers that Operate with Concurrent Managed Care ................ 25
Special Considerations: §1915(a) Authority Concurrently with a 1915(c) Waiver ............................. 25
New Waiver to Replace an Approved Waiver..................................................................................... 25
Renewal Applications.......................................................................................................................... 26
Other Changes to Approved Waivers ................................................................................................. 27
Extensions ........................................................................................................................................... 28
Policies Concerning Waiver Amendments.............................................................................................. 29
Related Topics......................................................................................................................................... 31
CMS Technical Assistance ................................................................................................................... 31
Administrative Claiming...................................................................................................................... 31
Waiver Termination ............................................................................................................................ 31
Post Approval Activities .............................................................................................................................. 34
Overview ................................................................................................................................................. 34
Annual Waiver Report............................................................................................................................. 34
Annual Report Form CMS-372(S)........................................................................................................ 34
Review of the Annual Waiver CMS-372(S) Report.............................................................................. 35
Ongoing CMS-State Dialogue During the Waiver Period........................................................................ 35

CMS Oversight of State Waiver Operations........................................................................................ 36
CMS Report to the State Prior to Waiver Renewal................................................................................. 36
Detailed Instructions for the Completion of the Version 3.6 §1915(c)HCBS Waiver Application .............. 38
Overview ................................................................................................................................................. 38
Using the Application.................................................................................................................................. 38
Overview ................................................................................................................................................. 38
Application Format ................................................................................................................................. 38
Detailed Instructions, Technical Guidance and Review Criteria ................................................................. 41
Application for a §1915(c) Home and Community-Based Services Waiver (Module 1)............................. 41
Overview ................................................................................................................................................. 41
1.

Request Information ........................................................................................................................... 42
Overview ................................................................................................................................................. 42
Item 1-A: State .................................................................................................................................... 42
Item 1-B: Waiver Title ......................................................................................................................... 42
Item 1-C: Type of Request................................................................................................................... 42
Technical Guidance ............................................................................................................................. 42
Item 1-D: Type of Waiver.................................................................................................................... 42
Technical Guidance ............................................................................................................................. 43
Item 1-E.1: Proposed Effective Date ................................................................................................... 43
Technical Guidance ............................................................................................................................. 43
Item 1-E.2: Approved Effective Date .................................................................................................. 43
Item 1-F. Level(s) of Care .................................................................................................................... 43
Technical Guidance ............................................................................................................................. 44
Item 1-G: Concurrent Operation with Other Programs.......................................................................... 45
Instructions ......................................................................................................................................... 45
Technical Guidance ............................................................................................................................. 45
Item 1-H: Dual Eligibility for Medicaid and Medicare............................................................................. 46
Instructions ......................................................................................................................................... 46

2. Brief Waiver Description......................................................................................................................... 47
Instructions ......................................................................................................................................... 47
Technical Guidance ............................................................................................................................. 47
3. Components of the Waiver Request....................................................................................................... 47
Instructions ......................................................................................................................................... 47

Technical Guidance ............................................................................................................................. 47
4. Waiver(s) Requested............................................................................................................................... 48
Overview ............................................................................................................................................. 48
Item 4-A: Comparability.......................................................................................................................... 48
Technical Guidance ............................................................................................................................. 48
Item 4-B: Income and Resources for the Medically Needy .................................................................... 48
Instructions ......................................................................................................................................... 48
Technical Guidance ............................................................................................................................. 48
Item 4-C: Statewideness ......................................................................................................................... 49
Instructions ......................................................................................................................................... 49
Technical Guidance ............................................................................................................................. 49
5. Assurances .............................................................................................................................................. 51
Overview/Discussion............................................................................................................................... 51
6. Additional Requirements ........................................................................................................................ 51
Overview ................................................................................................................................................. 51
Discussion of Additional Requirements .................................................................................................. 51
Item 6-A: Service Plan ......................................................................................................................... 51
Item 6-B: Inpatients ............................................................................................................................ 52
Item 6-C: Room and Board.................................................................................................................. 52
Item 6-D: Access to Services ............................................................................................................... 53
Item 6-E: Free Choice of Provider ....................................................................................................... 53
Item 6-F: FFP Limitation ...................................................................................................................... 54
Item 6-G: Fair Hearing......................................................................................................................... 54
Item 6-H: Quality Improvement.......................................................................................................... 54
Item 6-I: Public Input........................................................................................................................... 54
Technical Guidance ............................................................................................................................. 54
Item 6-J: Notice to Tribal Governments.............................................................................................. 55
Technical Guidance ............................................................................................................................. 55
Item 6-K: Limited English Proficient Persons ...................................................................................... 56
7. Contact Person(s).................................................................................................................................... 56
Item 7-A: State Medicaid Agency Representative .................................................................................. 56
Instructions ......................................................................................................................................... 56
Technical Guidance ............................................................................................................................. 56

Item 7-B: Operating Agency Representative .......................................................................................... 56
Instructions ......................................................................................................................................... 56
Technical Guidance ............................................................................................................................. 56
8. Authorizing Signature ............................................................................................................................. 56
Instructions ......................................................................................................................................... 56
Technical Guidance ............................................................................................................................. 56
Attachments (if applicable)......................................................................................................................... 57
Attachment #1: Changes from Previous Approved Waiver That May Require a Transition Plan (if
applicable)........................................................................................................................................... 57
Instructions: ........................................................................................................................................ 57
Technical Guidance ................................................................................................................................. 57
Instructions ......................................................................................................................................... 57
Technical Guidance ............................................................................................................................. 57
Appendix A: Waiver Administration and Operation ................................................................................... 59
Brief Overview......................................................................................................................................... 59
Requirements: Waiver Administration and Operation........................................................................... 59
Detailed Instructions for Completing Appendix A .................................................................................. 61
Item A-1: State Line of Authority for Waiver Operation..................................................................... 61
Item A-2: Medicaid Agency Oversight of Waiver Administration........................................................... 63
Item A-2-a: Operation by a Division/Unit within the SMA other than the Medical Assistance Unit.. 63
Item A-2-b: Operation by a non-SMA State Entity.............................................................................. 64
Waiver Operational and Administrative Functions ................................................................................ 65
Item A-3: Use of Contracted Entities ...................................................................................................... 67
Instructions ......................................................................................................................................... 67
Technical Guidance ............................................................................................................................. 67
§1915(c) Waivers that Operate with Concurrent Managed Care....................................................... 68
Item A-4: Role of Local/Regional Non-State Entities .............................................................................. 68
Instructions ......................................................................................................................................... 68
Technical Guidance ............................................................................................................................. 68
Item A-5: Responsibility for Assessment of Performance of Contracted and/or Local/Regional NonState Entities ........................................................................................................................................... 69
Instructions ......................................................................................................................................... 69
Technical Guidance ............................................................................................................................. 70
Item A-6: Assessment Methods and Frequency ..................................................................................... 70

Instructions ......................................................................................................................................... 70
Technical Guidance ............................................................................................................................. 70
Item A-7: Distribution of Waiver Operational and Administrative Functions ........................................ 71
Instructions ......................................................................................................................................... 71
Technical Guidance ............................................................................................................................. 71
CMS Review Criteria............................................................................................................................ 71
Quality Improvement: Administrative Authority of the Single State Medicaid Agency ............................ 72
Instructions ......................................................................................................................................... 72
Technical Guidance ............................................................................................................................. 72
Appendix B: Participant Access and Eligibility ............................................................................................ 73
Brief Overview......................................................................................................................................... 73
Appendix B-1: Specification of the Waiver Target Group(s)....................................................................... 74
Overview ................................................................................................................................................. 74
Detailed Instructions for Completing Appendix B-1 ............................................................................... 75
Item B-1-a: Target Group(s) ................................................................................................................ 75
Item B-1-b: Additional Criteria............................................................................................................ 76
Item B-1-c: Transition of Individuals Affected by Maximum Age Limit .............................................. 77
Appendix B-2: Individual Cost Limit ............................................................................................................ 78
Overview ................................................................................................................................................. 78
Detailed Instructions for Completing Appendix B-2 ............................................................................... 79
Item B-2-a: Individual Cost Limit......................................................................................................... 79
Item B-2-b: Method of Implementation of the Individual Cost Limit................................................. 80
Item B-2-c: Participant Safeguards ..................................................................................................... 81
Appendix B-3: Number of Individuals Served ............................................................................................. 82
Overview ................................................................................................................................................. 82
Detailed Instructions for Completing Appendix B-3 ............................................................................... 82
Item B-3-a: Unduplicated Number of Participants ............................................................................. 82
Item B-3-b: Limitation on the Number of Participants Served at any Point in Tim ............................ 83
Item B-3-c: Reserved Waiver Capacity................................................................................................ 84
Item B-3-d: Scheduled Phase-In or Phase-Out.................................................................................... 85
Attachment #1 to Appendix B-3: Waiver Phase-In or Phase-Out Schedule ....................................... 85
Item B-3-e: Allocation of Waiver Capacity.......................................................................................... 87
Item B-3-f: Selection of Entrants to the Waiver.................................................................................. 88

Appendix B-4: Medicaid Eligibility Groups Served in the Waiver ............................................................... 89
Overview ................................................................................................................................................. 89
Detailed Instructions for Completing Appendix B-4 ............................................................................... 89
Item B-4-a: State Classification ........................................................................................................... 89
Item B-4-b: Medicaid Eligibility Groups Served in the Waiver............................................................ 90
Appendix B-5: Post-Eligibility Treatment of Income................................................................................... 92
Overview ................................................................................................................................................. 92
Post-Eligibility Treatment of Income: Overview ..................................................................................... 92
Allowances .......................................................................................................................................... 92
Miller Trusts ........................................................................................................................................ 94
General Guidance Concerning Completing Appendix B-5 .................................................................. 95
Detailed Instructions for Completing Appendix B-5 ............................................................................... 96
Item B-5-a: Use of Spousal Impoverishment Rules............................................................................. 96
Item B-5-b-1/ Item B-5-b-2: Regular Post-Eligibility Treatment of Income: §1634 and SSI Criteria
State .................................................................................................................................................... 96
Item B-5-c-1/Item B-5-c-2: Regular Post-Eligibility Treatment of Income: §209(b) State .................. 97
Item B-5-d: Post-Eligibility Treatment of Income Using Spousal Impoverishment Rules................... 98
Item B-5-e: Regular Post-Eligibility Treatment of Income: SSI State - 2014 through 2018 ................ 98
Item B-5-f: Regular Post-Eligibility Treatment of Income: §209(b) State – 2014 through 2018 ........ 99
Item B-5-g: Post-Eligibility Treatment of Income Using Spousal Impoverishment Rules – 2014
through 2019....................................................................................................................................... 99
Post Eligibility Treatment of Income Under Concurrent Waivers..................................................... 100
Appendix B-6: Evaluation/Reevaluation of Level of Care ......................................................................... 102
Overview ............................................................................................................................................... 102
Detailed Instructions for Completing Appendix B-6 ............................................................................. 102
Item B-6-a: Reasonable Indication of Need for Services .................................................................. 102
Item B-6-b: Responsibility for Performing Evaluations and Reevaluations ...................................... 103
Item B-6-c: Qualifications of Individuals Performing Initial Evaluation ............................................ 104
Item B-6-d: Level of Care Criteria...................................................................................................... 104
Item B-6-e: Level of Care Instrument(s)............................................................................................ 105
Item B-6-f: Process for Level of Care Evaluation/ Reevaluation....................................................... 105
Item B-6-g: Re-evaluation Schedule.................................................................................................. 106
Item B-6-h: Qualifications of Individuals Who Perform Re-evaluations........................................... 106
Item B-6-i: Procedures to Ensure Timely Re-Evaluations ................................................................. 107

Item B-6-j: Maintenance of Evaluation/Reevaluation Records ........................................................ 107
Quality Improvement: Level of Care ........................................................................................................ 108
Level of Care (LOC) Determination ................................................................................................... 108
Instructions ....................................................................................................................................... 108
Technical Guidance ........................................................................................................................... 108
Appendix B-7: Freedom of Choice ............................................................................................................ 109
Overview ............................................................................................................................................... 109
Detailed Instructions for Completing Appendix B-7 ............................................................................. 110
Item B-7-a: Procedures ..................................................................................................................... 110
Item B-7-b: Maintenance of Forms................................................................................................... 110
Appendix B-8: Access to Services by Limited English Proficient Persons ................................................. 111
Overview............................................................................................................................................... 111
Detailed Instructions for Completing Appendix B-8 ............................................................................. 111
Instructions ....................................................................................................................................... 111
Technical Guidance ........................................................................................................................... 111
Appendix C: Participant Services .............................................................................................................. 113
Brief Overview...................................................................................................................................... 113
Web-Based Application......................................................................................................................... 113
Appendix C-1: Summary of Services Covered........................................................................................... 113
Overview ............................................................................................................................................... 113
Detailed Instructions for Completing Appendix C-1 ............................................................................. 113
Item C-1-a: Waiver Services Summary.............................................................................................. 113
Item C-1-b. Alternate Provision of Case Management Services to Waiver Participants .................. 116
Item C-1-c: Delivery of Case Management Services ......................................................................... 117
Appendix C-2: General Service Specifications .......................................................................................... 117
Overview ............................................................................................................................................... 117
Detailed Instructions for Completing Appendix C-2 ............................................................................. 117
Item C-2-a: Criminal History/Background Investigations.................................................................. 117
Item C-2-b: Abuse Registry Screening............................................................................................... 118
Item C-2-c: Facilities Subject to §1616(e) of the Social Security Act ................................................ 118
Discussion: Items C-2-d and C-2-e .................................................................................................... 119
Item C-2-d: Provision of Personal Care or Similar Services by Legally Responsible Individuals ....... 119

Item C-2-e: State Policies Concerning Payment for Waiver Services Furnished by Relatives/ Legal
Guardians .......................................................................................................................................... 121
Item C-2-f: Open Enrollment of Providers ........................................................................................ 124
Quality Improvement: Qualified Providers............................................................................................... 125
Qualified Providers............................................................................................................................ 125
Instructions ....................................................................................................................................... 125
Technical Guidance ........................................................................................................................... 126
Appendix C-3: Waiver Services Specifications .......................................................................................... 126
Overview ............................................................................................................................................... 126
Technical Guidance Concerning Service Coverage ............................................................................... 126
Introduction ...................................................................................................................................... 126
Requirements Concerning the Specification of the Scope of Services ............................................. 127
Additional Considerations Concerning Service Coverage ................................................................. 129
C. Relationship of Waiver Services to EPSDT Services ...................................................................... 130
Detailed Instructions for Completing Appendix C-3 ............................................................................. 134
Carry Over Services ........................................................................................................................... 136
Service Definition.............................................................................................................................. 136
Applicable Limits on Amount, Frequency, or Duration..................................................................... 137
Provider Specifications...................................................................................................................... 138
Provider Category(s) ......................................................................................................................... 138
Provision by Legally Responsible Persons or Relatives/Legal Guardians.......................................... 139
Provider Qualifications...................................................................................................................... 139
Verification of Provider Qualifications.............................................................................................. 141
Service Delivery Method................................................................................................................... 141
CMS Review Criteria.............................................................................................................................. 142
Appendix C-4: Additional Limits on Amount of Waiver Services.............................................................. 143
Overview ............................................................................................................................................... 143
Types of Limits ...................................................................................................................................... 143
Applicability........................................................................................................................................... 144
Basic Information Requirements .......................................................................................................... 144
Additional Information Requirements.................................................................................................. 145
Limit(s) on Set(s) of Waiver Services................................................................................................. 145
Prospective Individual Budget Amount ............................................................................................ 145

Budget Limits by Level of Support .................................................................................................... 145
Other Type of Limit ........................................................................................................................... 145
CMS Review Criteria.............................................................................................................................. 146
Appendix C-5: Home and Community-Based Settings Requirements...................................................... 149
Overview ............................................................................................................................................... 149
Instructions ....................................................................................................................................... 149
Technical Guidance ........................................................................................................................... 149
Settings that Isolate .......................................................................................................................... 151
Attachment: Core Service Definitions....................................................................................................... 153
Overview ............................................................................................................................................... 153
A. Statutory Services ............................................................................................................................. 154
1. Case Management ............................................................................................................................ 154
Core Service Definition ..................................................................................................................... 154
2. Homemaker Services ........................................................................................................................ 155
Core Service Definition ..................................................................................................................... 155
3. Home Health Aide Services............................................................................................................... 155
Background ....................................................................................................................................... 155
Core Service Definition ..................................................................................................................... 156
Core Service Definition ..................................................................................................................... 156
4. Personal Care .................................................................................................................................... 157
Background ....................................................................................................................................... 157
Core Service Definition ..................................................................................................................... 157
Core Service Definition ..................................................................................................................... 157
5. Adult Day Health ............................................................................................................................... 159
Core Service Definition ..................................................................................................................... 159
Habilitation Services.......................................................................................................................... 159
6. Habilitation........................................................................................................................................ 159
Core Service Definition ..................................................................................................................... 159
7. Residential Habilitation..................................................................................................................... 160
Core Service Definition ..................................................................................................................... 160
8. Day Habilitation................................................................................................................................. 161
Core Service Definition ..................................................................................................................... 161
9. Education .......................................................................................................................................... 162

Core Service Definition ..................................................................................................................... 162
10. Prevocational Services .................................................................................................................... 163
Core Service Definition ..................................................................................................................... 163
11-a Supported Employment - Individual Supported Employment ..................................................... 165
Core Service Definition ..................................................................................................................... 165
11-b Supported Employment – Small Group Employment Support..................................................... 167
Core Service Definition ..................................................................................................................... 167
12. Respite Care .................................................................................................................................... 169
Core Service Definition ..................................................................................................................... 169
Mental Health Services ..................................................................................................................... 170
13. Day Treatment ................................................................................................................................ 170
Core Service Definition ..................................................................................................................... 170
Core Service Definition ..................................................................................................................... 171
14. Psychosocial Rehabilitation Services .............................................................................................. 171
Core Service Definition ..................................................................................................................... 171
Core Service Definition ..................................................................................................................... 172
15. Clinic Services.................................................................................................................................. 173
Core Service Definition ..................................................................................................................... 173
Core Service Definition ..................................................................................................................... 173
16. Live-in Caregiver.............................................................................................................................. 173
Core Service Definition ..................................................................................................................... 173
B. Other Services................................................................................................................................... 174
1. Home Accessibility Adaptations (a.k.a., environmental accessibility adaptations)...................... 174
2. Vehicle Modifications........................................................................................................................ 174
Core Service Definition ..................................................................................................................... 174
3. Non-Medical Transportation............................................................................................................. 175
Core Service Definition ..................................................................................................................... 175
4. Specialized Medical Equipment and Supplies................................................................................... 176
Core Service Definition ..................................................................................................................... 176
5. Assistive Technology ......................................................................................................................... 177
Core Service Definition ..................................................................................................................... 177
6. Personal Emergency Response System (PERS) ................................................................................. 177
Core Service Definition ..................................................................................................................... 177

7. Community Transition Services ........................................................................................................ 178
Core Service Definition ..................................................................................................................... 178
8. Skilled Nursing................................................................................................................................... 179
Core Service Definition ..................................................................................................................... 179
9. Private Duty Nursing ......................................................................................................................... 179
Core Service Definition ..................................................................................................................... 179
10. Adult Foster Care ............................................................................................................................ 180
Core Service Definition ..................................................................................................................... 180
11. Assisted Living Services................................................................................................................... 181
Core Service Definition ..................................................................................................................... 181
12. Chore Services................................................................................................................................. 182
Core Service Definition ..................................................................................................................... 182
13. Adult Companion Services .............................................................................................................. 182
Core Service Definition ..................................................................................................................... 182
14. Training and Counseling Services for Unpaid Caregivers................................................................ 183
Core Service Definition ..................................................................................................................... 183
15. Consultative Clinical and Therapeutic Services............................................................................... 183
Core Service Definition ..................................................................................................................... 183
16. Individual Directed Goods and Services.......................................................................................... 184
Core Service Definition ..................................................................................................................... 184
17. Bereavement Counseling ................................................................................................................ 185
Core Service Definition ..................................................................................................................... 185
18. Career Planning............................................................................................................................... 185
Core Service Definition ..................................................................................................................... 185
C. Extended State Plan Services............................................................................................................ 186
Discussion.......................................................................................................................................... 186
Core Service Definition ..................................................................................................................... 186
D. Services in Support of Participant Direction..................................................................................... 187
Discussion.......................................................................................................................................... 187
1. Information and Assistance in Support of Participant Direction (Supports Brokerage)............... 187
2. Financial Management Services........................................................................................................ 188
Core Service Definition ..................................................................................................................... 188
Appendix D: Participant-Centered Planning and Service Delivery ........................................................... 190

Brief Overview....................................................................................................................................... 190
Appendix D-1: Service Plan Development ................................................................................................ 190
Background ........................................................................................................................................... 190
Detailed Instructions for Completing Appendix D-1............................................................................. 191
Service Plan Title ............................................................................................................................... 191
Item D-1-a: Responsibility for Service Plan Development ................................................................ 191
Item D-1-b: Service Plan Development Safeguards .......................................................................... 192
Item D-1-c: Supporting the Participant in Service Plan Development.............................................. 193
Item D-1-d. Service Plan Development Process................................................................................ 194
Item D-1-e. Risk Assessment and Mitigation .................................................................................... 195
Item D-1-f: Informed Choice of Providers......................................................................................... 196
Item D-1-g: Process for Making Service Plan Subject to the Approval of the Medicaid Agency ...... 196
Item D-1-h: Service Plan Review and Update ................................................................................... 197
Item D-1-i: Maintenance of Service Plan Forms ............................................................................... 198
Appendix D-2: Service Plan Implementation and Monitoring .................................................................. 199
Background ........................................................................................................................................... 199
Detailed Instructions for Completing Appendix D-2............................................................................. 199
Item D-2-a: Service Plan Implementation and Monitoring............................................................... 199
Item D-2-b: Monitoring Safeguards .................................................................................................. 200
Quality Improvement: Service Plan ..................................................................................................... 201
Appendix E: Participant Direction of Services........................................................................................... 202
Brief Overview....................................................................................................................................... 202
Overview: Participant Direction of Waiver Services ............................................................................. 202
Participant Choice ............................................................................................................................. 203
Geographic Limitation....................................................................................................................... 203
Service Specifications........................................................................................................................ 203
Participant Direction Opportunities.................................................................................................. 203
Supports for Participant Direction .................................................................................................... 204
Detailed Instructions for Completing Appendix E................................................................................. 204
Appendix E: Initial Section ................................................................................................................ 205
Appendix E-1: Overview............................................................................................................................ 205
Overview of Appendix E-1..................................................................................................................... 205
Detailed Instructions for Completing Appendix E-1 ............................................................................. 205

Item E-1-a: Description of Participant Direction............................................................................... 205
Item E-1-b: Participant Direction Opportunities............................................................................... 206
Item E-1-c: Availability of Participant Direction by Type of Living Arrangement ............................. 207
Item E-1-d: Election of Participant-Direction.................................................................................... 208
Item E-1-e: Information Furnished to Participants........................................................................... 209
Item E-1-f: Participant Direction by a Representative ...................................................................... 210
Item E-1-g: Participant Directed Services ......................................................................................... 211
Overview: Financial Management Services ...................................................................................... 211
Purchase of Certain Goods and Services through an FMS Entity ..................................................... 214
Item E-1-h: Financial Management Services..................................................................................... 214
Item E-1-i: Provision of Financial Management Services.................................................................. 215
Information and Assistance in Support of Participant Direction: Overview..................................... 218
Item E-1-j: Information and Assistance in Support of Participant Direction .................................... 218
Item E-1-k: Independent Advocacy................................................................................................... 220
Item E-1-l: Voluntary Termination of Participant Direction.............................................................. 221
Item E-1-m: Involuntary Termination of Participant Direction......................................................... 222
Item E-1-n: Goals for Participant-Direction ...................................................................................... 222
Appendix E-2: Opportunities for Participant Direction............................................................................. 223
Overview of Topics Addressed in Appendix E-2.................................................................................... 223
Detailed Instructions for Completing Appendix E-2 ............................................................................. 223
Item E-2-a: Participant – Employer Authority................................................................................... 223
Item E-2-a-i: Participant Employer Status......................................................................................... 223
Item E-2-a-ii. Participant Decision Making Authority ....................................................................... 224
Item E-2-b: Participant – Budget Authority ...................................................................................... 226
Item E-2-b-i: Participant Decision Making Authority ........................................................................ 226
Item E-2-b-iii. Informing Participant of Budget Amount................................................................... 228
Item E-2-b-iv. Participant Exercise of Budget Flexibility ................................................................... 228
Item E-2-b-v: Expenditure Safeguards .............................................................................................. 229
Appendix F: Participant Rights.................................................................................................................. 232
Brief Overview....................................................................................................................................... 232
Appendix F-1: Opportunity to Request a Fair Hearing.............................................................................. 232
Detailed Instructions for Completing Appendix F-1 ............................................................................. 232
Process for Offering Opportunity to Request a Fair Hearing............................................................ 232

Appendix F-2: Additional Dispute Resolution Process.............................................................................. 234
Overview ............................................................................................................................................... 234
Detailed Instructions for Completing Appendix F-2 ............................................................................. 234
Item F-2-a: Availability of Additional Dispute Resolution Process.................................................... 234
Item F-2-b: Description of Additional Dispute Resolution Process................................................... 235
Appendix F-3: State Grievance/Complaint System................................................................................... 235
Overview ............................................................................................................................................... 235
Detailed Instructions for Completing Appendix F-2 ............................................................................. 236
Item F-3-a: Operation of Grievance/Complaint System ................................................................... 236
Item F-3-b: Operational Responsibility ............................................................................................. 236
Item F-3-c: Description of System..................................................................................................... 236
Appendix G: Participant Safeguards ......................................................................................................... 239
Brief Overview....................................................................................................................................... 239
Appendix G-1: Response to Critical Events or Incidents........................................................................... 239
Overview ............................................................................................................................................... 239
Detailed Instructions for Completing Appendix G-1............................................................................. 239
Item G-1-a: ........................................................................................................................................ 239
Item G-1-b: State Critical Event or Incident Reporting Requirements ............................................. 239
Item G-1-c: Participant Training and Education................................................................................ 240
Item G-1-d: Responsibility for Review of and Response to Critical Events or Incidents................... 241
Item G-1-e. Responsibility for Oversight of Critical Incidents and Events ....................................... 242
Appendix G-2: Safeguards Concerning Restraints and Restrictive Interventions..................................... 243
Overview ............................................................................................................................................... 243
Detailed Instructions for Completion of Appendix G-2 ........................................................................ 243
Item G-2-a: Use of Restraints............................................................................................................ 243
Item G-2-a-i: Safeguards Concerning the Use of Restraints ............................................................. 244
Item G-2-a-ii: State Oversight Responsibility.................................................................................... 245
Item G-2-b: Use of Restrictive Interventions .................................................................................... 246
Item G-2-b-i: Safeguards Concerning the Use of Restrictive Interventions...................................... 247
Item G-2-b-ii: State Oversight Responsibility.................................................................................... 248
Item G-2-c: Use of Seclusion ............................................................................................................. 249
Item G-2-c-i: Safeguards Concerning the Use of Seclusion............................................................... 250
Item G-2-c-ii: State Oversight Responsibility .................................................................................... 251

Appendix G-3: Medication Management and Administration ................................................................. 252
Overview ............................................................................................................................................... 252
Detailed Instructions for Completing Appendix G-3............................................................................. 252
Item G-3-a: Applicability ................................................................................................................... 252
Item G-3-b: Medication Management and Follow-Up ..................................................................... 253
Item G-3-b-i: Responsibility .............................................................................................................. 253
Item G-3-b-ii: State Oversight and Follow-up ................................................................................... 254
Item G-3-c: Medication Administration by Waiver Providers........................................................... 254
Item G-3-c.i: Provider Administration of Medications...................................................................... 254
Item G-3-c.ii: State Policy.................................................................................................................. 254
Item G-3-c.iii: Medication Error Reporting ....................................................................................... 255
Item G-3-c.iv: State Oversight Responsibility ................................................................................... 256
Quality Improvement: Health and Welfare .......................................................................................... 256
Health and Welfare........................................................................................................................... 256
Instructions ....................................................................................................................................... 257
Appendix H: Systems Improvement......................................................................................................... 258
Detailed Instructions for Completing Appendix H ................................................................................ 258
Quality Improvement Strategy ............................................................................................................. 258
General Instructions.......................................................................................................................... 258
Quality Improvement Strategy: Systems Improvement ....................................................................... 259
Detailed Instructions for Completing Appendix H ................................................................................ 260
QIS Processes to Establish Priorities, Develop, and Assess System Improvements ............................ 261
Compilation and Communication of Quality Improvement Information ............................................. 261
Periodic Evaluation and Revision of the QIS......................................................................................... 262
Appendix I: Financial Accountability......................................................................................................... 263
Brief Overview....................................................................................................................................... 263
APPENDIX I-1: Financial Integrity and Accountability............................................................................... 263
Detailed Instructions for Completing Appendix I-1 .............................................................................. 263
Quality Improvement: Financial Accountability .................................................................................. 265
APPENDIX I-2: Rates, Billing and Claims.................................................................................................... 266
Overview ............................................................................................................................................... 266
Detailed Instructions for Completing Appendix I-2 .............................................................................. 266
Item I-2-a: Rate Determination Methods ......................................................................................... 266

Item I-2-b: Flow of Billings ................................................................................................................ 269
Item I-2-c: Certifying Public Expenditures......................................................................................... 270
Item I-2-d: Billing Validation Process ................................................................................................ 271
Item I-2-e: Billing and Claims Record Maintenance Requirement.................................................... 272
APPENDIX I-3: Payment ............................................................................................................................ 272
Overview ............................................................................................................................................... 272
Detailed Instructions for Completing Appendix I-3 .............................................................................. 272
Item I-3-a: Method of Payment -- MMIS .......................................................................................... 272
Item I-3-b: Direct Payment................................................................................................................ 273
Item I-3-c: Supplemental or Enhanced Payments............................................................................. 274
Item I-3-d: Payments to State or Local Government Providers........................................................ 275
Item I-3-e: Amount of Payment to State or Local Government Providers ....................................... 275
Instructions ....................................................................................................................................... 275
Technical Guidance ........................................................................................................................... 275
Item I-3-f: Provider Retention of Payments...................................................................................... 276
Item I-3-g: Additional Payment Arrangements................................................................................. 277
Item I-3-g-i: Voluntary Reassignment of Payments to a Governmental Agency .............................. 277
Technical Guidance ........................................................................................................................... 277
Item I-3-g-ii: Organized Health Care Delivery System....................................................................... 277
Item I-3-g-iii: Contracts with MCOs, PIHPs or PAHPs........................................................................ 279
APPENDIX I-4: Non-Federal Matching Funds ............................................................................................ 280
Overview ............................................................................................................................................... 280
Detailed Instructions for Completing Appendix I-4 .............................................................................. 281
Item I-4-a: State Government Level Source(s) of the Non-Federal Share of Computable Waiver Costs
.......................................................................................................................................................... 281
Item I-4-b: Local Government or Other Source(s) of the Non-Federal Share of Computable Waiver
Costs.................................................................................................................................................. 281
Item I-4-c: Information Concerning Certain Sources of Funds ......................................................... 282
APPENDIX I-5: Exclusion of Medicaid Payment for Room and Board....................................................... 283
Overview ............................................................................................................................................... 283
Detailed Instructions for Completing Appendix I-5 .............................................................................. 283
Item I-5-a: Services Furnished in Residential Settings ...................................................................... 283
Item I-5-b: Method for Excluding the Cost of Room and Board Furnished in Residential Settings.. 283
APPENDIX I-6: Payment for Rent and Food Expenses of an Unrelated Live-In Caregiver ........................ 284

Overview ............................................................................................................................................... 284
Completion of Appendix I-6 .................................................................................................................. 284
APPENDIX I-7: Participant Co-Payments for Waiver Services and Other Cost Sharing ............................ 285
Overview ............................................................................................................................................... 285
Detailed Instructions for Completing Appendix I-7 .............................................................................. 286
Item I-7-a: State Requirement for Co-pays....................................................................................... 286
Item I-7-a-i: Co-Pay Arrangement..................................................................................................... 286
Item I-7-a-ii: Participants Subject to Co-pay Charges for Waiver Services ....................................... 286
Item I-7-a-iii: Amount of Co-Pay Charges for Waiver Services ........................................................ 286
Item I-7-a-iv: Cumulative Maximum Charges .................................................................................. 287
Item I-7-b: Other State Requirement for Cost Sharing ..................................................................... 287
Appendix J: Cost Neutrality Demonstration ............................................................................................. 289
Brief Summary ...................................................................................................................................... 289
Cost Neutrality Formula........................................................................................................................ 289
Appendix J-1: Composite Overview and Demonstration of Cost-Neutrality Formula.............................. 290
Overview ............................................................................................................................................... 290
Detailed Instructions for Completion of Appendix J-1.......................................................................... 290
Appendix J-2 - Derivation of Estimates..................................................................................................... 292
Overview ............................................................................................................................................... 292
Detailed Instructions for Completing Appendix J-2 .............................................................................. 292
Item J-2-a: Number of Unduplicated Participants Served ................................................................ 292
Item J-2-b: Average Length of Stay ................................................................................................... 292
Item J-2-c: Derivation of Estimates of Each Factor ........................................................................... 293
Item J-2-c-i: Factor D Derivation ....................................................................................................... 294
Item J-2-c-iii: Factor G Derivation ..................................................................................................... 296
Item J-2-c-iv: Factor G' Derivation .................................................................................................... 297
Item J-2-d: Estimate of Factor D ....................................................................................................... 298
J-2-d-i: Non-Concurrent Waivers ...................................................................................................... 298
J-2-d-ii: Concurrent Waivers ............................................................................................................. 299
Glossary of Terms and Abbreviations ....................................................................................................... 302
Index to the Application and Instructions................................................................................................. 334

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Introduction
Purpose
These instructions provide information to assist states in completing the Version 3.6 Application
for a §1915(c) Home and Community-Based Services (HCBS) Waiver, released January 2019.
Changes implemented in 2019 are clarifying improvements to the updated Version 3.5 application
released by the Centers for Medicare & Medicaid Services (CMS) in January 2015. These
instructions have been updated to reflect the changes in the application and to provide additional
clarification to states based on experience in using the waiver application.
The instructions include technical guidance to aid states in designing a HCBS waiver. This
guidance is intended to improve understanding of applicable federal policies and their implications
for the design and operation of a HCBS waiver. Finally, the instructions incorporate the review
criteria that 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 §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.

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CMS recognizes that the design and operational features of a 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 3.6 HCBS Waiver Application

The Version 3.6 HCBS Waiver Application is available for state use upon release. The Version
3.1 - 3.6 HCBS Waiver Applications have extensively revised the predecessor 1995 standard
waiver application format. 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
a HCBS waiver. See Version 3.6 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. Conversion to a web-based application
streamlines the preparation of waiver applications and amendments as well as improves 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 §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 a 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 3.6 §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;

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•

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: §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 compiles
selected federal Medicaid regulations that pertain to the operation of HCBS waivers; and,
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.
Attachment D: Sampling Guide

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Description of the §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

§1915(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 §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 §4743 of P.L. 105-33 (Balanced Budget Act of
1997 – BBA-97). Attachment B to these instructions contains the full text of §1915(c) of the Act,
as amended.
Prior to the enactment of §1915(c), 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. §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 will 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 §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 §1915(i) authority provides an
additional avenue for states to support individuals in the community. A state may employ both the
§1915(c) and §1915(i) authorities to fashion a comprehensive approach to the delivery of home
and community-based services. The enactment of the §1915(i) authority did not alter the 1915(c)
waiver authority. CMS will issue separate guidance concerning the §1915(i) authority.

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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 a HCBS waiver, a state must submit an initial waiver application to CMS. 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. In
2014, states operated an average of 6.6 waivers. Arizona, Rhode Island, and Vermont were the
only states that did not operate a §1915(c) HCBS waiver.
Waivers Granted
§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 a HCBS waiver:
•

•

•

§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;
§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,
§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

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“eligibility” rules for medically needy in the community who otherwise qualify for waiver
services.
§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 a HCBS waiver concurrently with another authority such as a §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. 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. The state may include the
services that are specifically enumerated in §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.

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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. 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 service plan
(a.k.a., “plan of care”). 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. 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.

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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 addition, a state may provide
that local or regional non-state organizations (e.g., county human services agencies) or contracted
entities perform specified 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
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. 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. Some states have found the former Quality Framework useful as an expansive construct
that addresses HCBS Waiver quality beyond the assurance elements.
Finally, CMS recognizes that quality improvement is dynamic, and the QIS may, and probably
will, 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
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modifications in the IPG process. This guidance is found at http://www.medicaid.gov/MedicaidCHIP-Program-Information/By-Topics/Waivers/Downloads/3-CMCS-quality-memonarrative.pdf.

Waiver Assurances and Other Federal Requirements
The waiver assurances (and their component elements) that must be included in the QIS follow.
Also included in parentheses are references to the specific parts of the application that pertain to
the respective assurance.
1. 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.
2. 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 processes and instruments described in the approved waiver are applied appropriately
and according to the approved description to determine participant LOC.
3. 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.
4. 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 or when warranted by changes in the
waiver participant’s needs.
• Services are delivered in accordance with the service plan, including in the type, scope,
amount, duration, and frequency specified in the service plan.
• Participants are afforded choice between/among waiver services and providers.
5. 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.

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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)
•

6.

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 subassurance, 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 subassurance 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

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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, information about each waiver service must include
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 must 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 must 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

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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
The Quality Improvement Strategy must describe roles and responsibilities of the parties
involved in 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.
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.
Examples: 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.

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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 the state must 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 Disabled and Elderly Health Programs Group
(DEHPG) within 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). DEHPG is
a unit within the CMCS Central Office (CO) in Baltimore, Maryland. Within DEHPG, the
Division of Long-Term Services and Supports (DLTSS) has lead responsibility for HCBS waiver
program administration. DLTSS is responsible for developing policies concerning the HCBS
waiver authority, furnishing or arranging for technical assistance to states in the design and
operation of waivers, and reviewing and approving waiver applications and amendments in
collaboration with CMS Regional Offices (RO).
CMS has ten Regional Offices located around the country. The CMS RO is the first point-ofcontact for the states in its region concerning the HCBS waiver program. The RO also is tasked
with oversight of the waivers in its region and engaging in ongoing dialogue with the state
concerning waiver operations and performance. The CO and RO share responsibilities for
reviewing waiver applications and requests for amendments and providing technical assistance to
states concerning the design and operation of waivers.

Strengthening HCBS Waiver Quality Assurance/Quality Improvement
In February 2007, CMS issued the Revised Interim Procedural Guidance to its Regional Offices.
The Interim Procedural Guidance is a precursor to a permanent mechanism for states to provide
waiver quality improvement information to CMS. While the waiver application serves as the
State’s plan for ongoing compliance with the assurances, the Interim Procedural Guidance is the
actual implementation of the plan as approved in the State’s application, The Interim Procedural
Guidance stresses that CMS oversight of HCBS waivers is based principally on the review of
evidence that waiver assurances have been met. Because CMS does not conduct look-behind
surveys, the State’s role in producing reliable evidence of compliance is paramount in the review
process. Thus, the IPG guidance sets out the expectations of States in reporting collected
information described in the waiver design, that is, the QI strategy found in the waiver application.
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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 is guidance 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 interpreting the integration
regulations of those statutes. Approval of any Medicaid Waiver action does not in any way 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 1915(c) waivers located at https://wmsmmdl.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
with
links
to
other
pertinent
information
is
located
at
https://www.medicaid.gov/medicaid/hcbs/guidance/index.html.

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Version 3.6 HCBS Waiver Application
Organization
The Version 3.6 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 §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 3.6 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 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?”
•

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•

•

•

•

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. This Appendix addresses the question: “What
safeguards has the state established to protect participants from harm?” In this Appendix, a
state describes how it provides for specific safeguards related to assuring participant health
and welfare (e.g., response to critical incidents).
Appendix H: Systems Improvement. Here, a state describes the mechanisms it will use to
engage in systems improvement activities based upon the information it gathers from the
discovery and remediation strategies described throughout the application.

•

Appendix I: Financial Accountability. In this Appendix, a state specifies how it makes
payments for waiver services, ensures the integrity of these payments and complies with
applicable requirements concerning payments and federal financial participation. The
Appendix is designed to answer the question: “How does the state maintain financial
accountability in the waiver?”

•

Appendix J: Cost Neutrality Demonstration. In this Appendix, the State furnishes
necessary information to demonstrate the cost neutrality of the waiver. This Appendix is
designed to answer the question: “Does the waiver meet statutory cost-neutrality
requirements?”

Ongoing CMS Waiver Application Activities

CMS is engaged in several ongoing activities related to the waiver application/review processes
and continuing improvement of federal oversight and monitoring of HCBS waivers.
Implementation of the Web-Based Application
With the Version 3.4 application, CMS implemented a web based HCBS waiver application
format. Ongoing improvements to the web-based format have further streamlined the application
process by eliminating paper copies, enabling states to enter, save, and submit the HCBS waiver
application via the Internet, and supports internal CMS processing and review of applications,
renewal requests and amendments. The web-based tool stores all waivers and amendments
chronologically so that CMS and the state may at any time view the currently approved waiver, or
previously approved versions.
Additional Activities
CMS undertakes the following additional activities:

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•
•
•

Ongoing Dialogue with State Associations. CMS is continuing its dialogue with the state
associations concerning the HCBS waiver program. This dialogue has proven to be
invaluable in continually improving the operation of the program.
Continuous Solicitation of State User Feedback. CMS continuously invites feedback from
states that employ the Version 3.6 HCBS Waiver Application about ease of use and the need
for additional clarification.
Periodic Revisions to the Application and Instructions. Periodically, CMS will revise and
update both the waiver application and these instructions. These revisions will incorporate
interim technical clarifications that are issued between revisions. Revisions also may be
necessary to reflect new policy developments

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Waiver Application Submission
Requirements, Processes and Procedures
Overview

This section addresses the following topics:
• Use of the Version 3.6 HCBS Waiver Application;
• Policies concerning the submission of new and renewal waiver applications;
• Policies concerning the submission and CMS review of waiver amendments; and,
• Related topics

Submission of Applications

A state must submit a new or renewal waiver application using the Version 3.6 application by
employing the web-based application.
Making a Submission Using the Web-Based Application
There are several benefits in employing the web-based application to prepare and submit new and
renewal applications. These benefits include:
•

•

•

•

The web-based application automatically links interrelated parts of the application. Where
appropriate, information that is entered in one part of the application is automatically
entered in other parts of the application that use the same information. For example, the
information about waiver services that is entered in Appendix C is used to populate the
Factor D tables in Appendix J. This feature ensures internal consistency within the
application. In addition, the web-based application turns off parts of the application that
do not apply to a request.
The web-based application employs validation checks to ensure that selections made in
one part of the application are consistent with selections made in other parts. For example,
the selection of Medicaid eligibility groups in Appendix B-4 is tightly linked to the
selections concerning post-eligibility treatment of income in Appendix B-5. These
validation checks ensure that the application has been completed appropriately and
expedite CMS review. In addition, the web-based application prevents the submission of
incomplete applications.
The web-based application also supports internal CMS processing of applications. Both
the CO and ROs are notified electronically when an application is submitted and there is
tracking of where the application stands in the review/approval process. This enables more
efficient and timely review of applications.
Once an application that has been submitted via the web is approved, it will be easier for
states to submit amendments by making changes to the application on the web. Moreover,
both CMS and states will have continuous access to the most up-to-date version of the
approved waiver.

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Use of the web-based application facilitates both state preparation and CMS review of
applications. Separate technical instructions have been issued for using the web-based application.
When the web-based application is used, a new waiver, renewal or amendment is considered
submitted when the State Medicaid Director (or designee) submits the application using the
submission feature, which is reserved for use only by the Medicaid Director. Submission of the
application by the State Medicaid Director is equivalent to signature of the application by the State
Medicaid Director. When the application is submitted via the web, the date on which the State
Medicaid Director submits the application is considered to be the official submission date for the
purpose of starting the 90-day “clock” for CMS review and disposition of the request (see below
for further discussion of the 90-day clock). The application is not submitted separately in printed
hard copy form when the web-based application is used.
Making Changes to a Submitted Application
Once a waiver application or amendment has been submitted, it may be necessary to make changes.
For example, CMS review of a waiver application or amendment may result in CMS suggesting
that the state modify the application or amendment. If the state concurs, the state must make the
change to the application or amendment and resubmit the affected portions of the application to
CMS. Under no circumstances can CMS personnel modify a waiver application or amendment
request.
Once an application is submitted via the web, the application is “locked” and cannot be modified
unless unlocked by CMS. Locking the application preserves the integrity of the original
submission. If it is necessary to modify the application, CMS will unlock the application so that
the state may make changes. Once the state has made the changes and resubmitted the application
to CMS, the application will be locked again.

Joint Central Office/Regional Office Waiver Review Process

All waiver applications, renewals, and specific amendments are reviewed jointly by
CMCS/DEHPG/DLTSS and the appropriate RO. The CO waiver analyst and RO staff work
together to review the application to ensure that it is complete and to assess the waiver’s design by
applying the CMS review criteria. As necessary, other CMS personnel participate in the review
process. The joint CO/RO waiver review process is designed to identify and resolve as
expeditiously as possible problems or issues that may surface. CMS strives to ensure that relevant
federal policies are applied consistently across all types of waiver requests and CMS regions. CMS
also seeks to work collaboratively with states to resolve issues. In addition, as part of the waiver
application redesign, CMS has developed “Instrument for Reviewing State 1915 (c) HCBS Waiver
Applications” has been developed to assist CMS CO/RO waiver analysts in their review of waiver
applications and to build consistency into the application review process. This tool is available on
the CMS website.
Requesting Division Review
From time to time, issues may arise where the state believes that the resolution of an issue proposed
by the RO/CO review team is problematic. When this situation arises, the state may request that
the issue be referred to the DLTSS Director at CMCS/DEHPG for further review. The state should

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delineate why it regards the proposed resolution to be problematic and the state’s preferred
resolution of the issue. The DLTSS Director will examine the issue and, as necessary, consult with
the state and the RO/CO review team to resolve the issue. The Director will transmit the proposed
disposition of the issue to the state and the RO/CO review team.

Policies Concerning New and Renewal Waiver Applications

This section provides information about the policies that apply to the submission of and CMS
action on new and renewal waiver applications.
90-Day Clock
In accordance with 42 CFR §430.25(f)(3), CMS has no more than 90 calendar days within which
to approve or deny an initial waiver application, a waiver renewal or an amendment request or
alternatively issue a written request for additional information (RAI). The 90-day period within
which CMS must act on a waiver request is known as the “90-day clock.” The 90-day clock starts
on the day that CMS receives the request. It is extremely important to keep the 90-day clock in
mind when preparing new or renewal waiver applications or amendment requests. In particular:
•

•

In the case of an initial or new waiver application, the application must be submitted
at least 90 calendar days in advance of the proposed waiver effective date. If a request
to launch a new waiver is received fewer than 90-days in advance of the proposed effective
date, CMS may not be able to complete its review in time to permit the waiver to be
implemented when desired by the state. States should consider submitting new waiver
applications six-months in advance of the proposed effective date. Submitting a new
application well in advance of the proposed effective date increases the likelihood that the
waiver can be approved on or before the desired effective date, and takes into account the
possibility of an RAI. It is important to keep in mind that a new waiver may only be
approved with a prospective effective date. New waivers may not take effect retroactively.
In the case of a waiver renewal application, the application also must be submitted at
least 90 calendar days in advance of the approved waiver’s expiration date. If a waiver
renewal request is received fewer than 90-days in advance of the expiration date, CMS may
not be able to complete its review by the waiver’s expiration date. As with new waiver
requests, the state should consider submitting a renewal application six months in advance
of the waiver’s expiration date so that there is time to resolve any questions that might arise
during the CMS review of the renewal request.

As a general matter, CMS attempts to resolve problems with a waiver application through informal
dialogue with the state. Informal requests for additional information (which might be made by
telephone or e-mail) do not stop the 90-day clock. CMS attempts to identify any serious problems
in an application within 45-days of its receipt.
If significant problems are identified in the waiver application, the state may take the application
“off-the-clock” by notifying CMS that its submission is incomplete. Once the state has addressed
the problems, it may resubmit the application, whereupon a new 90-day clock will start. The state
also has the option to formally withdraw a request. This option should be considered when the
state determines that it is no longer interested in pursuing the request as submitted.
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In the case of either a new waiver application or a renewal request, CMS may issue a formal,
written “Request for Additional Information” (RAI) in the event that CMS identifies issues or
problems in the application that are sufficiently serious that CMS may have to disapprove the
application unless the problems are resolved satisfactorily.
Only a single RAI will be issued during the waiver review period. When an RAI is issued, the 90day clock is stopped. The clock remains stopped until the state submits its response to the RAI.
Once the response is received, a new 90-day clock starts. In the case of a new waiver application,
the issuance of an RAI may make it difficult to complete the review of the application by the state’s
desired effective date, depending on how far in advance of the proposed effective date the
application was submitted and how quickly and satisfactorily the state responds to the RAI. In the
case of a renewal application, the issuance of an RAI may pose significant difficulties for
completing the review of the renewal application in advance of the expiration date, especially if
the application was submitted only 90-days in advance of the expiration date.
The state may wish to stop the clock by notifying CMS that its submission is incomplete if CMS
determines that the state’s response to an RAI does not satisfactorily resolve the problems in the
application. Stopping the clock on an application avoids CMS having to disapprove the
application. CMS does not have the authority to suspend its consideration of a waiver request
absent a state request to stop the clock.
CMS makes every effort to complete its review of a waiver application on a timely basis and avoid
stopping the clock so that new waivers can be implemented when planned by the state and renewals
are approved in advance of the waiver’s expiration date. Meeting this objective is aided when the
state responds promptly to CMS requests to clarify the application. When CMS approves a new
waiver, waiver renewal or amendment, it will formally notify the state in writing.
New Waiver Applications
When a state wants to launch a new waiver, it submits an initial waiver application. Under the
Act, CMS may approve a new waiver program for a period of three-years or, if the waiver serves
individuals who are dually eligible for Medicare and Medicaid, five years at the state’s option.
The new waiver year period starts on the effective date of the waiver. A new waiver may not go
into effect until the effective date proposed by the state or the date that CMS approves the waiver,
whichever is later. Again, the state must propose a prospective effective date. A new waiver is
never approved retroactively. As noted above, an application for a new waiver must provide for
an effective date at least 90-days after the date of submission. If CMS does not approve the waiver
request until after the effective date proposed by the state, CMS will ask the state whether it wishes
the effective date to be the date that CMS approved the waiver or another date (e.g., the first of the
following month to facilitate waiver reporting).
When a new waiver is approved but the state experiences a delay in implementing the waiver on
the approved effective date, the state may submit an amendment to move forward the initial
effective date (as long as no waiver services have been provided or claimed), in order to start the
three or five year waiver period on the date that the state actually implements the waiver.

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Special Considerations: §1915(c) Waivers that Operate with Concurrent Managed Care
A state may apply for a §1915(c) waiver to operate with a concurrent Medicaid managed care
authority. Concurrent waivers can be used by a state to combine the delivery of HCBS waiver
services with the provision of other state plan services through a managed-care service delivery
system. The managed care authority permits a state to waive provisions of the Act beyond the
waivers that may be requested under the §1915(c) waiver authority. For example, a state may
request a waiver of §1902(a)(23) of the Act, the free choice of providers requirement, under
authority of §1915(b)(4) in order to selectively contract with entities that furnish waiver and
specified state plan services through a managed care arrangement.
In order to operate managed care/§1915(c) concurrent waivers, a state must complete and submit
separate managed care and §1915(c) waiver applications (or amendments). Each application has
different requirements because each waiver authority is governed by distinct provisions of the Act
and is subject to different federal regulations. Where appropriate, the Version 3.6 HCBS Waiver
Application takes into account the limited number of areas where requirements and features of
Medicaid managed care authorities and §1915(c) waivers intersect.
When a state applies to operate managed care/§1915(c) concurrent waivers, CMS must review
each application or amendment to ensure that it meets the relevant statutory and regulatory
requirements that attach to the waiver authority under which they will operate. Both applications
are subject to a 90-day clock. CMS internally coordinates the review of both applications.
Since the approval of managed care/§1915(c) concurrent waivers hinge on the approval of both
applications, CMS may not approve the §1915(c) application until the managed care authority has
been determined to be approvable and/or vice versa. Because significant problems might surface
in the review of either application, it is especially important that a state submit a request to operate
managed care/§1915(c) concurrent waivers at least six months in advance of the proposed waiver
effective date. The two applications may need to be submitted simultaneously so that they can
move forward under the same 90-day clock and be effective on the same date.
Special Considerations: §1915(a) Authority Concurrently with a 1915(c) Waiver
A state may operate a §1915(c) waiver in conjunction with §1915(a) authority, which permits a
state to waive statewideness, comparability, or free choice of provider under certain circumstances.
Typically, states have used §1915(a) authority to provide for voluntary managed care for all or
some HCBS waiver participants. As the effect on a HCBS waiver varies with the authority sought
under §1915(a), and since combination §1915(a)/(c) waivers are not common, these instructions
do not discuss options available under §1915(a) throughout. See the Appendix I instructions for a
discussion of the §1915(a) authority regarding managed care contracts. Contact CMS to discuss a
HCBS application that will include §1915(a) authority.
New Waiver to Replace an Approved Waiver
There are circumstances when a state may or must submit a new waiver application to replace an
approved waiver:
• State Election. A state may decide to submit a new waiver rather than renew an approved
waiver because the state wants to redesign the waiver. The submission of a replacement
waiver may be advantageous when the revisions that the state wants to make are substantial
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•

and affect many elements of the waiver. When a state decides to replace an existing waiver,
the proposed effective date of the new waiver must coincide with the expiration or
termination date of the approved waiver (e.g., if the approved waiver expires on June 30,
the new waiver should be made effective on July 1 to ensure continuity of participant
services). The submission of a new application to replace an existing waiver does not affect
the expiration date of the approved waiver. Also, in this circumstance, a state is required
to prepare a transition plan to describe how the transition between the existing and the new
waiver will be accomplished (see the detailed instructions for the Application (Module 1)
for a discussion of what to include in the transition plan).
CMS Requires the Submission of a New Application. When CMS determines that there
are serious problems in the operation of an approved waiver, CMS may require that the
state replace the approved waiver with a new waiver. This circumstance may arise when
the CMS review of waiver operations reveals substantial problems in assuring waiver
participant health and welfare or when other serious operational deficiencies are identified.
In the application for the replacement waiver, the state is expected to propose a waiver
redesign that effectively addresses the shortcomings that CMS has identified. In addition,
CMS may require the state to periodically report its progress in implementing corrective
actions to correct waiver operational deficiencies.

Except in the foregoing circumstances, CMS will not generally require that a state submit a new
waiver to replace an approved waiver even when significant changes are proposed to the approved
waiver either via waiver amendment or in a renewal application. However, if major changes are
proposed that might adversely affect current participants (e.g., by altering a waiver’s target
population or eliminating services that are provided in the approved waiver), CMS may require
the state to provide additional justification and/or submit a transition plan that describes the steps
that the state will take to address the impact of the changes on current waiver participants. Again,
see the instructions for the Application (Module 1) for a more detailed discussion of transition
plans.
Renewal Applications
Waivers that have not been formally renewed by the end of the waiver period automatically
expire. The Act does not provide for the automatic extension of an approved waiver. In order to
ensure the continuous operation of a waiver, a waiver renewal application should be submitted to
CMS at least 90 but preferably 180 calendar days prior to the end of the waiver period.
There are two conditions that must be met in order for CMS to consider a waiver renewal
application. These are:
• The state must have submitted, and CMS accepted the required HCBS annual waiver
financial and statistical reports (the CMS-372(S) through the end of the next-to-last waiver
year. The annual waiver report(s) must demonstrate that the waiver has been cost-neutral
and must also provide information on the quality of services. Cost neutrality and assuring
health and welfare are fundamental statutory and regulatory requirements. Failure to
prepare and submit acceptable and timely annual waiver reports can jeopardize
continuation of the waiver and/or delay the renewal of the waiver.
• In order to consider a renewal application, CMS must determine that the waiver has been
operated in accordance with the approved waiver, all applicable federal requirements, and
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the waiver assurances. About one year prior to the waiver expiration date, the RO will
issue a report to the state summarizing its findings and conclusions concerning the
operation of the waiver. The report may include recommendations concerning the
operation of the waiver. If the RO identifies serious problems in the operation of the
approved waiver, the state must propose remedial steps that are satisfactory to CMS to
correct the problems. CMS must be confident that the measures that the state has
undertaken or plans to implement will effectively address the problems before CMS can
approve the waiver renewal request. It is important to note that CMS is revamping its
waiver oversight methods to provide for annual reporting by states concerning performance
in meeting the waiver assurances and expects that there will be increased dialogue between
the state and the RO throughout the waiver period about performance. The RO report on
state waiver operations in advance of renewal will rely principally on evidence submitted
by the state, the annual waiver report that the state submits each year to CMS, and the
information obtained through the on-going dialogue between CMS and the state.
If within 90 days of receipt of the renewal request, CMS is unable to conclude that the waiver
application satisfactorily addresses each assurance, including problems that may have surfaced
during the RO review of the approved waiver and/or that the waiver is not cost neutral, CMS may
either formally request additional information or disapprove the renewal request.
Other Changes to Approved Waivers
There are other types of changes to approved waivers that merit additional discussion. In
particular:
•

•

Splitting a Waiver. A state may decide that it would be appropriate to divide an approved
waiver into two waivers. For example, when a single waiver serves both older persons and
individuals with disabilities under the age of 65, the state may determine that dividing the
waiver into two waivers may better meet the needs of each target group. When the state
proposes to make this change at the time of waiver renewal, the waiver requests will be treated
as renewals rather than as new waiver applications. That is, each waiver can be made effective
for another five-year period. When the split is accompanied by significant changes in the
services that will be provided to one or both of the target groups or other changes that might
substantially affect waiver operations, the state may be required to submit a transition plan
and/or additional information.
When the state wants to create two distinct waiver programs to serve the approved waiver’s
target population (for example, by dividing a waiver for persons with developmental
disabilities into separate waivers based on participant living arrangement), the state should
revise the approved waiver to encompass one of the desired configurations and submit a new
waiver application to implement the other configuration.
Splitting an approved waiver prior to its expiration date cannot be accomplished by the
submission of a waiver amendment. Instead, a state should discuss with CMS the intended
target populations to determine whether two new waivers will be required, or whether an
amendment to the existing waiver and one new waiver will be sufficient.
Combining Waivers. Alternatively, a state may determine that it would be more efficient to
combine two approved waivers that serve the same or very similar target populations. If both

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•

•

waivers expire on the same date, the combination of the two programs may be accomplished
by submitting a renewal application for the waiver that would continue and allowing the other
program to expire. The state should alert CMS when it plans to follow this course. In addition,
when the two waivers cover different services, CMS may require the state to prepare and
submit a transition plan if the effect of combining the waivers would be to reduce the services
provided in one or both waivers.
If the waivers have different expiration dates, the state should notify CMS that it intends to
combine the two programs and seek instructions.
Converting a Model Waiver to a Regular Waiver. A waiver that has been approved as a
“model waiver” may be converted to a regular waiver when the state decides to serve more
than 200 individuals at any point in time. The conversion of a model waiver to a regular waiver
is not considered a request for a new waiver. The conversion may be accomplished at the time
of waiver renewal or by the submission of a waiver amendment.
Participant Limit Reductions. When the state submits a request to replace an existing
waiver, renew an approved waiver or amend an approved waiver that would reduce the number
of unduplicated individuals who may be served in the waiver, it must inform CMS whether the
reduced participant cap would have an adverse impact on current waiver participants, as
provided in CMS Olmstead Letter #4 (included in Attachment D). When a request reduces the
participant limit, the state may:
 Provide an assurance that, if the waiver request is approved, there will be sufficient
service capacity to serve at least the number of current participants enrolled in the
waiver as of the effective date of the new waiver, renewal or amendment. That is, the
lower participant limit has the effect of eliminating unassigned “slots.”
 Assure CMS that no current waiver participants will be removed from the program or
institutionalized inappropriately due to the lower participant limit. For example, the
State may achieve a reduction through attrition rather than terminating current waiver
participants.
 Provide an assurance and methodology demonstrating how individuals currently served
by the waiver will not be adversely affected by the lower participant limit. For
example, if the waiver is no longer required because the principal service(s) provided
through the waiver have been added to the state plan, the state may specify a method
to transition waiver participants to the state plan service. Individuals subject to removal
from a waiver are entitled to the opportunity to request a Fair Hearing under Medicaid
law.
 Provide a plan whereby affected individuals will transition to other HCBS waivers
without loss of Medicaid eligibility or loss of services. Any loss of services would be
subject to notice of Medicaid fair hearing rights.
 Provide for other means to assure the health and welfare of affected individuals,
including arranging for services that may be available under the state plan or through
other programs.

Extensions
Regulation Authority: 42 CFR 441.304(a)(2)(c)

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CMS will consider requests for temporary 90-day waiver extensions only in very limited
circumstances. A temporary extension permits the state to continue to operate an approved waiver
beyond its original expiration date. Extensions are not granted solely for administrative
convenience (e.g., to give the state extra time to prepare a waiver renewal request). Extensions
may be granted for various reasons:
•
•
•
•

•

The state wants to align the period of the waiver to a state fiscal year;
The state intends to combine the waiver with another waiver that is under review but has
not been approved by CMS;
The state plans to terminate a waiver and requires additional time to phase out the waiver
in an orderly fashion;
CMS has identified through its review of the waiver renewal application that there are
substantial problems in the waiver’s design that cannot be rectified by the state prior to the
expiration of the waiver; or,
The state requires additional time to satisfactorily resolve quality or financial issues
identified by CMS during RO waiver review.

A state must formally submit a request for an extension in writing to CMS in advance of the
approved waiver’s expiration date. Extension requests are reviewed by CMCS/DEHPG, which
makes the determination whether to approve the request. Extensions are considered on a case-bycase basis. When a request for extension arises out of the need to address significant waiver design
problems identified by CMS during its review of the waiver renewal application or rectify quality
or financial issues previously identified by the RO, CMS will not approve the temporary extension
request unless and until the state submits a satisfactory action plan with specific milestones to
resolve the problems. CMS also will require the state to report its progress in implementing the
action plan during the extension period. Temporary extensions are only granted for a period of up
to 90-days.
All or part of the temporary extension approved by CMS may be subsumed into the period of the
waiver renewal. For example, if the waiver was due to expire June 30 but a 90-day temporary
extension was approved through September 30, the state may request that the renewal be effective
on July 1 or October 1. Please note that a state may not amend a waiver that is on a temporary
extension and the state is required to implement the waiver as last approved.

Policies Concerning Waiver Amendments

Amendments to an approved waiver may be submitted at any time. As is the case with new or
renewal waiver applications, CMS has 90 calendar days within which to approve or disapprove
the amendment or formally request additional information in order to address problems that have
been identified in the amendment request. When an RAI is issued concerning an amendment, the
clock is stopped and only restarted (with a full 90-day clock) once the state responds to the RAI.
Whenever there is a change that affects an element of the approved waiver, the state must submit
an amendment to the waiver. The approved waiver must be kept in synchronization with state
waiver policies, practices, procedures and operations. For example, if a state wants to alter a limit
that it has imposed on the amount, frequency or duration of a waiver service, an amendment must
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be submitted. The revised waiver application is designed to minimize to the extent possible the
need to submit amendments. For example, the revised application does not require states to submit
(and thereby make part of the application) various waiver forms. Hence, states no longer will have
to submit a “technical” amendment when, for example, the service plan form is modified.
States also are alerted that CMS no longer provides for the practice of a state’s notifying CMS by
letter that it is making budget-driven changes to the waiver participant cap. All changes in the
approved waiver must be made via the submission of a waiver amendment. For example, if a state
finds it necessary to reduce the waiver participant cap because state appropriations will not support
the number of persons specified in the waiver, the state must submit an amendment to reduce the
participant cap specified in Appendix B-3 of the application.
A state may propose that an amendment take effect prospectively on some future date. An
amendment also may be made retroactive to the first day of a waiver year (or another date after
the first day of the waiver year) in which the amendment is submitted unless the amendment
includes changes that are substantive. Per 42 CFR 441.304(d)(2), waiver amendments that include
changes that are substantive may take effect only on or after the date of CMS approval. Per 42
CFR 441.304(d)(1)Substantive changes include but are not limited to: Revisions to services
available under the waiver including elimination or reduction of services or reduction in the scope,
amount, and duration of any service; A change in the qualifications of service providers (this
includes a reduction of providers); Changes in rate methodology, or a constriction in the eligible
population (for example, a reduction in the number of persons served, slots available, or adding
reserved capacity without also increasing number of persons served/slots). Some additional
examples of substantive changes include consolidating waivers, adding services, changes to
settings, and changes in the quality improvement system such as adding or deleting subassurances or adding or deleting reporting requirements. Please note that typically, in increase in
the unduplicated number of participants is not considered to be a substantive change. A retroactive
effective date is permissible in a waiver amendment that only includes changes that are not
substantive such as for the purpose of increasing the unduplicated number of participants. The
state is required to establish a public input process specifically for HCBS waiver changes that are
substantive in nature. Substantive changes must be accompanied by information on how the state
has assured smooth transitions and minimal adverse impact on individuals impacted by the change.
When an amendment would have the effect of reducing the number of waiver participants, the
state also should review CMS guidance in Olmstead Letter #4 (located in Attachment D to the
instructions).
As a result of its review of the annual waiver report (CMS-372), CMS may instruct the state to
submit a waiver amendment when the CMS review reveals that the state is serving a significantly
greater number of persons than provided in the approved waiver, actual waiver expenditures
substantially diverge from the amounts in the approved waiver, or the state is providing services
not included in the approved waiver. When the annual waiver report reveals that the waiver may
not be cost-neutral, CMS may require the state to take remedial actions to correct the problem (see
the next part of the instructions).

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Related Topics

CMS Technical Assistance
States are encouraged to confer with CMS when preparing preliminary initial and renewal waiver
applications or significant amendments in advance of their formal official submission to CMS.
Such informal consultation prior to the formal submission may expedite CMS review of the formal
submission. States also may request technical assistance concerning waiver operations. Technical
assistance should be requested through the Regional Office, which will confer with DEHPG as
necessary to address questions or technical aspects of the proposed waiver.
Administrative Claiming
Some activities such as case management, supports broker, and financial management services
may be provided as a Medicaid administrative activity rather than as a waiver service. States must
ensure that any such administrative costs, necessary for the efficient administration of the
Medicaid State Plan, are in accordance with a CMS-approved cost allocation plan. Please note
that cost allocation plans are not approved via approval of a 1915(c) HCBS waiver application.
Waiver Termination
There are three potential processes for terminating waivers, depending on the circumstance:
1. A state may elect to terminate the operation of an approved waiver before its expiration date:
• As provided by 42 CFR Section 441.307, when the state elects to terminate the waiver
prior to its expiration date, the state must notify CMS in writing, in the form of a waiver
amendment, at least 30-days in advance before terminating services to waiver
participants.
 Under the ‘purpose of the amendment’, the state should indicate that the waiver
is being terminated and should indicate the termination date.
 A transition plan should be included in Attachment #1. If phasing into another
authority, this transition plan should be accounted for in the accepting authority.
 If the state is phasing out the waiver, there should be a phase-out schedule,
factor c should be adjusted/and or the phase out of slots should be addressed in
the transition plan and estimates in Appendix J updated.
 If this is the first action submitted to the waiver between March 17, 2014 and
March 17, 2015, the amendment must include an HCB Settings Transition Plan
(Attachment #2). In this case, the amendment would trigger the 120-day
statewide HCB Settings Transition Plan.
• As provided in 42 CFR 431.210, the state must notify waiver participants at least 30
days in advance of the change.
2. A state may elect to terminate the operation of an approved waiver and allow it to expire at the
end of the approved waiver cycle:
• The state is required to notify CMS at least 30 days in advance via a letter to the RO
when individuals are all transitioned at one time. A waiver amendment for closing the
waiver is not required.

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•

•

 The state must include in their notice to CMS what will happen to current
participants when the waiver ends.
 In most cases, they may have been transitioned to another waiver or authority,
or the state may have phased out the waiver.
Please note that a waiver amendment is required when individuals are being
transitioned over a period of time, when waivers are being combined, subsumed, or
participants are being transitioned to other authorities. If an amendment is required, if
this is the first action submitted to the waiver between March 17, 2014 and March 17,
2015, the amendment must include an HCB Settings Transition Plan (Attachments #2).
In this case, the amendment would trigger the 120-day statewide HCB Settings
Transition Plan.
In transitioning individuals, requirements for notice to participants must be met. The
state must notify waiver participants at least 30 days in advance of the change.

3. As provided in 42 CFR §441.304(d), CMS may terminate a waiver when it finds that the state
is not meeting one or more waiver requirements (e.g., the state has not assured the health and
welfare of waiver participants or the waiver is not cost neutral). CMS may terminate a waiver
for one or more of the following reasons:
• The health and welfare of waiver participants has been jeopardized;
• The waiver is not cost-neutral;
• The state has not submitted required annual waiver reports;
• Accurate financial records have not been maintained to document the cost of waiver
services;
• The waiver has not been operated in a manner consistent with the approved waiver; and/or,
• The waiver has not been operated in accordance with other applicable federal requirements.
When CMS determines that it is necessary to terminate a waiver, it gives the state notice of its
findings and the opportunity for a hearing to rebut these findings. After the notice and hearing,
CMS may terminate the waiver. As provided in 42 CFR §441.308, the procedures specified in
Subpart D of 42 CFR §430 apply to a state’s request for a hearing concerning a waiver termination.
If CMS terminates the waiver, the state must notify affected waiver participants at least 30-days
in advance before terminating their services.

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Overview

Post Approval Activities

This section briefly addresses the following topics:
•
•
•

The preparation and submission of the annual waiver report;
On-going dialogue between the state and CMS concerning waiver operations; and,
CMS report to the state prior to waiver renewal.

Annual Waiver Report

As provided in 42 CFR §441.302(h) (which implements §1915(c)(2)(E) of the Act):
“annually, [the state] will provide CMS with information on the waiver’s impact. The information
must be consistent with a data collection plan designed by CMS and must address the waiver’s
impact on—
(1) The type, amount, and cost of services provided under the state plan; and
(2) The health and welfare of recipients.”
The state must assure that it will prepare and submit the annual waiver report as a condition of the
approval of the waiver.
Annual Report Form CMS-372(S)
Currently, in order to satisfy the annual waiver report assurance, a state must annually prepare and
submit the Form CMS-372(S) (Simplified) report. Instructions and guidance concerning the
preparation and submission of the CMS-372(S) are located in the State Medicaid Manual, Section
2700.6 et seq. The CMS-372(S) aligns the annual waiver report with the simplified waiver costneutrality formula (see instructions for Appendix J).
The CMS-372(S) requires that a state report for each waiver year financial/statistical and other
information about the waiver. This information includes: (a) the unduplicated number of persons
who participated in the waiver during the waiver year; (b) the number of participants who utilized
each waiver service; (c) the amount expended for each waiver service and for all waiver services
in total; (d) the average annual per participant expenditures for waiver service; (e) the total number
of days of waiver coverage for all waiver participants and the average length of stay (ALOS) on
the waiver; (f) expenditures under the state plan for non-waiver services (including services
required under EPSDT when the waiver serves children) that were made on behalf of waiver
participants and average per participant expenditures for such services (based on the number of
participants who utilized such services); and, (g) information about the impact of the waiver on
the health and welfare of waiver participants.
The CMS-372(S) reports the actual performance of a waiver against the prospective cost-neutrality
demonstration in Appendix J of the revised waiver application. In addition, the financial and
statistical data reported via the CMS-372(S) also serves as the baseline for the prospective
demonstration of cost-neutrality when the state submits a renewal application for an approved
waiver.

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CMS reviews the annual CMS-372(S) report as part of its ongoing oversight of the operation of
HCBS waivers. This review is discussed below. In addition, one of the requirements for CMS
consideration of a waiver renewal application is that the state must have submitted, and CMS
accepted CMS-372(S) reports through the next to last year of the period that the approved waiver
is in effect. If the state is unable to prepare timely and acceptable CMS-372(S) reports, the renewal
of the waiver may be jeopardized.
Review of the Annual Waiver CMS-372(S) Report
CMS compares the financial and statistical information that the state submits to the demonstration
of cost-neutrality in the approved waiver. This review may trigger two types of follow-up actions:
•

•

Waiver Amendment. If the review of the annual waiver report reveals that the number of
waiver participants is significantly greater than the number estimated by the state in the
approved waiver and/or waiver expenditures (in total or on an average per participant basis)
exceed those estimated in the approved waiver, the state may be required to submit an
amendment to the approved waiver to align the demonstration of cost neutrality in the
approved waiver to actual experience. States are expected to monitor waiver utilization
and expenditures and submit amendments as necessary. It is not necessary to submit an
amendment to reflect minor differences in the number of waiver participants or the
utilization or costs of specific waiver services. So long as the annual report confirms that
the waiver meets the cost-neutrality assurance, these types of amendments will be treated
as “technical” in nature.
Potential Violations of the Cost-Neutrality Assurance. When the annual waiver report
reveals that the waiver does not meet the cost-neutrality assurance (i.e., the annual average
per capita cost of supporting individuals on the waiver exceeds the annual average cost of
individuals who receive institutional services at the waiver’s level of care), the state may
be required to initiate corrective action to bring the waiver into alignment with the costneutrality requirement. The implementation of the necessary corrective actions may entail
the submission of amendments to the approved waiver. If the state fails to initiate
satisfactory corrective actions, CMS may terminate the waiver or disapprove its renewal.
It is expected that states monitor waiver expenditures and initiate corrective actions as
necessary to assure the cost-neutrality of the waiver.

Ongoing CMS-State Dialogue During the Waiver Period

During the waiver period, the Regional Office is charged with oversight of state waiver operations
and making a determination that the waiver has been operated in accordance with the approved
application and that the state has met the waiver assurances and related federal requirements. CMS
urges that states engage in an on-going dialogue with the Regional Office about the operation of
the waiver. This dialogue may include discussions of changes to improve waiver operations,
involving the RO in problem solving to address issues that might arise in waiver operations, and
keeping the RO apprised of progress in implementing the waiver’s Quality Improvement Strategy.
When appropriate and necessary, the RO will involve DEHPG/DLTSS in this dialogue. This
contractor can provide assistance to states in designing a QMS or the design of systems to address

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specific aspects of quality improvement. This assistance is provided at no charge to the state;
however, the amount and extent of the assistance is limited by available resources.
CMS Oversight of State Waiver Operations
CMS has revised its oversight procedures for determining whether the waiver meets the assurances
and applicable federal requirements. In place of conducting a review of a small sample of waiver
participants once during the waiver period, CMS, under the Interim Procedural Guidance, requests
that the state provide evidence from its own oversight activities related to the assurances in the
year prior to expiration of the waiver. Combined with information obtained by the RO throughout
the waiver period, the RO makes a determination about the state’s performance and communicates
it through the draft report. In the future, the state will provide evidence annually. The RO may
continue to visit states to observe and learn about the operations of the program.
CMS may find it necessary, in certain circumstances, including when the health and welfare of
waiver participants may be jeopardized or the waiver is not being operated in accordance with
other applicable federal requirements, to conduct special or focused on-site or off-site review
activities. Prior to launching a special review, the Regional Office will identify to the state the
types of information that it requires in order to perform the review. When CMS determines that
such a review is necessary, it will notify the state of why the review is being undertaken. The
results of this type of review may necessitate the state’s preparing and implementing a corrective
action plan.

CMS Report to the State Prior to Waiver Renewal

At least one year in advance of the expiration date of an approved waiver, the RO will issue a draft
report to the state summarizing its findings and conclusion. The report may in some cases include
recommendations. If the draft report concludes that one or more requirements are not met, then the
RO must provide the basis for the conclusion. In its response to the draft report, the state may
dispute the RO findings or propose a course of action to remediate the problem, either immediately
or by implementing a corrective action plan with milestones to resolve the problem(s). If the state
does not propose a satisfactory course of action, CMS may not approve the state’s waiver renewal
application.

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Detailed Instructions for the Completion of
the Version 3.6 §1915(c)HCBS Waiver
Application
Overview

The detailed instructions for completing the Version 3.6 §1915(c) HCBS Waiver Application are
divided into two parts:
•

•

The first part (Using the Application) provides information about completing the webbased application. It discusses the formatting of the application and provides additional
information about various elements of the application.
The second and larger part (Detailed Instructions) contains module-by-module, item-byitem application instructions. These instructions include technical guidance (where
applicable) and the review criteria that CMS applies in reviewing waiver applications.

Overview

Using the Application

The web-based application links relevant parts of the application and ensures that the application
is complete when it is submitted. The web-based application format includes technical instructions
for its use.
Technical instructions for use of the web-based application are available at https://wmsmmdl.cdsvdc.com/WMS/faces/portal.jsp. In addition, each state has a designated systems
administrator (within the Medicaid Agency) who provides state user access and assigns roles
related to the use of the application.
Please note that there is no means to load a draft application prepared in word processing software
into the web-based application tool. Text may be copied and pasted; selections must be made
manually.

Application Format

The application is formatted so that many items in the revised application can be completed by
making a selection from a pre-specified list of responses. Other items require text responses. There
are two types of response lists where a state responds to an item by selecting from a pre-specified
list that contains two or more potential responses. Some application items combine both types of
selectable choices. These types of lists are:
•

No more than one selection permitted from among two or more possible choices.
Some items provide for the selection of only one of two or more pre-specified choices.

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Items of this type appear in the application in the following format and are cued by the
instruction “select one”:
a.

The state is a (select one):


§1634 State



SSI-Criteria State



209(b) State

II

For items of this type (where selectable choices are indicated by the “” symbol), select one
and only one of the pre-specified responses. The web-based application is designed so that it
is only possible to make only one selection in items of this type.
• More than one selection from several choices. In the case of other items, the application
permits selecting more than one of the listed responses. Items of this type appear in the
application in the following format and are cued by the instruction “check each that
applies”. An example of this type of item is:
a. Responsibility for Service Plan Development. Per 42 CFR §441.301(b)(2), specify who is
responsible for the development of the service plan and the qualifications of these individuals
(check each that applies):


Registered nurse, licensed to practice in the state



Licensed practical or vocational nurse, acting within the scope of practice under state law



Licensed physician (M.D. or D.O)



Case Manager (qualifications specified in Appendix C-3)



Case Manager (qualifications not specified in Appendix C-3). Specify qualifications:



Social Worker. Specify qualifications:



Other (specify the individuals and their qualifications):

The selectable choices in items of this type are indicated by the “” symbol. In the case of these
types of items, one, two or more of the choices listed may be selected. The selection of one of the

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choices does not preclude the selection of the other choices. The web-based application permits
multiple choices to be made in items of this type.
In some cases, the selection of a pre-specified response from a list may prompt completing
subsequent items or direct skipping the subsequent items and going on to a later item. Linkages
among items are programmed into the web-based application. For example, if a response to one
item permits skipping another item, the affected subsequent item is not available for completion
in the web-based application.
Where the application requires a text response (for example, when the application requires that a
policy or practice must be specified), the response is inserted into a text field. Text fields appear
in the application as follows:

Text fields sometimes standalone. This is the case when only a narrative response is required to
complete an item. In other instances, text fields are associated with choices in an application item
(as in the foregoing example). The size of a text field as it visually appears in the web-based
application is not to be understood as depicting the expected or desired length of a response. Text
fields will accommodate responses that are longer than the text field that appear in the application.
In the web-based application, all text fields are character-limited. That is, they will only
accommodate a certain amount of text as measured by a character count (where spaces count as a
character). These limits were established during the web-based application design and further
refined during alpha and beta testing of the web-based application. The web-based application
provides the user information about the character-limits associated with each text field. A counter
above each text box will indicate how many characters have been used and are remaining. The
limits that have been established are generous. However, there are some items where the limits
have been purposely set to restrict the length of a state’s response. In either application format,
one page is 6,000 characters regardless of the physical length of the printout.
When using the web-based application, it may prove to be more convenient to prepare lengthier
text responses using standard word processing software and then copy and paste the text into the
web-based application. It is important to point out that the web-based application only
accommodates plain text. Formatted text (e.g., bolding, italics, underlining), graphics (including
text converted to graphics) and tabular formats cannot be accommodated. This aspect of the webbased application also means that copying and pasting information from formatted source
documents (e.g., copying a form) generally cannot be accommodated unless copied as plain text.
Additionally, the width of text boxes in the web-based application is fixed.
Italicized text in the application denotes an instruction or sometimes provides a brief explanation
of an item or application component.
The application is designed to be a self-contained document. The web-based application does not
accommodate submission of supplementary electronic files or paper documents. Therefore, the
Version 3.6 format also does not reference supplementary material.

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As necessary and appropriate, a state may cite applicable laws, policies or regulations in its
response to an item but should not attach these materials to the application. If, during the course
of its review, CMS finds it necessary to examine materials that are referenced in the application,
the state will be asked to furnish them. When such materials are provided in response to a CMS
informal or formal request, they are not considered to be part of the waiver application.
When materials are referenced or cited in the application, they must be readily available through
the state Medicaid agency and/or the waiver operating agency (if applicable) should CMS request
the materials. It is not necessary that the state Medicaid agency maintain printed copies of all
referenced or cited materials. Materials may be maintained in electronic format.

Detailed Instructions, Technical Guidance
and Review Criteria
This part of the instructions includes section-by-section, item-by-item instructions for completing
the Version 3.6 HCBS Waiver Application. Where appropriate, technical guidance is provided
about an item or topic. CMS review criteria associated with an item or items also are included.
The instructions are keyed to the application.

Application for a §1915(c) Home and CommunityBased Services Waiver (Module 1)
Overview

This component of the application includes the following sections:
•
•
•
•
•
•
•
•

Basic information about the waiver request;
A brief description of the waiver;
A recap of the waiver application components;
The waiver(s) requested by the state;
The assurances that the state must make concerning the operation of the waiver;
Additional requirements associated with the operation of a waiver;
State contact information; and,
The signature of the State Medicaid Director or designee transmitting the application.

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1. Request Information
Overview

This section provides basic information about the waiver.

Item 1-A: State
Instructions

In the web-based application, the state name is entered automatically.
Item 1-B: Waiver Title
Instructions

If the waiver has a title (e.g., “Innovations Waiver”), enter the title. Otherwise, leave blank.
Item 1-C: Type of Request
Instructions

From the choices provided, select the type of request. In the case of a renewal request, a request
for a new waiver to replace an existing waiver or an amendment to an approved waiver, enter the
CMS waiver control number of the approved waiver. Regular waivers have a four-digit waiver
control number assigned by CMS plus extensions (when applicable) that indicate previous
renewals (e.g., the number 0999.90 indicates that the waiver has previously been approved once
for renewal). In the case of a model waiver, the waiver control number is a five-digit number plus
extensions. In the web-based application, this item is pre-filled based on the selection that is made
when the state initiates a new request.
Technical Guidance
Refer to the “Waiver Application Submission Requirements, Processes, and Procedures” section
of the instructions for a discussion of policies and other considerations regarding new waivers,
new waivers to replace an approved waiver, and waiver renewals. Also see instructions regarding
Attachment #1 for submitting transition plans when a new waiver is to replace an approved waiver,
and the other circumstances where a transition plan may be required. Please consult CMS directly
to discuss particular situations. Please note that if the state requests a five-year initial waiver per
the requirements of Section 2601 of the Affordable Care Act, the state must assure that the waiver
provides services to individuals who are eligible for both Medicaid and Medicare.
CMS Review Criteria
•
•

The type of request (i.e., new waiver, renewal, amendment) has been specified by the state.
For new waivers, the state has indicated the requested approval period (i.e., 3 years or 5
years).

Item 1-D: Type of Waiver
Instructions
Select the type of waiver that is requested.

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Technical Guidance
A “model” waiver is limited to serving no more than 200 individuals at any point in time during
the waiver period. A model waiver may serve fewer than 200 persons, depending on the participant
limit that a state establishes (as specified in Appendix B-3). Except for assuring that the waiver
will serve no more than 200 individuals at any point in time, “model” and “regular” waivers are
no different. A regular waiver also may serve a relatively small number of individuals.
A state may subsequently convert a model waiver to a regular waiver in order to serve more than
200 individuals. The conversion may be requested via the submission of a waiver amendment or
when the waiver is renewed. Provided that no other major changes are proposed, the conversion
of a model to a regular waiver is not considered to be a request for a new waiver. When conversion
is requested via the submission of an amendment, the period that the waiver is in effect does not
change.
Item 1-E.1: Proposed Effective Date
Instructions

Enter the proposed effective date of the waiver.
Technical Guidance
The effective date is the first day that the waiver will be in operation. In order to facilitate annual
waiver reporting, a new waiver should have an effective date that falls on the first day of a month
or the beginning of a calendar quarter. Also, in the case of new waivers, the proposed effective
date should be at least 90-days from the date of application submission in order to allow sufficient
time for CMS review of the application and a subsequent prospective effective date.
In the case of a renewal application or a new waiver that replaces an approved waiver, the proposed
effective date should be the day after the approved waiver expires. If a temporary extension has
been granted, the effective date may subsume all, part or none of the extension period.
In the case of an amendment, the proposed effective date is the date that the amendment would
take effect. Again, keep in mind that any changes included in the amendment must be effective
on the same date. See also Policies Concerning Waiver Amendments for a discussion of when
amendments may be made effective.
Item 1-E.2: Approved Effective Date
Instructions

This item is reserved for CMS use. When the application is approved, CMS will enter the approved
effective date. If this date is different from the proposed effective date, the application will be
revised to reflect the approved effective date.
Item 1-F. Level(s) of Care
Instructions

Select the level or levels of care that individuals must require in order to be considered for entrance
to the waiver. As applicable, specify the specific type of institutional setting or subcategory of a
level of care.

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Technical Guidance
Waiver services may only be furnished to individuals who are determined to require the level of
care furnished in a hospital, nursing facility or ICF/IID when the costs of such institutional care
are reimbursable under the state plan. The waiver must specify the level(s) of care that individuals
require in order to enter the waiver. More than one level of care may be selected, depending on the
target group(s) served in the waiver. For example, if the waiver is designed to support medically
fragile children in the community, it may be appropriate to select both the hospital and nursing
facility levels of care.
Level of care is one of several application elements that, when taken together, specify the target
population of Medicaid beneficiaries who may participate in the waiver. In Appendix B-1, the
state further specifies the waiver’s target group(s) (i.e., the specific groups or subgroups of
individuals who require the level of care that is specified here – for example, older persons – and
may receive waiver services). In Appendix B-4, a state also specifies the Medicaid eligibility
groups that may be served in the waiver. In Appendix B-6, the process by which the level of care
of potential entrants to the waiver is evaluated and re-evaluated is described.
When completing this item, it is important to keep in mind that, per 42 CFR §441.301(a)(6), a
waiver may, at the state’s option, serve one or more of the following three groups of Medicaid
beneficiaries or subgroups thereof:
• Aged and/or disabled;
• Persons with intellectual disability and/or developmental disabilities; or,
• Persons with serious mental illnesses.
These three groups are discussed in more detail in the instructions for Appendix B-1.
Only in limited circumstances may the ICF/IID level of care be combined with another level of
care. As provided in Olmstead Letter #4 (see Attachment D to the instructions), when a waiver
serves persons who have experienced a brain injury, the waiver may serve individuals who require
ICF/IID level of care (when the brain injury occurred at a young age) and persons who experienced
a brain injury at a later age who may require the nursing facility or hospital level of care.
A waiver may not serve individuals between the ages of 22 and 64 who would, but for the waiver,
receive services in an Institution for Mental Disease (IMD). The reason is that, under the Act,
federal financial participation is not available for the costs of services furnished in an IMD to
individuals in this age range. However, individuals with serious mental illnesses in this age range
who require the nursing facility level of care according to a Preadmission Screening and Resident
Review (PASRR) determination may receive waiver services. See the Appendix B-1 instructions
for a more detailed discussion of this topic. A waiver may serve persons age 65 and older with
serious mental illnesses who would otherwise reside in an IMD when the state plan provides for
the reimbursement of IMD services under the provisions of 42 CFR §440.140. A waiver also may
serve children and youth with serious emotional disturbances who require the level of care
furnished in inpatient psychiatric facilities for individuals under age 21 when the services furnished
in such facilities are included in the state plan as provided in 42 CFR §440.160 and are provided
in a facility licensed as a hospital. Except as provided in Section 6063 of the Deficit Reduction
Act of 2005 (P.L. 109-171), a waiver cannot serve as an alternative to services in a Psychiatric
Residential Treatment Facility (PRTFs – as defined in 42 CFR §483.352) that serve children and
youth since §1915(c) of the Act does not authorize waivers as an alternative to PRTFs. The Deficit

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Reduction Act provides for the provision of home and community-based alternatives to PRTFs on
a demonstration basis in ten states.
Some states have established subcategories of the major level of care categories (e.g., skilled and
intermediate care nursing facility services). A state may limit the waiver to one or more of these
subcategories (e.g., a state may have defined multiple levels of ICF/IID care but decides to limit
the waiver to individuals who qualify for one or more of the specific levels). It is permissible for
a state to target the waiver in this fashion provided that the level of care subcategories is
incorporated into the state plan. If the state wishes to limit the waiver in this fashion, specify the
subcategories (e.g., Rehabilitation Hospital under the hospital category). If subcategories are not
specified in the state plan or, if they are specified, but the state does not wish to limit the waiver
to specified subcategories, insert “not applicable.” Keep in mind that in Appendix B-1, the waiver
target population may be further specified by age, group, condition and other factors.
When the waiver serves individuals, who require different levels of care, the demonstration of
cost-neutrality in Appendix J is affected. Cost neutrality calculations are based on the Medicaid
state plan costs associated with individuals who have the level of care specified for the waiver.
When more than one level of care is selected, cost neutrality calculations must be based on the
calculation of a weighted average across the levels of care (see instructions for Appendix J-1).
CMS Review Criteria
• The level(s) of care proposed complies with 42 CFR §441.301(a)(3).
• The state’s proposed level(s) of care aligns with the target group definition contained in
Appendix B-1.
• When subcategories of a level of care are specified, the subcategories are contained in the
approved state plan.

Item 1-G: Concurrent Operation with Other Programs
Instructions
Indicate whether the waiver is or will be operated concurrently with a program that is operated
under one of the other authorities listed. If the waiver will operate concurrently with a §1915(b)
waiver, specify the program and indicate whether a §1915(b) waiver application has been
submitted simultaneously or has been previously approved. Similarly, if the waiver will operate
concurrently with a program authorized under §1115 of the Act, specify the program and indicate
whether a §1115 waiver application has been submitted simultaneously or has been previously
approved. In addition, the state should indicate here if the waiver is operating concurrently with a
contract approved under §1915(a) of the Act, a state plan amendment under §1915(i) of the Act, a
state plan amendment under §1915(j) of the Act, or a state plan amendment under §1915(k) of the
Act. If the waiver does not operate concurrently with another program, select “not applicable.”
Technical Guidance
A HCBS waiver may operate concurrently with programs approved under other authorities in the
Act. For the purpose of this item, “concurrent operation” means that the operation of the HCBS
waiver is directly tied to the use of another authority in the Act. For example, some states operate
concurrently §1915(b)/§1915(c) waivers wherein the §1915(b) authority is used to obtain waivers
of provisions of the Act in addition to the waivers that may be granted under §1915(c). Some of
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these programs employ managed care service delivery methods to furnish HCBS waiver and other
state plan services to Medicaid beneficiaries.
This item does not apply when HCBS waiver participants only receive Medicaid state plan health
care services through managed care or Primary Care Case Management (PCCM) arrangements
that are furnished under another authority. It only applies when the delivery of waiver services is
affected by the use of another authority. Please see the Appendix I instructions for a discussion of
the §1915(a) authority.
As discussed in the “Waiver Application Submission Requirements, Processes, and Procedures”
section of the instructions, when a state wants to launch a concurrent managed care/§1915(c)
waiver, separate managed care and §1915(c) waiver applications must be submitted because CMS
must review each application simultaneously. Once a concurrent §1915(b)/ §1915(c) waiver is
approved, the renewal of each waiver is subject to the timelines under each authority (two or five
years for the §1915(b) waiver and three or five years for the §1915(c) waiver). Should the
§1915(b) waiver expire or terminate prior to expiration, the state must amend the §1915(c)
accordingly.
CMS Review Criteria
• Both waiver applications have been submitted and have the appropriate proposed effective
dates.
• In the case of a new concurrent authority, the §1915(c) waiver may only be approved
when the concurrent authority has been approved and vice versa.

Item 1-H: Dual Eligibility for Medicaid and Medicare
Instructions

Check the box if the Waiver provides services for individuals who are eligible for both Medicare and
Medicaid.

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2. Brief Waiver Description

Instructions
In one page or less (6,000 or fewer characters), briefly describe the purpose of the waiver,
including its goals, objectives, organizational structure and service delivery methods.
Technical Guidance
The brief description provides CMS with an overview of the waiver’s role in supporting
individuals in their homes and communities and, thereby, facilitates CMS review of the
application.
There is no pre-specified format for this brief description. However, the description should
include: a discussion of the program’s purpose (e.g., rebalance resources between institutional and
community services or provide community alternatives for children who have complex medical
conditions who otherwise would be hospitalized); its goals (e.g., facilitate the community
transition of institutionalized persons or implement participant direction in three regions of the
state); its objectives (e.g., transition 200 persons to the community each year of the waiver period);
organizational structure (e.g., the state agency responsible for operating the waiver and how
individuals access services at the local/regional level); and, service delivery methods (e.g., the use
of participant-directed or traditional service delivery methods). The brief description also may
address other topics that the state believes will contribute to CMS understanding of what the state
is seeking to accomplish through the operation of the waiver.

3. Components of the Waiver Request

Instructions

Select whether the waiver provides for participant direction of services.

Technical Guidance
This part of the application summarizes the remaining components of the application. It is included
to inform interested persons about the scope and contents of the application. Item E (Participant
Direction of Services) is the only item in this section for which a response is required. It asks
whether the waiver provides participants the opportunity to direct some or all of their waiver
services. If the waiver does, then Appendix E must be completed. If not, Appendix E is not
completed.
Before responding to this item, review Appendix E and its instructions. Appendix E revolves
around two opportunities for participant-direction of waiver services: the participant-employer
opportunity and the budget authority opportunity (these opportunities also may be combined).
When a state currently does not provide for participant direction, CMS urges that serious
consideration be given to affording waiver participants the opportunity to direct some or all of
their waiver services. States that already provide one or both of these participant direction
opportunities or want to expand the opportunities that are available to individuals must complete
Appendix E.

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4. Waiver(s) Requested

Overview
§1915(c) of the Act permits the Secretary to grant waivers of three specific provisions of the Act.
As discussed below, all HCBS waiver programs operate under a waiver of §1902(a)(10)(B) of the
Act (comparability). A state also may request waivers of two other provisions of the Act:
statewideness and income/resources. Except for these waivers, HCBS waivers must comply with
all other relevant provisions of the Act unless the waiver also operates concurrently with waivers
granted under other authorities that permit the waiver of additional provisions of the Act. For
example, under the provisions of §1902(a)(23) of the Act, waiver participants must be able to
exercise free choice in selecting any willing and qualified provider of waiver services included in
their service plan. Should a state wish to limit the number of providers, it must secure a waiver of
§1902(a)(23) (e.g., by separately requesting a waiver under the provisions of §1915(b) of the Act).

Item 4-A: Comparability
Technical Guidance
§1902(a)(10)(B) of the Act provides that Medicaid services must be available to all categorically
eligible individuals on a comparable basis (e.g., services available to adult beneficiaries with
disabilities cannot be different in their amount, scope and duration from the services that are
available to other adult beneficiaries). HCBS waivers target services only to specified groups of
beneficiaries (e.g., persons with developmental disabilities or older persons) rather than making
them available to all beneficiaries. Thus, a waiver of §1902(a)(10)(B) is an integral and necessary
feature of all HCBS waivers. HCBS waivers also include services that are not otherwise available
under the state plan and thus not available to beneficiaries who do not participate in the waiver. In
order to make those services available, a waiver of comparability also is necessary. The waiver
application incorporates the request for a waiver of §1902(a)(10)(B). Submission of the application
constitutes the state’s request for this waiver.

Item 4-B: Income and Resources for the Medically Needy

Instructions
Select whether the state requests a waiver of §1902(a)(10)(C)(i)(III) of the Act in order to use
institutional income and resource rules for the medically needy.
Technical Guidance
If the state elects to cover the medically needy under the waiver, it may request a waiver of
§1902(a)(10)(C)(i)(III) of the Act so that it may waive the community income and resource rules
that apply to the medically needy and, instead, apply institutional income and resource eligibility
rules. Institutional income and resource rules usually are more generous than community rules.
Application of institutional deeming rules means that income and resources are not deemed to the
person from a spouse or parent; thus, making an individual eligible for Medicaid who might not
otherwise qualify. This permit covering under a waiver medically needy individuals who may not
be eligible for waiver services under community rules but would be eligible under institutional
rules. If the waiver serves the medically needy, indicate whether or not this section is waived. If
the state does not serve the medically needy under its state plan, check “not applicable.” It is
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important to point out that the waiver of this provision of the Act only applies to the medically
needy and that population must be served under the state plan in order for a waiver of
§1902(a)(10)(c)(i)(III) to be requested.
CMS Review Criteria
When a waiver of §1902(a)(10)(C)(i)(III) is requested:
• The state must cover the medically needy in the state plan
• The state must include the medically needy in the eligibility groups that may receive
waiver services as provided in Appendix B-4 of the application

Item 4-C: Statewideness
Instructions
Select whether a waiver of statewideness is requested. If a waiver is requested, specify the type
or types of waivers of statewideness that are requested and provide the information that is
specified.
Technical Guidance
§1902(a)(1) of the Act requires that the Medicaid state plan be in effect in all political subdivisions
of the state. As provided in §1915(c)(3) of the Act, a state may request a waiver of §1902(a)(1) in
order to operate a waiver on a less than statewide basis. The Version 3.6 HCBS waiver application
provides for requesting two types of waivers of statewideness:
•

Geographic Limitation. A state may request a waiver of statewideness in order to furnish

waiver services only to eligible persons who reside in specific geographic areas (e.g., state
planning regions or human services catchment areas) or political subdivisions (e.g.,
counties or municipalities) of the state. When the waiver is limited to specific political
subdivisions, list the subdivisions. When the waiver is limited to another type of geographic
area (e.g., state planning region), describe the area and, if applicable, include a reference
to the state law or other official document (e.g., governor’s executive order) that defines
the geographic area. The description must be specific enough so that the geographic areas
where the waiver is in effect are clearly specified. Absent a waiver of statewideness, the
waiver is considered to be in effect in all parts of the state.
Only request a waiver of statewideness in order to confine the operation of the waiver to
specified geographic areas. A waiver of statewideness should not be requested because
some waiver services may not be readily accessible in all parts of the state. A waiver of
statewideness may not be requested in order to provide different arrays of waiver services
or administer the waiver differently in different parts of a state under the same waiver. If
the state wants to provide different service arrays or operate the waiver differently in
different parts of the state, it must apply for a separate waiver for each area. In other words,
where the waiver is in effect, the waiver must operate consistently in all the areas served
by the waiver.
The request for a waiver of statewideness may also provide for the phase-in of the waiver
by geographic area by waiver year. For example, a state may provide that the waiver is in
effect in specified counties during its first year of operation but will be in effect statewide

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•

during the second and subsequent years of the waiver. If the waiver will be phased-in
geographically, request a waiver of statewideness and in the text field specify the
geographic area phase-in schedule. If this schedule changes during the period that the
waiver is in effect, submit an amendment to reflect the revised phase-in schedule.
Limited Implementation of Participant Direction. A state also may request a waiver of
statewideness for the purpose of implementing one or both participant direction
opportunities that the state specifies in Appendix E on less than a statewide basis. A waiver
of statewideness for this purpose may be requested in conjunction with a waiver that
otherwise operates on a statewide basis. This waiver may be useful for states that are
interested in affording participants opportunities to direct waiver services but want to
phase-in the implementation of participant direction by geographic area. If the waiver
operates on a less than statewide basis, this waiver may be requested to offer participant
direction opportunities in some but not all the geographic areas where the waiver operates.
This waiver does not permit a state to limit the number of individuals who may direct their
services within the designated geographic locations.
This waiver will be granted only when the waiver participants in the geographic areas
where participant direction is available also have the choice of receiving waiver services
through the service delivery methods that are in effect elsewhere. In other words, this
waiver cannot be granted if participant direction would be the only service delivery method
available to participants in the geographic areas where participant direction is made
available. Participants who reside in the area subject to this waiver must have access to
the same services as participants elsewhere in the state.
Since the implementation of participant direction requires making available additional
supports to participants who direct their waiver services (e.g., financial management
services), a state may include such supports in the waiver but limit their availability (when
covered as a waiver service) to individuals who elect to direct their waiver services. This
limitation must be included in the specification of the scope of the support service in
Appendix C-3.
In requesting this waiver, the same requirements apply with respect to defining the specific
geographic areas where participant direction opportunities will be available as for a
geographic limitation. The waiver also may provide for the phase-in of participant direction
by geographic area by waiver year.

CMS Review Criteria
• When a waiver of statewideness is requested to limit the operation of the waiver to regions
or areas of the state or to implement participant direction of services in some but not all
areas where the waiver is in effect, the waiver clearly defines the geographic areas where
waiver services and/or participant direction will be available.
• Waiver participants in the geographic areas where participant direction is available also
have the choice to receive waiver services through the service delivery methods that are
in effect elsewhere.

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Overview/Discussion

5. Assurances

In order for CMS to approve a new waiver or the renewal of an approved waiver, a state must
make certain assurances concerning the operation of the waiver. These assurances are spelled out
in 42 CFR §441.302 and included in this part of the waiver application. By submitting the waiver
application, the state attests that it will abide by these assurances during the period that the waiver
is in effect. These assurances may not be altered.
Other components of the application address how the waiver is designed to meet these assurances.
For example, Appendix B details how the state will meet the evaluation of need assurance. In
addition, the Quality Improvement Strategy contained throughout the application and in Appendix
H describes how the state will monitor performance in meeting the assurances on a continuing
basis during the period that the waiver is in effect.

Overview

6. Additional Requirements

This section includes additional requirements that apply to the operation of HCBS waivers over
and above the assurances contained in 42 CFR §441.302. States are reminded that waivers must
comply with all applicable Medicaid requirements, including requirements that are not listed in
this part of the application. Item 6-I (public input) is the only item in this part that requires a
state response. The basis of these requirements is discussed below.

Discussion of Additional Requirements
Item 6-A: Service Plan
The services that an individual will receive through the waiver must be spelled out in advance in
a written service plan. In the revised application, the terminology “participant-centered service
plan” or “service plan” is synonymous with “plan of care.” This item spells out federal
requirements that pertain to the service plan. Appendix D describes the process that is employed
in the waiver to develop the service plan. Service plan development is a critical waiver function.
The service plan spells out how the assessed needs of each waiver participant will be met.
The requirements related to the service plan are as follows:
•

•

Waiver services must be furnished in accordance with the service plan. Whenever the
services that are furnished to a participant change, the service plan must be revised. A state
may provide for processes to authorize the provision of waiver services on an emergency
basis, provided that the service plan is revised to reflect the additional services.
The service plan must be inclusive of all the services and supports that are furnished to meet
the assessed needs of a participant, including services that are funded from sources other than
the waiver (e.g., services that are obtained through the state Medicaid plan, from other public
programs and/or through the provision of informal supports). In other words, the service plan
should provide a complete picture of how participant needs are met. It is recognized that the
waiver operating agency and the state have direct responsibility only for the delivery of
waiver services. With respect to other public services and informal supports, responsibilities

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•

•
•

include linkage, referral and advocacy and monitoring access to and receipt of other services
as part of service plan implementation (as described in Appendix D-2).
With respect to waiver services, the service plan must include the specific waiver services
that will be furnished to a participant, their amount, duration and frequency (e.g., daily or
weekly), and the type of provider that will furnish each service. The service plan need not
name the specific provider that will furnish each service, only the type of provider (e.g., home
health agency or personal assistant).
Federal financial participation (FFP) may not be claimed for waiver services that are
furnished prior to the development of the service plan or for waiver services that are not
included in an individual’s service plan. A service plan may not be backdated.
The service plan must be subject to the approval of the Medicaid agency. Appendix D-1
describes how this is accomplished. This requirement does not necessarily mean that the
Medicaid agency must review and approve each and every service plan, either before it goes
into effect or on a retrospective basis. Often, this requirement is met by the Medicaid
agency’s retrospectively reviewing a sample of service plans.

Item 6-B: Inpatients
42 CFR §441.301(b)(1)(ii) provides that waiver services may not be furnished to individuals who
are in-patients of a hospital, nursing facility or ICF/IID. FFP is not available for waiver services
while the person is in a hospital, nursing facility or ICF/IID except for temporary short-term respite
services delivered in an institution, and personal assistance retainer payments, as described
Olmstead Letter #3 (see Attachment D to the Instructions). So that waiver participants may
continue to receive services in the most integrated setting appropriate to their needs, CMS permits
the continued payment to personal assistants under the waiver while a person is hospitalized or
absent from his or her home. If a state chooses to make such payments, it must clearly indicate this
in the service specifications in Appendix C-3 for the personal assistance service where retainer
payments will be made.
States that elect to make personal assistance retainer payments must also specify the limits that
will be applied to this service. The personal assistance retainer time limit may not exceed the lesser
of 30 consecutive days or the number of days for which the state authorizes a similar payment in
nursing facilities.
The institutionalization of a waiver participant does not dictate that the person must be
terminated from the waiver. A state may provide for the continuation of the person on the waiver
by reserving or holding a waiver opening for the person.
Under certain circumstances, a state may arrange for the provision of some services (e.g., home
modifications) in advance of the transition of institutionalized persons to the community in order
to ensure the continuity of care for these individuals. These circumstances and the types of services
that may be arranged in advance of transition to the community are discussed in more detail in the
instructions for Appendix C.
Item 6-C: Room and Board
FFP may not be claimed for the cost of room and board except in certain circumstances. The term
“room” means shelter type expenses, including all property-related costs such as rental or purchase

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of real estate and furnishings, maintenance, utilities, and related administrative services. The term
“board” means three meals a day or any other full nutritional regimen.
As provided in 42 CFR §441.310(a)(2), room and board may be claimed for temporary short-term
respite services that are furnished in settings that are not the participant’s own private residences
and a state may elect to pay the portion of the rent and food that can be attributed to a live-in
caregiver who furnishes services to a participant in the participant’s private residence. In
Appendix I, a state describes how it excludes the cost of room and board from its claim for federal
financial participation in the costs of waiver services. When a state elects to pay for the portion of
rent and food that can be attributed to a live-in caregiver, it includes “live-in caregiver” as a
covered waiver service in Appendix C and describes how it determines the amount that is paid for
the rent and food that is attributable to the live-in caregiver in Appendix I.
A state may claim FFP for the costs of meals that are furnished as part of a program of adult day
health or a similar activity conducted outside the participant’s living arrangement on a partial day
basis. A waiver may also cover “meals on wheels” (or similar) services that provide one meal
each day to waiver participants who live in their own private residence.
Item 6-D: Access to Services
Any service that is offered in a waiver must be available to every waiver participant who requires
the service as provided in the specifications for each service in Appendix C-3. In Appendix C-3,
a state may establish limits on the amount, duration and scope of each service. However, as
provided in CMS Olmstead Letter #4 (see Attachment D), a state may not limit the number of
waiver participants who may receive a particular waiver service, nor may a state deny a needed
waiver service due to the lack of funds.
In addition, a state may not limit a group of waiver participants to receiving a pre-defined package
of waiver benefits by preventing members of the group from accessing other services offered under
the waiver. This means that a state may not operate what amounts to a “waiver within a waiver.”
In short, waiver services must be available on a comparable basis to all waiver participants who
have been assessed as needing the services. When a state wishes to offer different benefits to
specific groups of individuals, it should apply to operate distinct waivers for each group.
Item 6-E: Free Choice of Provider
HCBS waivers must comply with §1902(a)(23) of the Act and 42 CFR §431.51 which require that
Medicaid beneficiaries must be allowed to obtain services from any willing and qualified provider
of a service. A willing provider is a provider who agrees to accept a state’s payment as payment
in full for rendering a service and to abide by all other Medicaid provider requirements, including
executing a provider agreement. A qualified waiver provider means an individual or entity that
meets the qualifications that are specified in Appendix C-3 for the service that the provider renders.
All qualified providers must be permitted to participate in the waiver program and have a provider
agreement with the Medicaid agency if they chose to do so unless a state has secured a waiver of
§1902(a)(23) to place restrictions on providers (e.g., by requesting a waiver under the §1915(b)(4)
authority).

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Item 6-F: FFP Limitation
In accordance with 42 CFR §433 Subpart D, FFP may not be claimed for services when another
third party (e.g., other third-party health insurer or other federal or state program) is legally liable
and responsible for the provision and payment of the service. This requirement applies to all
Medicaid services, including waiver services. The Medicaid program functions as the payer of
last resort.
§1903(c) of the Act provides an exception to the principle that Medicaid is the payor of last resort
in the case of Medicaid-reimbursable services that are included in a child’s Individual Education
Plan (IEP) under the provisions of the Individuals with Disabilities Education Improvement Act
of 2004 (IDEA). However, this exception only applies to those services that also are reimbursable
under the Medicaid state plan (including services required under EPSDT). This exception does
not apply to waiver services.
Item 6-G: Fair Hearing
Waiver participants (like other Medicaid beneficiaries) must have the opportunity to request a Fair
Hearing in order to seek a reconsideration of certain types of decisions that affect their eligibility
or their services. How this opportunity is provided is described in Appendix F.
Item 6-H: Quality Improvement
This item establishes that a state must have an on-going, continuous system to ensure that the
waiver assurances and other requirements are met when the waiver is in effect. This system is
described in the Quality Improvement Strategy contained throughout the Appendices in the
document, in Appendix H and in other elements of the application (e.g., Appendix G: Participant
Safeguards).
Item 6-I: Public Input
Instructions

In the text field, describe how public input into the development of the new waiver, waiver
renewal, or waiver amendment was secured.
Technical Guidance
CMS requires states to obtain public input during the development of a waiver (or a waiver renewal
or a waiver amendment with substantive changes) in accordance with 42 CFR 441.304(f). The
public input process must be described fully and be sufficient in light of the scope of the changes
proposed, to ensure meaningful opportunities for input for individuals served or eligible to be
served in the waiver. For the public input process to be sufficient in light of the scope of the
changes proposed, the state must share with the public the entire waiver. In addition, the state’s
public input process must have included at least two (2) statements of public notice and public
input procedures, with at least one being web-based AND at least one being non-electronic to
ensure that individuals without computer access have the opportunity to provide input. This state
must provide at least a 30-day public notice and comment period and be completed prior to
submission of the proposed change to CMS. The state’s response to this item in the waiver
application must include a summary of the public comments received during the public input
process, and if any comments were not adopted, the reasons why. The state must also specify in

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their summary any modifications to the waiver that they made as a result of the public input
process.
CMS Review Criteria
For new waivers, and renewals and amendments with substantive changes:
•
•
•
•
•
•

Did the state fully describe the public input process?
Was the public input process at least a 30-day period, and was it completed prior to the
waiver submission to CMS?
Did the state provide at least two (2) statements of public notice and public input
procedures? Was one of them web-based?
Did the state include a summary of the public comments that the state received during the
public input process, reasons why any comments were not adopted, and any modifications
to the waiver that they made as a result of the public input process?
Did the state’s posting include the entire waiver? For new waivers, was the public input
process sufficient?
For renewals and amendments with substantive changes, was the public input process
sufficient in light of the scope of the proposed changes in the waiver submission?

Item 6-J: Notice to Tribal Governments
Instructions
In the text field, describe how federally recognized tribes were consulted.

Technical Guidance
Section 1902(a)(73) of the Act requires states to seek advice from all Indian health providers and
urban Indian organizations in the state prior to submitting state plan amendments or waiver
requests that may have a direct impact on Indians or Indian health providers. States that have these
providers have submitted a SPA outlining the process for seeking advice that they state will follow
prior to submitting SPAs or waiver requests, renewals, amendments or extensions. In some cases,
the aforementioned SPAs outlined a process for consultation with tribal governments as well as
seeking advice from Indian health and Urban Indian organizations. In addition to the requirement
to seek advice from Indian health providers and urban Indian organizations, States must consult
with federally recognized Indian Tribes that maintain a primary office and/or majority population
within the state of intent to submit a Medicaid waiver request, including a request for a waiver
renewal. If a state has outlined the process for consulting with tribal governments in the
aforementioned SPA, that process should be followed. If they have not included tribal consultation
in the SPA, the notice to tribal governments must be sent at least 60-days in advance of submitting
the request, allowing the tribe(s) at least 30 days to respond. Please see State Medicaid Director
Letter #01-024 (July 17, 2001), Attachment C, for more information about meeting this
requirement. Evidence documenting the process for seeking advice from Indian health providers
and urban Indian organizations, as well as documentation that the state fulfilled the tribal
government consultation process must be readily available through the state Medicaid agency.

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Item 6-K: Limited English Proficient Persons
As in the case of other Medicaid services, a state must provide meaningful access to a waiver by
Limited English Proficient persons. How this access is provided with respect to the waiver is
described in Appendix B-8 of the waiver application.

7. Contact Person(s)

Item 7-A: State Medicaid Agency Representative

Instructions
Provide the name and other contact information of the individual at the Medicaid agency with
whom CMS should communicate regarding the waiver.
Technical Guidance
The individual identified should be familiar with the waiver and be able to respond to CMS
questions concerning the application. A Medicaid agency contact must be identified even though
the waiver is operated by another agency. CMS directs its communications regarding a waiver
request to the Medicaid agency. The information provided here also is entered into a CMS database
that is used to distribute information to states regarding waivers.

Item 7-B: Operating Agency Representative
Instructions
When a waiver is operated by a state agency that is not part of the Medicaid agency (as provided
in Appendix A of the application), provide the name and other contact information of an individual
at the operating agency who should be included in CMS communications concerning the waiver.
Technical Guidance
While the first line of communication between CMS and a state regarding a waiver application is
the through Medicaid agency, CMS recognizes that many waivers are developed and operated by
other state agencies in collaboration with the Medicaid agency. Consequently, it is important for
the Medicaid agency to also directly involve operating agency representatives in discussions
concerning the waiver application.

8. Authorizing Signature

Instructions
When the web-based application is used, the application is signed electronically when the State
Medicaid Director or designee submits the application using the submission feature that is
reserved only for the use of the Director.
Technical Guidance
All new waiver and waiver renewal applications (as well as amendments) must be submitted to
CMS by the Medicaid agency. Therefore, the State Medicaid Director or designee in the Medicaid
agency must sign the application.
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The State Medicaid Director’s signature certifies that the state will abide by all the provisions of
the waiver application and that the waiver will be operated to continuously meet the assurances
and other requirements that are spelled out in the application.
CMS Review Criteria
The waiver application has been signed by the State Medicaid Director or designee.

Attachments (if applicable)
Attachment #1: Changes from Previous Approved Waiver That May Require a Transition Plan (if
applicable)
Instructions: If applicable, check the box next to any of the following changes from the current
approved waiver that you are making with this application. Check all of the boxes that apply. If
you check any of the boxes, you will be prompted to complete a transition plan.
Replacing an approved waiver with this waiver.
Combining waivers.
Splitting one waiver into two waivers.
Eliminating a service.
Adding or decreasing an individual cost limit pertaining to eligibility
Adding or decreasing limits to a service or a set of services, as specified in Appendix C
Reducing the unduplicated count of participants (Factor C).
Adding new, or decreasing, a limitation on the number of participants served at any point
in time.
□ Making any changes that could result in some participants losing eligibility or being
transferred to another waiver under 1915(c) or another Medicaid authority.
□ Making any changes that could result in reduced services to participants.
□
□
□
□
□
□
□
□

Technical Guidance
Instructions

When required, submit the transition plan for the waiver as Attachment #1.

Technical Guidance
A transition plan must accompany a waiver application whenever individuals who participate in
an approved waiver might be adversely affected when a new replacement waiver takes effect, or a
renewal or amendment includes certain types of changes in the approved waiver. A transition plan
must accompany the waiver application or amendment in the following circumstances:
•
•

A new waiver replaces an approved waiver;
The waiver renewal or amendment would eliminate or limit any of the services that are
furnished under the approved waiver;

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•
•

•
•

The waiver renewal or amendment would result in some participants who are served in the
approved waiver losing eligibility or necessitate the transfer of some participants to another
waiver;
The waiver renewal or amendment includes major changes that would affect the amount of
services that are furnished to waiver participants under the approved waiver (e.g., the renewal
or amendment includes an individual cost limit that is new/lower than the approved waiver
or the renewed waiver would impose limits on the overall dollar amount of services that may
be authorized in participant service plans;
Two waivers are being combined; or,
A waiver is being split into two separate waivers.

As applicable, the transition plan should address the following topics:
•
•
•
•
•

•

•

Similarities and differences between the services covered in the approved waiver and those
that will be covered in the new waiver or the renewed/amended waiver;
When some services in the approved waiver will not be available through the new or
renewed/amended waiver or will be available in lesser amounts, describe how the health and
welfare of persons who receive the services that are terminated will be assured;
When the new or renewed/amended waiver includes limitations on the amount of waiver
services that were not included in the approved waiver, how the limitations will be
implemented;
Whether individuals served in the approved waiver also will be eligible to participate in the
new or renewed/amended waiver;
If some persons served in the approved waiver will not be eligible to participate in the new
or renewed/amended waiver, describe the steps that the state will take to facilitate the
transition of affected individuals to alternate services and supports. Such alternatives may
include their timely transition to another HCBS waiver for which they may qualify and
assisting them to access other services (including services under the state plan) that may meet
their needs;
The timetable for transitioning individuals to the new waiver (i.e., will participants in the
existing waiver transition to the new waiver at the same time or will the transition be phased
in (e.g., individuals will transition when their service plan is reviewed or their level of care
is re-evaluated)?).
How and when participants will be notified of the changes.

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CMS Review Criteria
The transition plan:
•
•
•
•
•

•
•

Describes the similarities and differences between the services covered in the approved
waiver and those covered in the new or renewed/amended waiver.
When services in the approved waiver will not be offered in the new or renewed/amended
waiver or will be offered in lesser amount, describes how the health and welfare of persons
who receive services through the approved waiver will be assured.
States whether persons served in the existing waiver also are eligible to participate in the
new waiver.
When the new or renewed/amended waiver includes limitations on the amount of waiver
services that were not included in the approved waiver, the plan describes how the
limitations will be implemented.
When persons served in the approved waiver will not be eligible to participate in the new
or renewed/amended waiver, the plan describes the steps that the state will take to
facilitate the transition of affected individuals to alternate services and supports that will
enable the individual to remain in the community.
Includes the timetable for transitioning individuals to the new waiver (i.e., will
participants in the existing waiver transition to the new waiver all at the same time or will
the transition be phased in?).
Describes how the participant is notified of the changes and informed of the opportunity
to request a Fair Hearing.

Appendix A: Waiver Administration and
Operation

Brief Overview

This appendix identifies the state agency that is responsible for the day-to-day waiver
administration and operation, other contracted entities that perform waiver operational functions,
and, if applicable, local/regional entities that have waiver administrative responsibilities. The
Appendix also provides for indicating how specific waiver operational functions and activities are
distributed among state, local/regional and other entities and how the state Medicaid agency
monitors performance of those functions.

Requirements: Waiver Administration and Operation

The administration and operation of waivers frequently involves the collaboration of the Medicaid
agency and other state agencies. In addition, the operation of waivers is often decentralized, and
local agencies play important roles in facilitating the access of individuals to the waiver, including
performing waiver operational functions. CMS recognizes that it may be efficient and effective
for a state to locate the operation of a waiver with an agency other than the Medicaid agency and
link the delivery of waiver services to other federal, state and local programs. Appendix A
describes the administrative structure under which the waiver is operated. When waiver

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administrative and operational functions are performed by other entities on behalf of the Medicaid
agency, certain requirements must be met.
In accordance with 42 CFR §431.10, the Medicaid agency is responsible for ensuring that a waiver
is operated in accordance with applicable federal regulations and the provisions of the waiver itself.
The Medicaid agency may not delegate its authority over a waiver to another entity. When the
Medicaid agency delegates to another agency, provided that the other state agency and the
Medicaid agency enter into an agreement that specifies the waiver administrative and operational
activities and functions that the other agency performs as delegated and under the supervision of
the Medicaid agency. In the application, when a waiver is operated by another state agency, the
sister agency is referred to as the “operating agency.”
The state Medicaid agency may be an umbrella agency with numerous divisions, units or
administrations within its domain. When a division, unit or administration within the umbrella
state Medicaid agency conducts waiver administrative activities, the state must describe the
methods enlisted by the State Medicaid Director to provide oversight and guidance related to those
activities. These mechanisms may include performance plans of direct reports, internal delegation
documents or other formal mechanisms that impart delegated functions from the State Medicaid
Director to a division within the broader Medicaid agency.
The requirement that the Medicaid agency maintain its authority over the waiver means that any
rules, regulations and policies that govern how the waiver is operated must be issued by the
Medicaid agency rather than by the operating agency. In issuing rules, regulations and policies
that affect the waiver, the Medicaid agency may incorporate by reference rules, regulations and
policies that have been adopted by the operating agency (or another state agency – e.g., rules and
regulations concerning provider qualifications). In short, the operating agency may not
independently promulgate rules, regulations and policies that have a material effect on the
provision of waiver services and how waiver processes are conducted. Policies and other types of
guidance concerning waiver operations may be issued jointly by the Medicaid agency and the
operating agency. Alternatively, the Medicaid agency may formally approve policies and
guidance developed and issued by the operating agency.
A state also may arrange for the performance of waiver operational and administrative functions
by contracted entities. For example, the Medicaid agency or the operating agency (if applicable)
may enter into a contract with a private entity to conduct quality improvement functions (e.g.,
conduct periodic surveys of waiver participants) that are necessary for the proper and efficient
administration of the waiver. Such contractual arrangements are subject to the provisions of 42
CFR Part 434 (contracts) or such other federal regulations as may apply (e.g., the procurement
regulations in 45 CFR § 92.42).
Finally, a state also may provide that local/regional non-state entities perform waiver operational
and administrative functions in order to link the provision of waiver services with other federal,
state and local programs that are operated by such entities. Such entities may include public county
human services agencies or other types of local human services agencies (e.g., Area Agencies on
Aging – AAAs). For example, a state may provide that entrance to a waiver that serves older

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persons takes place through the state’s AAA network in order to link the provision of waiver
services to Older Americans Act programs and services. When local/regional non-state entities
perform waiver operational and administrative function, there must be contracts or agreements in
place that authorize the performance of such functions by local/regional non-state entities, and the
state must monitor performance of those functions.
42 CFR§431.10(e) specifies that the Medicaid agency must retain the authority to exercise
administrative discretion and issue policies, rules and regulations. If other state or local agencies
or contractors perform waiver administrative and operational functions for the Medicaid agency,
such entities must not have the authority to change or disapprove any administrative decision of
the Medicaid agency or otherwise substitute their judgment for that of the Medicaid agency with
respect to the application of policies, rules, and regulations issued by the Medicaid agency.
Provider agreements must be executed between the Medicaid agency and the providers.
With respect to HCBS waivers, a state must provide for the consistent, uniform administration and
operation of the waiver across all geographic areas where the waiver is in operation. For example,
when local/regional non-state agencies perform waiver administrative and operational functions,
the state must ensure that consistent decisions are made about the authorization of waiver services
wherever a waiver participant may reside. As previously noted in the instructions for the
Application/Module 1, if the state wishes to provide different services or utilize different
approaches to service delivery in different parts of the state, the state should consider applying to
operate separate waivers in each area of the state. Absent a waiver of statewideness, it is expected
that the waiver will be administered and operated in a consistent fashion in all parts of the state
and, thereby, ensure that waiver services are provided on a comparable basis to the entire target
group of waiver participants in compliance with 42 CFR §440.240(b) (comparability of services
for groups).
When waiver administrative and operational functions are performed by other entities on behalf
of the Medicaid agency, the Medicaid agency should have a formal, written document expressly
delegating the functions to be performed, and the Medicaid agency must supervise the performance
of these functions. Supervision does not mean that the Medicaid agency must review and approve
each and every action taken by another entity. It is expected that the Medicaid agency will conduct
or arrange for the periodic assessment of the performance of other entities in conducting waiver
administrative and operational activities to ensure that the waiver is operated in accordance with
the approved waiver and applicable federal requirements. In its Quality Improvement Strategy for
the waiver, the state describes how it will assure that the “Medicaid agency retains ultimate
authority and responsibility for the operation of the waiver by exercising oversight over the
performance of waiver functions by other state and local agencies (if applicable) and contracted
entities.”

Detailed Instructions for Completing Appendix A
Item A-1: State Line of Authority for Waiver Operation
Instructions

Select whether the waiver is operated by the Medicaid agency or by another state agency. When
the waiver is operated by the Medicaid agency, specify whether it is operated by the Medical
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Assistance Unit or another division/unit within the Medicaid agency. When the waiver is operated
by another state agency, specify the state agency and complete Item A-2.
Technical Guidance

This item identifies the state agency that has day-by-day administrative and operational
responsibility for the waiver. The waiver may be operated by the Medicaid agency or another state
agency under an agreement with the Medicaid agency. The Medicaid agency is the single state
agency designated in accordance with 42 CFR §431.10(b)(1) to administer or supervise the state
plan. The medical assistance unit is the unit within the Medicaid agency that is established
pursuant to 42 CFR §431.11(b) and in some states is synonymous with the Medicaid agency. In
some states, the Medicaid agency is a state department/agency rather than a division/unit within a
state department/agency. When this is the case, the state Medicaid agency may delegate the
operation of the waiver to another division/unit within the umbrella Medicaid agency or assign
this responsibility to its Medical Assistance Unit. When a division/unit other than the Medical
Assistance Unit is responsible for operating the waiver, the waiver is considered to be operated by
the Medicaid Agency.
In responding to this item, specify whether the waiver is operated by the Medical Assistance Unit
or another Medicaid agency division/unit. The state Medicaid agency may be an umbrella agency
with numerous divisions, units or administrations within its domain. When a division, unit or
administration within the umbrella state Medicaid agency conducts waiver administrative
activities, the state must describe the methods enlisted by the State Medicaid Director to provide
oversight and guidance related to those activities. These mechanisms for oversight may include
performance plans of direct reports, internal delegation documents or other formal mechanisms
that impart delegated functions from the State Medicaid Director to a division within the broader
Medicaid agency. If the waiver is operated by a division, unit, or administration within the
Medicaid agency that differs from the Medical Assistance Unit, complete Item A-2-a.
Alternatively, a waiver may be operated by another state agency that is not the Medicaid agency.
This practice is relatively common. States frequently locate waiver operational responsibility with
a state agency that has programmatic and other responsibilities for the full range of services
(including services funded by state and/or federal funds other than Medicaid) that are furnished to
a target population (e.g., older persons). The other state agency may be located in the same
department as the Medicaid agency but is not organizationally a part of the Medicaid agency or
located in a different state department.
When the waiver is not operated by a division/unit of the Medicaid agency, there must be a formal,
written agreement between the Medicaid agency and the operating agency that explicitly spells out
the waiver activities and functions that the operating agency performs on behalf of the Medicaid
agency. This agreement may take the form of an interagency agreement or a memorandum of
understanding. Do not submit the agreement as part of the waiver application. If CMS needs to
examine the agreement, it will request a copy from the Medicaid agency.
There are no established specifications for these agreements. An agreement, however, must be
sufficiently detailed so that it clearly delineates those activities, functions and responsibilities that

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the Medicaid agency delegates to the operating agency and the responsibilities of the operating
agency in carrying out those functions. The agreement need not be confined solely to the operation
of the waiver (e.g., it may address additional topics as well) and an agreement may span the
operation of more than one waiver so long as operating agency responsibilities for each waiver are
clearly delineated. The agreement may not undermine the ultimate authority and responsibility of
the Medicaid agency for the operation of the waiver, including meeting the waiver assurances.
The agreement also may serve as the basis for claiming administrative FFP for the proper and
necessary costs that are incurred by the operating agency in administering the waiver. Medicaid
administrative claiming, necessary for the efficient administration of the Medicaid state plan, must
be in accordance with the state’s CMS-approved Medicaid cost allocation plan. Please note that
approval of this waiver application does not constitute approval of the state’s Medicaid cost
allocation plan.

Item A-2: Medicaid Agency Oversight of Waiver Administration

Item A-2-a: Operation by a Division/Unit within the SMA other than the Medical Assistance Unit.
Instructions

This item is only completed when a division/unit (or administration) within the umbrella state
Medicaid agency, other than the Medical Assistance Unit operates the waver. In the text field,
specify the methods employed by the State Medicaid Director (in some instances, the individual
is also the head of the umbrella state agency) to provide oversight and guidance related to those
activities. These mechanisms for oversight may include performance plans of direct reports,
internal delegation documents or other formal mechanisms that impart delegated functions from
the State Medicaid Director to a division within the broader Medicaid agency.
When the waiver is operated by another division/unit/administration within the umbrella Agency
designated as the single state Medicaid agency. Specify (a) the functions performed by that
division/administration (i.e., the Developmental Disabilities Administration within the single state
Medicaid agency), (b) the name and most recent execution date of the document utilized to outline
the roles and responsibilities related to waiver operation, and (c) the methods that are employed
by the designated State Medicaid Director in the oversight of these activities.
Technical Guidance

As noted above, when the waiver is operated by a division/unit/administration of the Medicaid
agency that is outside of the Medical Assistance Unit or the division responsible for Medicaid
administration, the state must ensure that this division is performing its assigned waiver
operational tasks and administrative functions in accordance with waiver requirements. States
(and State Medicaid Directors) have discretion to establish these mechanisms, which will vary
depending on the umbrella state Medicaid agency (SMA) structure and internal reporting systems.
When the waiver is administered by an entity within the SMA other than the Medical Assistance
Unit, it is considered for the purpose of this application to be operated by the SMA. However,
there should be a clear line of reporting between the Medical Assistance Unit and the operating
entity within the SMA, and the Medical Assistance Unit must oversee the operations of the entity
in administering the waiver to ensure compliance with federal requirements.

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Item A-2-b: Operation by a non-SMA State Entity
Instructions

This item is only completed when a state entity that is NOT the state Medicaid agency operates
the waiver. In the text field, specify the methods that the Medicaid agency uses to ensure that the
operating agency performs its assigned waiver operational and administrative functions in
accordance with waiver requirements. Also, specify the frequency of Medicaid agency assessment
of operating agency performance.
Technical Guidance

As noted above, when a waiver is not operated by the Medicaid agency, the Medicaid agency must
ensure that the operating agency performs its assigned waiver operational and administrative
functions in accordance with waiver requirements. States have discretion in determining Medicaid
agency oversight methods. The methods employed will hinge on the specific scope and nature of
the functions and activities that the operating agency performs. These will include the functions
and activities indicated in Item A-3 (see next section) and others specified elsewhere in the
application. It is important to keep in mind that Medicaid agency oversight need not take the form
of the Medicaid agency reviewing and approving each operating agency action (e.g., reviewing all
the service plans that the operating agency already has reviewed) or the redundant performance of
functions and activities that are carried out by the operating agency (e.g., replicating look-behind
type reviews of case manager performance when the operating agency already conducts such
reviews). Medicaid agency oversight may be exercised in a variety of ways, including providing
that the operating agency track and periodically report to the Medicaid agency its performance in
conducting operational functions (e.g., reporting how promptly service plans are developed and
implemented once a participant has entered the waiver).
It is important to emphasize that the state Medicaid agency and the operating agency should work
together to ensure that the waiver is operated in accordance with Medicaid rules, and that the
services delivered are appropriate for the populations served. The knowledge of Medicaid
requirements and the requisite program knowledge often contained within the operating agency
represent the need for a strong collaborative relationship in the operation of the waiver. The
Medicaid agency retains ultimate authority and control over the waiver, but in order to effectuate
a strong, Medicaid compliant service delivery mechanism, the state should establish clear and
strong lines of communication between the operating agency and the state Medicaid agency.
As noted previously, the state’s Quality Improvement Strategy must describe how the state assures
that the Medicaid agency maintains its authority over the waiver. Oversight of operating agency
performance is an element of this assurance. As applicable, the oversight methods described here
must be cited in the QIS section related to the Administrative Authority of the state Medicaid
agency.
When the waiver is not operated by the Medicaid agency, the state must specify the functions that
are expressly delegated through a memorandum of understanding (MOU) or other written
documents that and should indicate the frequency of review and update for the document. Please
note the MOU or agreement must be in place prior to the implementation of the waiver. In

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addition, The MOU or agreement must reflect roles and responsibilities of the waiver as it is
currently being operated.
CMS Review Criteria
• The Medicaid agency’s oversight methods span the full range of operational and
administrative responsibilities of the division/unit/administration within the Medicaid
agency and the operating agency including its oversight of contracted and local/regional
entities’ functions as specified in Item A-3 and elsewhere in the application.
• The frequency of oversight is specified.

Waiver Operational and Administrative Functions

Items A-3 and A-4 require identifying whether contracted entities and/or local/regional non-state
entities perform waiver operational and administrative functions. Item A-7 lists specific functions
that such entities might perform. The response to Items A-3 and A-4 hinges on whether contracted
entities or local/regional non-state entities perform one or more of the functions listed in Item A7. Please note that the Financial Management Service (FMS) may be provided as a Medicaid
administrative activity or as a waiver service. When provided as an administrative activity, FMS
serves as an example of an entity that could perform a function listed in A-3.
The list in Item A-7 is not inclusive of all waiver operational and administrative functions. The
list generally does not include functions that are addressed elsewhere in the application (e.g., the
performance of case management activities such as monitoring service plan implementation
(addressed in Appendix D-2).
The operational and administrative functions listed in Item A-7 are defined as follows:
•

Participant waiver enrollment. This function includes performing waiver intake activities,
including taking applications to enter the waiver and referring, when necessary, individuals
for the determination of Medicaid eligibility and/or disability.

•

Waiver enrollment managed against approved limits. This function includes ensuring that
the waiver’s participant limit (as provided in Appendix B-3) is not exceeded and managing
entrance to the waiver by applying the state’s policies concerning the selection of individuals
to enter the waiver (as also provided in Appendix B-3). The function also might include
establishing and maintaining a waiting list for entrance to waiver, if necessary. When waiver
capacity is allocated by locality or region, local/regional non-state agencies may also be
involved in managing enrollment.

•

Waiver expenditures managed against approved levels. This function includes monitoring
waiver expenditures to assure that the waiver is cost neutral and operates within the estimates
in the approved waiver (and, as necessary, preparing waiver amendments to modify cost
estimates). Usually, this function is performed by a state agency.

•

Level of care evaluation. Such activities may include compiling the information that is
necessary to evaluate potential entrants to the waiver and the continuing need for the level of
care that the waiver provides for waiver participants. It may also include the review of such
information by the state or a contracted entity in order to determine that an individual meets
level of care criteria. However, if the LOC evaluation results in Title XIX eligibility, the
final decision must be a Medicaid agency decision since only the Medicaid Agency can make

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an eligibility decision. Thus, another agency in the state can conduct the evaluations, but only
the Medicaid agency can make the final decision.
•

Review of participant service plans. This activity may include local/regional entity review
of service plans or, if required by the state, the review and approval of service plans by the
Medicaid agency or the operating agency (if applicable). The focus is on activities that take
place once a service plan has been developed but prior to its implementation. The function
does not include the retrospective review of service plans that might be conducted by the
Medicaid agency in order to (a) meet the requirement that service plans are subject to the
approval of the Medicaid agency (as provided in Appendix D-1) or (b) determine
retrospectively whether service plans appropriately address the needs of waiver participants,
a quality improvement activity that is addressed in the state’s QIS.

•

Prior authorization of waiver services. This function refers to the review of the necessity
of specific waiver services before they are authorized or delivered. It does not refer to review
of the overall service plan. For example, a waiver might provide for the provision of crisis
stabilization services under certain circumstances but require that the provision of such
services be reviewed prior to their authorization. Alternatively, a waiver might provide that
additional services may be authorized over and above the limit on the dollar amount
established in Appendix C-4 of the waiver but require prior authorization for such services.

•

Utilization management. Utilization management includes processes to ensure that waiver
services have been authorized in conformance to waiver requirements and monitoring service
utilization to ensure that the amount of services is within the levels authorized in the service
plan or that services utilized have been authorized in the service plan. It also may include
identifying instances when individuals are not receiving services authorized in the service
plan or the amount of services utilized is substantially less than the amount authorized to
identify potential problems in service access.

•

Qualified Provider enrollment. Qualified provider enrollment refers to the performance of
standard provider enrollment processes conducted by the state Medicaid Agency, as well as
any delegated functions related to the recruitment and enrollment of providers.

•

Execution of Medicaid provider agreements. §1902(a)(27) of the Act and 42 CFR §107
require that there be an agreement between the Medicaid agency and each provider that
furnishes services under the waiver. In some instances (e.g., when a state contracts with an
Organized Health Care Delivery System (OHCDS) to furnish waiver services), the provider
agreement is executed with an organization that contracts with other providers to furnish
waiver services, but these providers do not have an agreement with the Medicaid agency.
Except in these cases (which are discussed where applicable elsewhere in the instructions),
there must be a provider agreement between the Medicaid agency and each waiver provider.
Such agreements may be multi-party agreements (e.g., the agreement may be made by the
Medicaid agency, the operating agency and the provider).
The Medicaid agency may assign to another entity (e.g., the operating agency, a county
agency, or a financial management services entity that supports waiver participants to direct
their own services) the responsibility to execute (sign) the provider agreement on behalf of
the Medicaid agency. If the Medicaid agency chooses to assign this administrative function
to another entity, the Medicaid agency must assign this responsibility in writing to the
entity. For example, if counties are authorized to execute the state’s provider agreement on
behalf of the Medicaid agency, the authorization may be included in the agreement between
a county and the Medicaid agency to perform waiver operational and administrative
functions. However, the Medicaid agency cannot delegate its statutory responsibilities for

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oversight and standard setting. In carrying out this administrative responsibility, the entity
that executes the provider agreement may not alter or supplement the provisions of the
agreement. If the entity to which this administrative function is assigned also provides
waiver services to participants, it must execute a provider agreement directly with the
Medicaid agency – not itself – for services that the entity provides.
•

Establishment of Statewide Rate Methodology. A state must have uniform and consistently
applied policies concerning the determination of waiver payment amounts or rates. This topic
is addressed in more detail in the instructions for Appendix I-2. When this function is
performed by entities other than the Medicaid agency, the entity must follow the state’s
uniform policies.

•

Rules, policies procedures and information development governing the waiver program.
This function includes the development of any rules, policies and procedures that govern
administration of the waiver. While other entities may be involved in the development of
these items, the state Medicaid agency must retain ultimate approval authority and they must
be consistent in all jurisdictions in which the waiver operates. This function may also include
making information about the waiver available via the Internet, performing outreach through
such organizations as AAAs and consumer support groups, identifying potential enrollees
through the operation of a single-point-of-entry or “no wrong door” service access point, and
providing individuals with information about the waiver.

•

Quality assurance and quality improvement activities. This function refers to the
activities related to discovery and remediation activities conducted for the waiver, as well as
the mechanisms for overall systems improvement.

Item A-3: Use of Contracted Entities
Instructions
Based on the listing of waiver operational and administrative functions in Item A-7 (as described
above), indicate whether contracted entities perform one or more of those activities. If so, identify
(in the text field) the types of contracted entities and briefly describe the functions that they
perform. Also, complete Items A-5 and A-6. When contracted entities do not perform any of the
functions listed in Item A-7, select the second choice.
Technical Guidance
Waiver operational activities and functions may be performed by entities that are under contract
with the Medicaid agency or the operating agency (if applicable). For the purpose of this item,
contracted entities are third parties that perform functions that are otherwise usually conducted by
the state agency. In the context of this item, contracted entities do not include waiver providers or
local/regional non-state entities (e.g., counties). In the case of the latter, their role in waiver
operations is addressed in items A-4 through A-6 and in item A-7. For example, the evaluation of
level of care often is conducted by a Professional Review Organization (PRO) under contract to
the Medicaid agency. Other examples of administrative activities and functions that might be
performed by a contracted entity include utilization management, prior authorization of selected
services, and the determination of provider rates using the methodology developed by the
Medicaid agency. As applicable, contracted entities may include entities that furnish financial
management services under an administrative contract to waiver participants who direct their
services. When using contracted entities to perform waiver operational activities, the state

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Medicaid agency should expressly delegate the performance of these activities in writing and
oversee the performance of these functions.
Since multiple contractors might perform waiver operational and administrative functions,
describe the types of contracted entities that perform these functions (e.g., a PRO, the state’s
Medicaid fiscal agent, a consumer organization). Do not identify by name the specific entity that
performs a function (because if a different contractor is selected to perform a function during the
period that the waiver is in effect, an amendment would have to be submitted to modify this item).
Also, because multiple contractors might be employed, briefly describe the functions that each
type of contractor performs.
§1915(c) Waivers that Operate with Concurrent Managed Care

When a §1915(c) waiver is operated concurrently with a Medicaid managed care authority, managed care
entities may perform several waiver operational and administrative functions in conjunction with their
delivery of services to beneficiaries. For example, such entities determine payment amounts for providers
in their networks and usually have responsibilities concerning enrollment of individuals. For the purpose
of the §1915(c) waiver application, managed care entities that perform the waiver operational and
administrative functions listed in Item A-7 are considered to be “contracted entities.” Therefore, identify
when managed care entities perform these functions and briefly list the functions that these entities perform.
Specify the types of entities (e.g., PIHP). Do not list the entities (the specific entities must be identified in
the Medicaid managed care authority application). As appropriate, include entities other than managed care
entities that may perform §1915(c) operational and administrative functions under the provisions of the
managed care authority (e.g., an External Quality Review Organization – ERQO).

CMS Review Criteria
When waiver operational and administrative activities are performed by contracted entities, the
waiver specifies the types of entities that perform such activities and describes the types of
activities that are performed by each type of entity.

Item A-4: Role of Local/Regional Non-State Entities
Instructions
Select whether public and/or non-governmental local/regional non-state entities perform waiver
operational and administrative functions. If so, specify the nature of these entities. When such
entities perform such functions, complete Items A-5 and A-6.
Technical Guidance
In many states, local/regional non-state entities (e.g., Area Agencies on Aging, county human
services agencies, regional mental health/developmental disabilities authorities) play important
roles in the provision of services and supports for individuals who need long-term services and
supports. These entities often are established under the provisions of state law and have
responsibilities for intake, service coordination and resource development. Some states also assign
waiver operational and administrative responsibilities to these non-state entities. For the purpose
of this item, local/regional non-state entities do not include local/regional offices of the Medicaid
agency or the operating agency (if applicable). Such offices are considered to be part of their
parent state agency.
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Before responding to this item, look over the list of activities and functions in item A-7. If
local/regional non-state entities do not perform any of those activities/functions, select the “not
applicable” choice and proceed to item A-7. If local/regional non-state entities perform any of the
listed functions, then complete this item and proceed to items A-5 and A-6.
The application identifies two types of local/regional non-state entities:
•

•

Public agencies. Public agencies include counties or other governmental entities that are
under the control of local elected officials. When public agencies are assigned waiver
administrative and operational responsibilities, there must be an interagency agreement,
memorandum of understanding or contract in effect that details their responsibilities. The
agreement may be between the Medicaid agency and each entity or may be a three-way
agreement among the Medicaid agency, the operating agency and each entity. The agreement
must preserve the authority of the Medicaid agency over the operation of the waiver.
Non-governmental entities. The second type of local non-state entity is a non-governmental
entity. Such entities include non-profit entities established under state and/or federal law to
conduct specified human services functions in a specified geographic area. Area Agencies
on Aging usually fall under this classification. In some states, there are non-profit, county or
multi-county developmental disabilities authorities that serve as the single point of entry for
state-funded services and conduct other specified activities. Other states have established
non-governmental regional authorities that include elected officials on their governing bodies
but are not considered to be governmental entities. When entities of this type perform waiver
operational and administrative functions, there must be a contract that details the waiver
operational functions that these entities perform. When the waiver is not operated by the
Medicaid agency, this contract may be structured as a three-party agreement (e.g., the
signatories to the contract are the non-governmental entity, the Medicaid agency, and the
operating agency).

When waiver operational responsibilities are carried out by these types of entities, select the
appropriate response for the type of entity and provide a brief description of the nature of these
entities (e.g., “non-profit developmental disabilities authorities that serve one or more counties
that are established under the provisions of the following state statutes _____”). This item permits
the selection of both types of entities if appropriate (e.g., waiver operational functions and
activities are carried out by both public and non-governmental agencies).
When using these types of entities to perform waiver operational activities, the state Medicaid
agency should expressly delegate the performance of these activities in writing.
• Do not include copies of contracts or agreements with local non-state entities when
submitting the application. However, such contracts or agreements must be readily
available to CMS upon request through the Medicaid agency or the operating agency (if
applicable).

Item A-5: Responsibility for Assessment of Performance of Contracted and/or
Local/Regional Non-State Entities
Instructions

This item is only completed when contracted entities (as indicated in Item A-3) and/or local/regional nonstate entities (as indicated in Item A-4) perform waiver operational and administrative functions. In the
text field, specify the state agency or agencies responsible for assessing the performance of local/regional
non-state entities in conducting waiver operational and administrative functions. When more than one state
agency is responsible for assessing performance, briefly describe the responsibilities of each agency.
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Technical Guidance

When contracted entities and/or local/regional non-state entities perform waiver operational and
administrative functions, the performance of such entities must be overseen and assessed by a state agency.
Assessment may be performed directly by the Medicaid agency and/or the operating agency (if applicable).
If the operating agency assesses the performance of these entities, this responsibility should be reflected in
the interagency agreement between the Medicaid agency and the operating agency.

Item A-6: Assessment Methods and Frequency
Instructions

Again, this item is only completed when contracted entities and/or local/regional non-state entities perform
waiver operational and administrative functions, as indicated in Items A-3 and/or A-4. In the text field,
describe the methods that are used to assess the performance of contracted and/or local/regional non-state
entities to ensure that they perform assigned waiver operational and administrative functions in accordance
with waiver requirements. Also specify how often performance is assessed.

Technical Guidance
When waiver operational and administrative functions are conducted by contracted entities and/or
local/regional non-state entities, there must be oversight of the performance of such entities to
ensure that waiver requirements are met. The type and scope of the oversight and performance
assessment will hinge on the nature of the functions that are performed by the local/regional nonstate entities. Potential methods may include conducting on-site operational reviews or
performance audits, periodic review of performance data, participant satisfaction surveys, focus
groups, or other methods. Also, specify the frequency with which oversight/performance
assessment is conducted. When oversight is performed by the operating agency, there must be
procedures for the operating agency to report performance assessment results to the Medicaid
agency and the performance of the operating agency in conducting such assessments must be
subject to oversight by the Medicaid agency.
In the case of §1915(c) waivers that operate concurrently with a Medicaid managed care authority,
the description of oversight methods may include cross-references to appropriate sections of the
Medicaid managed care authority application that address oversight of the performance of
managed care entities.
The Quality Improvement Strategy must describe how the state assures that the Medicaid agency
maintains its authority over the waiver. Oversight of the performance of contracted and/or
local/regional non-state entities is an element of this assurance. As applicable, the oversight
methods described here may be cited in the Quality Improvement Strategy rather than repeated.

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CMS Review Criteria
When local/regional non-state entities perform waiver operational and administrative
functions, the waiver describes:
•
•
•
•

The methods that are used to assess the performance of contracted and/or local/regional
non-state entities to ensure that they perform assigned waiver operational and
administrative functions in accordance with waiver requirements.
Oversight methods encompass each function that is performed by contracted entities or
local/regional non-state entities as specified in Item A-7.
The frequency with which such assessments are conducted.
If assessments are performed by the operating agency, the conduct of such assessment is
subject to review by the Medicaid agency to ensure that the operating agency is exercising
its responsibilities and there are procedures that provide for the reporting of assessment
results to the Medicaid agency.

Item A-7: Distribution of Waiver Operational and Administrative Functions
Instructions
In the table, check the entity or entities that have responsibility for conducting each of the waiver
operational and administrative functions that are listed. Ensure that Medicaid is checked when the
single state Medicaid agency (1) conducts the function directly; (2) supervises the delegated
function; and/or (3) establishes and/or approves policies related to the function. Note: More than
one box may be checked per item.
Technical Guidance
This table provides CMS with an overview of the distribution of responsibilities for conducting
selected waiver operational and administrative functions (as described above) among the entities
that have waiver operational and administrative roles. The columns in the table include the four
types of entities that may be involved in the operation of a waiver – the Medicaid agency, an
operating agency, contracted entities, and local/regional non-state authorities.
For each of the functions listed, indicate the entity or entities that have significant responsibilities
in performing or supervising a function. More than one type of entity may be involved in
performing a function. For example, local/regional non-state entities may conduct some activities
related to the evaluation of level of care and a contracted entity may be employed by the Medicaid
agency to make the determination that a person requires the level of care specified in the waiver.
CMS Review Criteria
• The entity or entities that have significant responsibilities in directly performing each of
the functions are indicated.
•

The SMA is checked when it (1) conducts the function directly; (2) supervises the delegated
function; and/or (3) establishes and/or approves polices related to the function.

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Quality Improvement: Administrative
Authority of the Single State Medicaid
Agency

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.

Instructions

The QIS must describe how the state Medicaid Agency retains ultimate authority for the operation
of the waiver program. This description must include:

•

•
•

Activities or processes that are related to discovery and remediation, i.e., review, assessment
or monitoring processes; who conducts the discovery or remediation activities and with what
frequency. These monitoring activities provide the foundation for quality improvement by
generating information regarding compliance, potential problems and individual corrective
actions. The information can be aggregated and analyzed to measure the overall system
performance in meeting the waiver assurances. The types of information used to measure
performance, should include relevant quality measures/indicators.
The entity or entities responsible for reviewing the results (data and information) of discovery
and remediation activities to determine whether the performance of the system reflects
compliance with the assurances; and,
The frequency at which system performance is measured.

Technical Guidance
Performance measures for administrative authority should not be duplicative measures found in
other appendices of the waiver application. As necessary and applicable, performance measures
should focus on:
 Uniformity of development /execution of provider agreements throughout out all
geographic areas covered by the Waiver
 Equitable distribution of waiver openings in all geographic areas covered by the
waiver
 Compliance with HCB settings requirements and other new regulatory components
for waiver actions submitted on or after March 17, 2014).
This QIS element focuses on discovery and remediation activities that is, processes to assess,
review, evaluate or otherwise analyze a program, process, operation, or outcome. Specifically, the
evidence produced as a result of discovery and remediation activities should provide a clear picture
of the state’s compliance in meeting an assurance.

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CMS Review Criteria
• The discovery of compliance with this assurance and the remediation of identified
problems must address:
1) How the Medicaid agency exercises oversight over the performance of
delegated waiver functions by other entities;
2) How frequently oversight is conducted; and
3) The entity (or entities) responsible for the discovery and remediation activities.

Appendix B: Participant Access and
Eligibility

Brief Overview

This Appendix specifies the target group(s) of Medicaid beneficiaries that the waiver serves, its
scope (i.e., how many persons the waiver serves), and processes associated with entry into the
waiver. A state has considerable flexibility in selecting the groups that the waiver serves. When
completing this appendix, it is useful to keep in mind that in order for an individual to participate
in the waiver, the person must:
a) Meet an institutional-equivalent level of care specified for the waiver (in Item 1-F of the
Application
(Module 1));
b) Be in the waiver target group specified by the state;
c) Be in a state plan Medicaid eligibility group that is included in the waiver; and,
d) Choose to receive waiver rather than institutional services under the state plan.
Provided that the state has the capacity to enroll additional participants and the foregoing
conditions are met, FFP is available for the waiver services furnished to a person once a service
plan has been prepared for the waiver entrant. No FFP is available for waiver services prior to the
date that the service plan is completed. FFP for activities related to the entrance of a person to the
waiver that are conducted prior to this date may be eligible for administrative FFP or, if applicable,
under a state’s coverage of targeted case management services under the state plan.
This Appendix has the following elements:
•
•
•
•

The target group(s) served in the waiver (Appendix B-1);
How entry to the waiver is affected by the expected cost of home and community-based
services when compared to the cost of institutional services (termed the “individual cost
limit”) (Appendix B-2);
How many individuals will be served each year during the period that the waiver is in effect
and how that number is managed (Appendix B-3);
The Medicaid eligibility groups that may participate in the waiver (Appendix B-4);

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•
•
•
•

When applicable, the post-eligibility treatment of income policies that apply to individuals
who secure Medicaid eligibility by virtue of their participation in the waiver
(Appendix B-5);
How the level of care of individuals is evaluated (Appendix B-6);
How individuals are afforded the freedom of choice between waiver and institutional services
(Appendix B-7); and,
How meaningful access to the waiver is provided to Limited English Proficient (LEP)
individuals (Appendix B-8).

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

Overview

“Target group” refers to the specific group or groups of individuals who meet an institutional level of care
(in Item 1-F of the Application module) which a state determines that it wants to serve in the waiver. A
state may provide waiver services to any individual who requires a level of care specified for the waiver or
it may instead elect to offer services only to specific subgroups of individuals who meet the level of care
requirement (e.g., only children with developmental disabilities who require the ICF/IID level of care).
This Appendix provides for the selection of one or more (at the state’s option) of the three broad target
groups that may be served in a waiver and specific subgroups within each of the three groups. It also
provides for specifying the age range of the individuals who are served in the waiver. Waiver target groups
also may be specified in greater detail. When a participant reaches the maximum age specified for a target
group, the appendix also provides for describing the transition planning procedures that are followed.
In accordance with final rule CMS 2249-F, states have the option to include multiple target groups within
one waiver. This regulatory change will enable states to design programs to meet the needs of Medicaideligible individuals and potentially achieve administrative efficiencies. For example, a growing number of
Medicaid-eligible individuals with intellectual disabilities reside with aging caregivers who are also eligible
for Medicaid. The change will enable the state to design a coordinated section 1915(c) waiver structure
that meets the needs of the entire family that, in this example, includes both an aging parent and a person
with intellectual disabilities. In this illustration, the family currently would be served in two different
waivers, but with the proposed change, both could now be served under the same waiver program.
The revisions to §441.301(b)(6) allow states, but not require them, to combine target groups. Under this
rule, states must still determine that without the waiver, participants will require institutional level of care,
in accordance with section 1915(c) of the Act. The regulation does not affect the cost neutrality requirement
for section 1915(c) waivers, which requires the state to assure that the average per capita expenditure under
the waiver for each waiver year not exceed 100 percent of the average per capita expenditures that will have
been made during the same year for the level of care provided in a hospital, nursing facility, or ICF/IID
under the state plan had the waiver not been granted.
The state must assure CMS that the waiver meets the needs of each individual regardless of target group
and that individuals have equal access to all needed services. This means that there may not be different
benefit packages for each target group.

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Detailed Instructions for Completing Appendix B-1
Item B-1-a: Target Group(s)
Instructions

Select one or more of the three principal target groups. For the target group(s) selected, select one
or more of the subgroups listed. For each subgroup that is selected, specify the minimum age at
which individuals are considered for enrollment to the waiver (if a child may be enrolled at birth,
the minimum age is “0”). If there is a maximum age that applies to entrance to the waiver, specify
the maximum age. For example, if individuals are considered for enrollment up to age 22, the
maximum age that would be indicated in the table is “21” (through age 21). If there is no maximum
age that applies to enrollment, check the final column instead of specifying a maximum age.
Technical Guidance

42 CFR §441.301(b)(6) requires that a waiver be limited to one or more of the following target
groups or any subgroup thereof:
• Aged or disabled, or both;
• Individuals with Intellectual Disabilities or a developmental disability, or both;
• Persons with mental illnesses.
42 CFR §441.301(b)(1) requires that HCBS be provided only to recipients who would otherwise
require services at the level of care in a Medicaid certified hospital, nursing facility, or ICF/IID.
Individuals who are in the waiver target group and would otherwise require the Medicaid covered
level of care specified for the waiver may be considered for entrance to the waiver. Both conditions
must be met.
For purposes of this chart, both the minimum and maximum ages refer to the age of an individual
on the date of entrance to a waiver. The waiver may provide (in the additional target group criteria)
that a person may continue to participate in a waiver beyond the maximum age specified in this
chart.
Aged or Disabled Group

This target group usually is composed of individuals who otherwise would require the level of care
furnished in a hospital and/or nursing facility.
For convenience, the “aged or disabled” group is further divided into two major subgroups. The
first major subgroup includes older persons (“aged”) and people with disabilities (“disabled”). A
waiver may serve both or only one of these groups. For purposes of the chart, the term “aged”
generally has the same meaning as in §1905(a)(iii) of the Act (i.e., persons age 65 and older).
However, a state may specify a different minimum age for this group to reflect state practice (e.g.,
persons age 60 and older). The term disabled generally means individuals with a disability under
the age of 64.
The “Specific Recognized Subgroups” section lists specific conditions (e.g., brain injury) within
the aged/disabled group that many states have elected to target in waivers. If the waiver is limited
to one or more of these specified subgroups, select the specific subgroup(s) under the broader aged
or disabled groups. The waiver may be targeted still more discretely than the groups and subgroups
listed in this chart. Additional target group criteria may be specified in the next item.

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Intellectual Disability or Developmental Disability Group
This target group (as provided in 42 CFR §441.301(b)(1)(iii)(C) is composed of individuals who otherwise
would require the level of care furnished in an ICF/IID, which is defined in 42 CFR §440.150(a)(2) as
serving persons with “intellectual disability or persons with related conditions.” States are advised that the
ICF/IID level of care is reserved for persons with intellectual disability or a related condition, as defined in
42 CFR §435.1009. Participants in a waiver linked to the ICF/IID level of care must meet the “related
condition” definition when they are not diagnosed as having an intellectual disability (e.g., persons with
autism). Some persons who might qualify as having a “developmental disability” under the Federal
Developmental Disabilities Assistance and Bill of Rights Act of 2000 may not meet ICF/IID level of care.
While “Developmental Disability” and “Related Conditions” overlap, they are not equivalent. The
definition of related conditions is at 42 CFR 435.1009, and is functional, rather than tied to a fixed list of
conditions.
Mental Illness Group

The mental illness group (as provided in 42 CFR §441.301(b)(6)(ii)) is divided into two subgroups.
The “serious emotional disturbance” group should be selected when the waiver would serve
children and youth with mental illness who require the level of care furnished in an inpatient
psychiatric facility that is licensed as hospital for individuals under age 21 (or up to age 22, if
provided in the state plan) (as provided in 42 CFR §440.160).
The “mental illness” subgroup should be selected when the waiver would serve (a) individuals
with mental illnesses who require the level of care furnished in a nursing facility or (b) persons
with mental illnesses aged 65 and older who would, but for the waiver receive services in an IMD
(as provided in 42 CFR §440.140). With respect to persons with mental illnesses, a waiver may
target adults with mental illnesses ages 22-64 when these persons are determined to require the
nursing facility level of care. Individuals with serious mental illnesses often have functional
limitations that are similar to those of other persons who require the nursing facility level of care.
However, a waiver may not target adults with mental illness ages 22-64 who would, but for the
waiver, require services furnished in an Institution for Mental Disease (IMD), and regardless of
whether the IMD is a hospital or a nursing facility. Medicaid payment is not available for persons
in this age range who are served in an IMD and, consequently, an HCBS waiver cannot target such
individuals.
CMS Review Criteria
• The target groups align with the levels of care specified in Item 1-F of the Application
(Module 1).
Item B-1-b: Additional Criteria

Instructions
In the text field, specify any additional criteria that further specify the target group(s) served by the waiver.
Technical Guidance

More discrete targeting criteria may be specified over and above the target group/subgroup and
age-ranges selected in the previous item. When additional criteria are not specified, it is presumed
that the waiver is available to all persons who need the level(s) of care specified in the Application
(Module 1) and are in the groups/subgroups selected in Item B-1-a. The additional criteria may
be specified in terms of nature or degree or type of disability, or other reasonable and definable
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characteristics that distinguish the target group from other persons who may need the level(s) of
care specified for the waiver. Such additional targeting criteria may include but are not limited to:
Nature or type of disability;
Specific diseases or conditions;
Functional limitations (e.g., extent of assistance required in activities of daily (ADLs) and/or
instrumental activities of daily living (IADLs); and,
Additional criteria also may be specified in order to align the waiver to service population
eligibility criteria that are specified in state law (for example, when a state’s definition of
developmental disability specifies that the disability must have been experienced before age 18
rather than age 22). In specifying additional targeting criteria, clearly define the terms that are
used to specify membership in the target groups.
•
•
•

When the waiver limits the age range of the target population (e.g., to adults with physical
disabilities through age 64), a state may provide that persons who enter the waiver may continue
to participate in the waiver after they reach the maximum age that applies to entrance to the waiver.
If the state provides for continuing individuals on a waiver past the specified maximum age,
specify the continuation policies that apply.
A waiver may target exclusively individuals who want to direct at least some or all of their waiver
services by employing the participant direction opportunities that are specified in Appendix E.
This targeting criterion should be reflected here.
CMS Review Criteria
The waiver target group or groups are sufficiently well defined to permit the determination that
an individual meets the target group criteria.
Item B-1-c: Transition of Individuals Affected by Maximum Age Limit
Instructions

When there is a maximum age limitation on individuals who may be served in the waiver, describe
the transition planning procedures for participants affected by the age limit in the text field.
Otherwise, select “not applicable.”
Technical Guidance

When an individual’s participation in the waiver is subject to an upper age limit, there should be
transition planning procedures that are followed to assist participants who “age out” of the waiver
(i.e., the participant no longer will be eligible once the person reaches the waiver’s age limit). As
noted previously, in its additional targeting criteria, a state may provide for the continuation of
services to participants whose age exceeds the maximum age limit that applies to entrance to the
waiver. For example, if a waiver serves the “disabled” under age 65, a state may provide that
individuals may continue to participate in the waiver once they reach age 65. If the waiver does
not provide for continuation of individuals beyond the age limit that is applied to entrants to the
waiver or continuation is not feasible (due to level of care considerations), transition planning is
appropriate. Transition planning is most effective when it is initiated sufficiently in advance of
the date that the participant will be terminated from the waiver in order to provide continuity of
services to the extent feasible.
Transition planning may include identifying other public programs for which the participant may
qualify, informing the person of such programs and linking the person to them. A state also may
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provide that participants affected by an age limit are referred to and/or enrolled in another HCBS
waiver for which the individual may be eligible. A state may provide that such individuals receive priority
consideration for entrance into another waiver. A state is not obligated to ensure that individuals adversely
affected by a maximum age limit receive services after termination from the waiver.

CMS Review Criteria
When the waiver does not provide for the continuation of services to waiver participants beyond
the age limit specified in the waiver, there are transition planning procedures that link affected
participants to another waiver or other services and supports that provide continuity of services
in the community to the extent feasible.

Appendix B-2: Individual Cost Limit

Overview

A state may restrict enrollment into, and ongoing participation in, a waiver based on the expected
cost of the home and community-based services that would be furnished to a person. In Appendix
B-2, the individual cost limit (if any) under which the waiver operates is specified. The individual
cost limit is specified in relationship to the costs of the institutional services at the level of care
that a person requires. The cost comparison is based on the expected costs of home and
community-based waiver services plus the costs of other state plan services that the person likely
will require to the average cost of institutional services at the level of care the person requires plus
the costs of state plan services that would be furnished to the person in an institutional setting.
When an individual cost limit is specified, the waiver must specify the state’s safeguards to address
the needs of waiver participants whose continuation on the waiver may be subsequently affected
by the individual cost limit.
A waiver’s design may include reasonable methods to control overall spending, including the
specification of an individual cost limit. In combination, the individual cost limit, the waiver’s
service array, the availability of other services under the state plan and from other sources, and any
other limits on the amount and scope of services must be sufficient to assure the health and welfare
of the waiver’s target population.
When completing this Appendix, it is important to keep in mind that the individual cost limit
functions as a criterion against which the determination is made about whether to offer entrance to
a waiver to an individual and the person’s continued participation in the waiver post-entrance. The
individual cost limit does not specify an amount of waiver services to which an individual is
entitled. The amount of waiver services that a person receives is determined through the
participant-centered service plan development process and is subject to any other limitations that
a state may impose on the amount, duration and frequency of specific waiver services as provided
in Appendix C-3 or the overall amount of groups of services or the total amount of services in the
service plan, as specified in Appendix C-4. The individual cost limit (if imposed) governs entrance
to the waiver (e.g., if the expected costs of the services that a person requires exceed the cost limit,
the person will be denied entrance) and continued stay on the waiver. Given that the individual
cost limit is a criterion for entrance and continued stay on a waiver, the state may elect only one
individual cost limit, applied fairly and uniformly to all potentially eligible individuals.

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Detailed Instructions for Completing Appendix B-2
Item B-2-a: Individual Cost Limit
Instructions

Select one of the four choices presented. As applicable, provide the additional information as
specified.
Technical Guidance

This item presents four choices concerning the individual cost limit. One of these choices must be
selected:
No Cost Limit. When an individual cost limit is not imposed, this means that no otherwise
eligible individual will be denied entrance to the waiver solely based on the anticipated costs
of the home and community-based services that the person may require. Again, this does not
mean that the person is entitled to unlimited home and community-based services once enrolled
in the waiver program. The amount of services that will be furnished to an individual is
determined based on assessed needs and as specified during the development of the service
plan and is subject to any other limitations specified in Appendix C. This selection allows the
entrance to the waiver of individuals who may require an amount of home and communitybased services that exceeds the average cost of the institutional services for the level of care
that the person requires. When this choice is selected, it is not necessary to complete the
remaining two items (Items B-2-b and B-2-c) in this Appendix. When any of the other choices
are selected, the next two items must be completed.

•

The selection of this choice (or any of the other three choices) does not permit a state to
implement practices that de facto amount to the imposition of a cost limit (for example, by
limiting or managing entrance to the waiver by selecting individuals who are expected to have
relatively low costs or requiring that the costs of individuals who require intensive services
must be offset by only permitting the entrance of persons with off-setting lower costs). An
individual cost limit must be applied uniformly to all potential waiver entrants. While a waiver
may be managed in the “aggregate” to assure cost-neutrality or achieve a targeted level of
expenditures per waiver participant, entrance determinations must be made on an individual
basis.
•

Cost Limit in Excess of Institutional Costs. A state may elect to offer entrance to the waiver
to persons when the costs of their home and community-based services are expected to be
greater than the average cost of the institutional services, as specified as Factor G in Appendix
J of the waiver, for the level of care that the person requires but set an upper limit on how
much expected costs may exceed institutional costs. For example, a state may provide for
the entrance of persons whose costs are not expected to exceed 125% of institutional costs.
If this choice is selected, the cost limit must be specified. In addition, the state still must
demonstrate cost-neutrality in the aggregate.

•

Institutional Cost Limit. A state may elect to limit entrance to the waiver to only those
individuals for whom the costs of home and community-based services are not expected to
exceed the average costs of the institutional services for the level of care that the person
requires. When this choice is selected, entrance to the waiver will be denied when a person’s
expected costs of home and community-based services exceed the average cost of
institutional services.

•

Cost Limit Lower Than Institutional Services. Finally, a state may elect to impose an
individual cost limit that is lower than the cost of the institutional services for the level of

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care that the person requires. The selection of this limit generally is only appropriate in the
case of waivers that target individuals who can be expected to have available services and
supports from other sources (e.g., family caregivers or other public programs) that, in
combination with waiver services, will be sufficient to assure their health and welfare. When
a state elects this choice, it must specify the basis of the limit that it imposes (i.e., the
information analyzed and the rationale to support the assertion that the limit selected ensures
that individuals who enter the waiver will have sufficient services and supports to assure their
health and welfare). This evidence may be based on:





An analysis of service utilization in a waiver that serves a similar target group;
An analysis of service utilization in a state program that serves a similar target group;
The experience of a waiver that serves a similar target group in another state; and/or,
An assessment of the service needs of individuals in the target group.

For example, if a waiver targets children with disabilities, information about the amount of
state plan services (including enhanced EPSDT services) that are typically utilized by children
with disabilities might be combined with estimates of the expected utilization of waiver
services to serve as the basis for the cost limit.
The limit that is applied also must be specified. This limit may be expressed as an absolute
dollar amount, a percentage (less than 100%) of the costs of the institutional services for the
level of care that the person requires or another type of limit that the state specifies. If the limit
is expressed as an absolute dollar limit, specify how the limit will be adjusted during the period
in which the waiver is in effect to account for changes in the cost of providing services.
CMS Review Criteria
• When the waiver imposes a cost limit that is lower than the cost of institutional services,
the limit is based on sound analysis and rationale that, within the amount of the limit, the
health and welfare of the waiver target population will be assured post entrance to the
waiver.
• When the limit is expressed as an absolute dollar limit, the waiver describes how the limit
will be adjusted during the period in which the waiver is in effect to account for changes
in the cost of providing services.
•

When a waiver imposes an individual cost limit, it is applied uniformly and fairly to all
potentially eligible individuals.

Item B-2-b: Method of Implementation of the Individual Cost Limit
Instructions

This item must be completed unless the “no cost limit” selection is made in Item B-2-a. In the
text field, specify the procedures that are followed to determine in advance of waiver entrance
that the individual’s health and welfare can be assured within the cost limit.
Technical Guidance

When an individual cost limit is established, there must be procedures that are conducted during
entrance to the waiver to determine that the individual’s health and welfare can be assured within
the amount of the cost limit. Such procedures may include conducting an assessment to identify
the services that the person may require or initiating the development of a service plan in order to
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ascertain the amount of waiver services that the person may require (in addition to state plan and
the other services and supports available to the person) to meet the person’s needs. When the
application of an individual cost limit results in the denial of entrance to the waiver, the affected
individual must be offered the opportunity to request a Fair Hearing, as provided in Appendix F.
CMS Review Criteria
The procedures that are specified take into account the full range of supports that the person
requires in the community and includes notification of the opportunity to request a Fair Hearing
if entrance is denied.

Item B-2-c: Participant Safeguards
Instructions

When an individual cost limit is specified, indicate the safeguards that are in effect when postentrance, a waiver participant requires the provision of services in an amount that exceeds the cost
limit in order to assure the participant’s health and welfare. Check each choice that applies and
provide the specified information.
Technical Guidance

After a person enters the waiver, the individual may experience a change in condition or
circumstances (e.g., a family caregiver no longer is available or is temporarily unavailable to
support the individual) that might necessitate the provision of additional waiver services in order
to assure the waiver participant’s health and welfare. When there is an individual cost limit, the
need for such additional services may result in the person no longer being eligible for the waiver.
In this item, specify the safeguards that have been established in the event that the person requires
services that would cause the cost limit to be exceeded. The item specifies three types of
safeguards; these safeguards may be used in combination. These safeguards are:
•

•

•

The person is referred for enrollment in another waiver. This selection may be
appropriate when there is another waiver that operates under a higher individual cost limit or
no cost limit for which affected individuals might qualify. A state may provide the
continuation of waiver services until the person can be transitioned to the other waiver.
Depending on a state’s policies, referral to another waiver may or may not ensure that the
person can actually be enrolled in the other waiver;
There is provision to authorize services in excess of the individual cost limit in order to
avoid disruption to the participant. The waiver may provide for the authorization of
additional services to address time-limited or other needs for additional services in order to
support an individual until alternative arrangements are made. If this choice is selected,
describe the procedures that are followed in authorizing additional services over the amount
of the individual cost limit, including whether there is a limit on the amount of the additional
services that may be authorized or the length of time the additional services will be provided;
and,
Other. A state may provide for other alternatives to address the needs of waiver participants
affected by the individual cost limit. Describe these alternatives. These alternatives may
include informing the participant of other options and making referrals to other services in
the community. Referral to other services does not necessarily ensure that the person will be

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furnished such services. If need be, such alternatives may include referral for institutional
services as a last resort.
CMS Review Criteria
• The waiver specifies one or more safeguards to facilitate the continuity of services for
affected individuals in the community.
• The waiver provides for informing the participant of, and referral to, other options.

Appendix B-3: Number of Individuals Served

Overview

In this Appendix, a state specifies the maximum number of unduplicated participants who will be
served during each year that the waiver is in effect. In addition, this Appendix provides for the
selection of options that may be employed to manage the number of persons served by the
waiver. Also, the Appendix requires specifying (when applicable) how waiver openings are
distributed across areas of the state and policies that affect the selection of individuals for
entrance to the waiver.
By way of reference, an unduplicated participant means a unique individual who participates in
the waiver during a waiver year, regardless of when the individual entered the waiver and length
of stay on the waiver. A person who enters, exits, and re-enters the waiver during a waiver year
counts as one unduplicated waiver participant.

Detailed Instructions for Completing Appendix B-3
Item B-3-a: Unduplicated Number of Participants

Instructions
In Table B-3-a, enter the maximum number of unduplicated participants who may be served during each
waiver year that the waiver is in effect. In the case of a new waiver (including a new waiver to replace an
approved waiver), enter figures for waiver years 1-3, or years 1 – 5 if applicable. For a waiver renewal,
enter figures for waiver years 1-5. The numbers entered in this table are also entered into Table J-2-a in
Appendix J (Cost-Neutrality Demonstration). The web-based application automatically displays the correct
number of rows based on whether the state is submitting a new or renewal waiver. In addition, the webbased application links this table to Table J-2-a.
Technical Guidance

The number specified for each waiver year constitutes the maximum limit on the unduplicated
number of participants that the waiver will serve (also known as Factor C). It is up to the state to
specify this maximum. Until the maximum number of unduplicated participants in the approved
waiver is reached, a state may not deny entry to the waiver of otherwise eligible individuals unless
the state elects to establish a point-in-time enrollment limit, adopts a phase-in or phase-out
schedule, or reserves capacity for specified purposes (see following items).As a consequence, the
number of persons who will be served should be based on a careful appraisal of the resources that
the state has available to underwrite the costs of waiver services.
Post-approval, the maximum number of unduplicated participants may be modified by submitting
a waiver amendment to CMS to increase or decrease the maximum. An amendment to increase
the maximum may be made effective to the beginning of the current waiver year. When more
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individuals are served in the waiver than the maximum, submit an amendment to align the waiver
with the number of individuals served. An amendment to reduce the maximum number of waiver
participants below the number currently being served may only be made effective on the date that
CMS approves the amendment. Consequently, when a reduction is necessary, an amendment
should be submitted as soon as the need for a change to the participant limit is identified. When a
reduction in the maximum number of participants is requested, the amendment request must
include information concerning the impact of the reduction on existing waiver participants (see
Waiver Application, Submission Requirements, Processes, and Procedures – Other Changes to
Approved Waivers for additional information).
A state may find it necessary to reduce the maximum number of participants because legislative
appropriations are insufficient to support the number of persons specified in the approved waiver.
In order to affect such a reduction, a state must submit a waiver amendment and the amendment
must be formally approved by CMS. As previously noted, in the past, states have been permitted
to tie the number of participants to legislative appropriations and notify CMS in writing of the
reduction in the number of participants due to legislative appropriations without submitting an
amendment. This alternative is no longer available. The waiver is considered to be in effect as
approved unless CMS has formally approved an amendment submitted by the state. If a state finds
it necessary to freeze waiver enrollment or place a moratorium on new entrants to the waiver, the
state also must submit an amendment to CMS to revise the unduplicated participant cap for the
affected waiver year.
Item B-3-b: Limitation on the Number of Participants Served at any Point in Time
Instructions
Select whether there is a limit on the number of individuals who may participate in the waiver at any point
in time during a waiver year. If there is a limit, complete Table B-3-b by specifying the limit for each
waiver year.
Technical Guidance

In addition to specifying the maximum number of unduplicated participants, a state also may
specify the maximum number of participants who are served at any point in time during the waiver
year. Specifying such a maximum may assist in managing waiver expenditures and taking into
account participant turnover during the course of a waiver year.
For example, a waiver may provide for the enrollment of no more than 1,000 unduplicated
participants during a waiver year. Taking turnover into account, a state might establish a point-intime enrollment limit of 950 individuals. Establishing such a limit may avoid a state’s having to
freeze entrance to the waiver before the end of the waiver year.
The decision to establish such a limit is up to the state. If the state does not wish to establish such
a limit, select the first choice. If a limit is established, select the second choice and specify the
limit for each year to which a limit will be applied. A limit may be applied to each waiver year or
only selected years. For example, when a waiver is being phased in, a state might limit
participation in the waiver by adopting a phase-in schedule as provided in Item B-3-d during the
initial period that the waiver is in effect but provide for a point-in-time limit for subsequent waiver
years. The limit that is established will be lower than the maximum unduplicated waiver
participant limit specified in Item B-3-a and should be reasonably related to the expected rate of
turnover of waiver participants.

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In the case of a model waiver, the second choice must be selected when the number of
participants specified in Item B-3-a is equal to or greater than 200 and the maximum number of
participants served at any point in time may not exceed 200 persons.

CMS Review Criteria
When the waiver provides for a point-in-time limit, the limit for each waiver year is consistent
with the implied turnover rate in the average length of stay estimates in
Appendix J-2-b. (Turnover rate = Total # unduplicated persons per year / # of persons served
at any point in time.)
Item B-3-c: Reserved Waiver Capacity

Instructions
Specify whether waiver capacity is reserved for purposes specified by the state. If no capacity is reserved,
select the first choice. When capacity is reserved, complete Table B-3-c for each purpose a state has to
reserve capacity. For each purpose, provide a brief title or name for the purpose of reserve capacity, specify
the purpose for which capacity is reserved, how the amount of reserved capacity was determined, and
specify the amount of capacity reserved for each Waiver Year.
Technical Guidance

A state may reserve a portion of a waiver’s capacity for specified purposes. Reserving waiver
capacity means that some waiver openings (a.k.a., “slots”) are set aside for persons who will be
admitted to the waiver on a priority basis for the purpose(s) identified by the state. If capacity is
not reserved, then all waiver openings are considered available to all target group members who
apply for waiver services and are eligible to receive them. Reserved capacity is not available to
persons who are not in the state-specified priority population. Examples of appropriate purposes
for which capacity may be reserved include (but are not limited to):
•

•
•
•

Setting aside capacity to accommodate the community transition of institutionalized persons
(e.g., through a “Money Follows the Person” initiative). In this case, reserving capacity
ensures that there is waiver capacity available when individuals are ready to transition to the
community transition;
Reserving capacity to accommodate the transition of individuals from other waivers;
Reserving capacity to accommodate individuals who may require services due to a crisis or
emergency; and,
Providing for the transition of individuals who age out of another waiver or other services
(e.g., youth who age out of child welfare services) in order to ensure the continuity of their
services.

Capacity may be reserved for more than one purpose. It is not appropriate to reserve capacity to
reflect uncertainties about future legislative appropriations for the waiver.
Reserving capacity is only a means to hold waiver openings for the entrance of specific sets of
individuals to the waiver. A state may not reserve capacity in a fashion that would have the effect
of limiting the number of waiver participants who may access certain types of waiver services and,
thereby, result in creating a “waiver within a waiver.” All individuals who enter the waiver must
have comparable access to the services offered under the waiver. For example, a state may not
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reserve capacity in order to limit the number of persons who receive assisted living services in a
waiver. A state may not use this feature to control access by certain Medicaid eligibility groups
(e.g., by limiting access by the special home and community-based eligibility group (217 group)
to 10% of waiver participants). Similarly, capacity may not be reserved to limit the number of
waiver participants who may direct some or all of their waiver services.
CMS Review Criteria
When capacity is reserved, it is reserved only for the purpose of holding waiver capacity for
one or more specific sets of individuals and does not violate the requirement that all waiver
participants enrolled in the waiver have comparable access to all services offered in the
waiver.
Item B-3-d: Scheduled Phase-In or Phase-Out

Instructions

When entrance to the waiver is subject to a phase-in schedule or the waiver is being phased-out,
select the second choice and complete Attachment #1 to Appendix B-3. If the waiver is not subject
to a phase-in or phase-out schedule, select the first choice.
Technical Guidance

A state may phase-in or phase-out a waiver over the course of a waiver year or multiple waiver
years. For example, a state may provide for the entrance of 100 persons per month to the waiver
during the first year of a waiver’s operation. Alternatively, a state may decide to phase out a
waiver by transitioning individuals to another waiver over an extended period of time. A state
may limit waiver capacity month-by-month during a waiver year by tying the maximum number
of waiver participants who may be served each month to a phase-in or a phase-out schedule.
Absent such a limit, a state is obligated to allow individuals to enter the waiver up to the participant
limit for the waiver year as specified in Item B-3-a or B-3-b. When a waiver is being phased-in
or phased out, the average length of stay of individuals on the waiver is affected. Item J-2-a in
Appendix J (Cost Neutrality Demonstration) provides for describing the basis of the estimate of
the average length of stay on the waiver. In the description, reference may be made to this item
when the waiver is being phased-in or phased-out.
Attachment #1 to Appendix B-3: Waiver Phase-In or Phase-Out Schedule
Instructions

As previously noted, this attachment is completed only when a waiver is being phased in or
phased-out.
Item a: Select whether the waiver is being phased-in or phased out.
Item b: Waiver Years Subject to Phase-In or Phase-Out Schedule

Indicate the waiver years during which phase in or phase out will take place. Phase-in or phaseout may extend over multiple waiver years.
Item c: Phase-In or Phase-Out Time Period

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In the table, specify the first calendar month of each waiver year. For example, if a waiver is effective on
October 1, enter October. In the next row, enter the month and the waiver year when phase-in or phaseout will begin. In the final row, enter the month and the waiver year when the phase-in or phase-out will
be completed.
Item d: Phase-In or Phase Out Schedule

This table must be completed for each waiver year during which phase-in or phase-out is taking
place. If phase-in or phase-out will take place over more than one waiver year, add another page
to the application (by inserting a page break) and copy this table onto to the new page. An example
of a completed table is provided below.
Waiver Year: In the table, indicate the waiver year for which the phase-in or phase-out schedule
applies. Complete the remainder of the table as follows:
Month Column: Enter the first month of the waiver year and fill the remainder of the column
with the names of the subsequent months through the end of the waiver year.
Base Number of Participants: In this column, enter the number of participants who will be served
during the month, not counting the number who will be added to or leave the waiver during the
same month.
Change in Number of Participants: Enter the number of participants who will be added to the
waiver or leave the waiver during the month.
Participant Limit: The participant limit for a month is the sum of the base number of participants
plus the number who will enter the waiver or less the number who will leave the waiver. This
participant limit becomes the base number of participants for the next subsequent month.
See Example Below:
Example: Phase-In or Phase-Out Schedule
Waiver Year: One
Base Number of
Participants

Change in Number of
Participants

Participant Limit

October

3,500

0

3,500

November

3,500

0

3,500

December

3,500

0

3,500

January

3,500

150

3,650

February

3,650

150

3,800

March

3,800

150

3,950

April

3,950

150

4,100

May

4,100

150

4,250

June

4,250

150

4,400

July

4.400

0

4,400

Month

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Example: Phase-In or Phase-Out Schedule
Waiver Year: One
Base Number of
Participants

Change in Number of
Participants

Participant Limit

August

4,400

0

4,400

September

4.400

0

4,400

Month

Item B-3-e: Allocation of Waiver Capacity
Instructions

Select whether waiver capacity is allocated/managed on a statewide basis or, instead, is allocated
based on local/regional geographic area. In the latter case, specify: (a) the entities or areas upon
which waiver capacity is allocated; (b) the methodology that is employed to allocate capacity; and,
(c) policies for the reallocation of unused capacity among local/regional non-state entities or
geographic areas.
Technical Guidance

“Allocation of waiver capacity” refers to the practice in some states (especially states where
waivers are operated through local/regional non-state entities) of allocating waiver openings
(a.k.a., “slots”) by geographic area. This contrasts to managing entrance to the waiver on a
statewide basis (or less than statewide basis when there is a waiver of statewideness, but the state
manages entrance across all areas served by the waiver) where entrance to the waiver is not based
on geographic area. The practice of allocating waiver capacity by geographic area is permissible
so long as the methods to allocate waiver capacity result in similar access to the waiver among the
geographic areas where the waiver operates. When waiver capacity is allocated in a fashion that
results in substantially unequal access among geographic areas, the waiver may not meet
statewideness requirements.
The allocation of waiver capacity by geographic area may not impede the free movement of waiver
participants from area to area in a state. That is, waiver “slots” must be portable across areas of
the state.
Appropriate methods of allocating waiver capacity by geographic area may include taking into
account the population of each area, other demographic factors, assessed need for waiver services
by area or a combination of such factors. A state may find it necessary to implement strategies to
adjust allocations of waiver capacity on a multi-year basis in order to achieve similar access to
waiver services across geographic areas. For example, a state may reserve some waiver capacity
to increase allocations in underserved areas.
When waiver capacity is allocated by geographic area, there also must be methods to reallocate
unused capacity to areas where additional capacity may be needed (e.g., where there are waiver
waiting lists). It is not appropriate to operate a waiver in a fashion that results in individuals
waiting for services in some geographic areas when there is unused capacity in other areas. When

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a state intends to limit the number of persons served by geographic area, it must submit a waiver
application and an accompanying waiver of statewideness in order to confine the operation of the
waiver to the geographic area.
CMS Review Criteria
When waiver capacity is allocated to local/regional non-state entities or geographic areas:
•
•
•
•
•

The waiver describes the methodology that is employed to allocate capacity.
The methodology is based on objective factors/criteria.
The waiver specifies the entities to which capacity is allocated, if applicable.
There are policies to reallocate unused capacity among local/regional non-state entities or
geographic areas.
The state’s practices do not violate the requirement that individuals have comparable
access to waiver services across the geographic areas served by the waiver or impede the
movement of participants across geographic areas.

Item B-3-f: Selection of Entrants to the Waiver
Instructions

In the text field, specify the policies that apply to the selection of individuals for entrance to the
waiver.
Technical Guidance

The state’s limit on the number of individuals who participate in a waiver may result in a waiting
list for waiver services (e.g., entrance to the waiver of otherwise eligible applicants must be
deferred until capacity becomes available as a result of turnover or the appropriation of additional
funding by the legislature). Entrance to the waiver may not be deferred when there is unused
waiver capacity (except when a state has established a point-in-time limit, reserved capacity or
made entrance subject to a phase-in schedule). If it is necessary to defer the entrance of individuals
to the waiver, the state must have policies that govern the selection of individuals for entrance to
the waiver when capacity becomes available. These policies should be based on objective criteria
and applied consistently in all geographic areas served by the waiver. Examples of appropriate
policies may include (but are not necessarily limited to):
•
•

Entry to the waiver is offered to individuals based on the date of their application for the
waiver; or,
Entry to the waiver is prioritized based on the imminent need for services that is determined
through an assessment process.

When the state operates the waiver in a fashion that does not entail deferring the entrance of
otherwise eligible persons, simply state that the waiver provides for the entrance of all eligible
persons.
It is not appropriate to base policies for the selection of otherwise eligible individuals on factors
such as the expected costs of waiver services or the types of services that an individual might
require post-entrance. A state may not delegate the authority to establish policies for the selection
of individuals to enter the waiver to local/regional non-state entities or other types of entities.

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CMS Review Criteria
•

There are state-established policies governing the selection of individuals for entrance
to the waiver

•

Policies are based on objective criteria and do not violate the requirement that otherwise
eligible individuals have comparable access to all services offered in the waiver.

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

Overview

In this Appendix, the state specifies the Medicaid eligibility groups that are served in the waiver.
In order for an eligibility group to be included in the waiver, it must already have been included
in the state plan.

Detailed Instructions for Completing Appendix B-4
Item B-4-a: State Classification

B-4-a-1 State Classification
Instructions

Select whether the state is: (a) §1634 state; (b) an SSI-criteria state; or, (c) a 209(b) state. In the
web-based application, the selection made for this item links to Appendix B-5 and calls up the
appropriate post eligibility treatment of income sections for §1634, SSI Criteria, or 209(b) states.
Technical Guidance

With respect to Supplemental Security Income (SSI) beneficiaries, a state may be a:
•

§1634 State. Under the provisions of §1634(a) of the Act, a state may enter into a contract
with the Social Security Administration (SSA) under which SSA determines Medicaid
eligibility at the same time that eligibility for SSI benefits and/or federally-administered state
supplementary payments is determined. In §1634 states, SSI recipients do not make a separate
application for Medicaid and are automatically enrolled in Medicaid;

•

An “SSI-Criteria State.” In these states, SSI beneficiaries are categorically eligible for
Medicaid but must make a separate application for Medicaid; or,

•

A §209(b) State. The state applies rules that are more restrictive than SSI in determining the
Medicaid eligibility of SSI-beneficiaries.

These are mutually exclusive categories. State officials who are familiar with Medicaid eligibility
policies under the state plan should be consulted when completing this item. The response to this
item determines which post-eligibility treatment of income rules apply when Appendix B-5 is
completed.
B-4-a-2 Miller Trust State
Instructions

Indicate whether the state is a Miller Trust State.

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Technical Guidance

Refer to guidance contained in Appendix B-5 of these instructions regarding Miller Trusts.
CMS Review Criteria
The selection comports with the state plan.
Item B-4-b: Medicaid Eligibility Groups Served in the Waiver
Instructions

Specify each Medicaid eligibility group that is included in the waiver. Where indicated, furnish
the additional information about a group.
Technical Guidance

In order to participate in a waiver, a person not only must require the level of care specified for the
waiver and meet the waiver’s target group criteria but also be a member of a Medicaid eligibility
group (e.g., SSI beneficiaries) that a state has decided to include in the waiver. A state may include
a Medicaid eligibility group in the waiver only when it includes the same group in its state plan.
In other words, operating an HCBS waiver does not permit a state to expand Medicaid eligibility
beyond what already is provided in the state plan. If a group is not included in the state plan, it
may not be included in the waiver.
If a group is included in the Medicaid state plan, a state has the option to include the group in the
waiver. The impact of a waiver in assisting individuals to remain in the home and community is
enhanced when the waiver includes all applicable Medicaid eligibility groups.
In the context of the HCBS waiver program, Medicaid eligibility groups fall into two broad
categories: (a) eligibility groups that include individuals who are eligible for Medicaid without
regard to whether they are institutionalized (e.g., SSI beneficiaries) and (b) eligibility groups that
include individuals who would not be eligible for Medicaid except in an institutional setting (e.g.,
the special income level group). When the second group is included in the waiver (as provided by
§1902(a)(10)(A)(ii)(VI) of the Act), institutional eligibility rules (which are usually more generous
than the “community rules” that apply to the first category) may be used in the community. This
second group is referred to as the “special home and community-based services waiver eligibility
group” as provided in 42 CFR §435.217 (see below).
Appendix B-4 provides for checking off specified Medicaid eligibility groups that are included in
the waiver. The listed community groups often are included in waivers. Since many states have
added the Medicaid “Buy-In” eligibility groups to their state plans, checkoffs have been included
for both the BBA-97 and TWWIA buy-in groups. However, this list is not exhaustive. There are
over 50 distinct groups that a state may include in its state plan. If there are additional groups that
a state includes in the waiver over and above those listed, they should be specified (by citing the
appropriate statute or regulation) in the text boxes provided in the item. When completing this
part of the application, personnel at the Medicaid agency who are well versed concerning the
eligibility groups included in the state plan should be consulted to ensure that the appropriate
selections are made.
There are additional requirements with respect to covering medically needy eligibility groups
under home and community-based services waivers. States that limit coverage of medically needy
by eligibility group can only cover those medically needy groups covered in the state plan. For
example, if a state only covers the mandatory AFDC medically needy group in its state plan, it
may only cover those individuals on the waiver. If a state does not cover medically needy
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individuals in an institution, it cannot cover them in the waiver. For example, if a state does not
cover nursing facility services for medically needy, it cannot provide HCBS waiver services to
medically needy individuals who require the nursing facility level of care.
There are check offs for including the “special home and community-based services waiver
eligibility group” under 42 CFR §435.217. All individuals in this group may be included or the
state may elect to include only specified groups (the second response). An individual is eligible
under the §435.217 group, if the individual (1) is otherwise eligible for the HCBS waiver but would
not be eligible for Medicaid while he or she is living in the community; (2) is eligible (or would
be eligible) under the state Medicaid plan without spending down income if he or she were in a
hospital, nursing facility or ICF/IID; and (3) receives waiver services. Check off whether the
§435.217 group is included and then indicate the specific groups that are included and, if necessary,
identify any other groups that are included but not listed. The web-based application links the
selection of the §435.217 group to completing Appendix B-5 (Post Eligibility Treatment of
Income).
The interplay between medically needy eligibility and eligibility under the §435.217 group is as
follows:
•

For §1634 and SSI criteria states, the individual would be eligible only in an institution
as categorically needy and medically needy without spending down income. The HCBS
waiver and the §435.217 group permit the special income level group to be covered in the
community. Individuals with income under the special income level are categorically
needy. Therefore, the basis for qualifying for the waiver changes from medically needy to
the special income level group for individuals with income under the special income level
group without a spenddown. However, a medically needy individual with income over the
special income level cannot spend down to the special income level and be eligible under
the §435.217 group.

•

For 209(b) states, the individual would be eligible for Medicaid in the institution without
a categorically needy or medically needy spenddown. Mandatory categorically needy
individuals eligible under 42 CFR §435.121 are not eligible under the §435.217 group (e.g.,
SSI recipients). However, optional categorically needy individuals can be eligible under
the §435.217 group. The HCBS waiver and the §435.217 group permit the special income
level group to be covered in the community. Individuals with income under the special
income level are categorically needy. Therefore, individuals who are both medically needy
and optional categorically needy and have income below the special income level would
be eligible under the special income level group without a spenddown. However,
individuals with income over the special income level cannot spenddown to the special
income level and be eligible under the §435.217 group.

When the §435.217 group is included in the waiver, Appendix B-5 (Post-Eligibility Treatment of
Income) also must be completed.
CMS Review Criteria
The eligibility groups served in the waiver are included in the state plan.

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Appendix B-5: Post-Eligibility Treatment of
Income

Overview

In this Appendix, state policies are detailed concerning the post-eligibility treatment of income of
waiver participants who are eligible under 42 CFR §435.217.
As of January 1, 2014, states must apply the eligibility and post-eligibility methodologies
described in section 1924 of the Social Security Act (the spousal impoverishment statute) to
all married individuals seeking eligibility under the category described at 42 C.F.R.
§435.217. This requirement applies to all new 1915(c) waivers. Additionally, as part of any
renewal or amendment to a state’s 1915(c) waiver, a state should, if necessary, modify the
terms of its waiver (specifically, in Appendix B-5) to conform its provisions to section 1924 if
the §435.217 category is covered under the waiver. See instructions for Appendices B-5-a,
B-5-e, B-5-f, and B-5-g.

Post-Eligibility Treatment of Income: Overview
All waiver participants who are eligible under 42 CFR §435.217 (the special home and
community-based services waiver eligibility group) (as described in the instructions for Appendix
B-4) are subject to post-eligibility calculations. Eligibility and post-eligibility are two separate
and distinct processes with two separate calculations. Eligibility determines whether a person may
be served in the waiver and is conducted in conjunction with entrance to the waiver. Posteligibility determines the amount (if any) by which Medicaid reduces its payment for services that
are furnished to an individual in the §435.217 group. By doing so, post-eligibility determines the
amount (if any) for which an individual is liable to pay for the cost of waiver services. Posteligibility is conducted ONLY for waiver participants in the §435.217 group. Waiver participants
who are eligible for Medicaid under “community rules” (e.g., SSI beneficiaries) are not subject to
post-eligibility.
Post-eligibility calculations are affected as specified in Appendix B-4 by federal regulations
depending on whether the state is a §1634 State or an SSI-Criteria State (42 CFR §435.726), or a
§209(b) state (42 CFR §435.735). These regulations are included in Attachment C to the
instructions. The post-eligibility calculations also may be affected by whether “spousal
impoverishment rules” are used to determine the eligibility of a waiver participant with a
community spouse. For the period beginning January 1, 2014 and extending through September
30, 2019, states must use spousal impoverishment rules.
Allowances
Post-eligibility calculations arrive at the amount that the waiver participant is liable to pay for the
cost of waiver services by deducting from the person’s income four types of allowances:
1. Allowance for the needs of the waiver participant. This allowance also is referred to as
the “maintenance needs” allowance. This is the amount of income from which the participant
will provide for her/his everyday living expenses (e.g., rent, food, and other living expenses).
As provided in 42 CFR §435.726(c)(1)(i) and §735(c)(1)(i), the state must provide for a
maintenance allowance that is based on a reasonable assessment of the individual’s needs in
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2.

3.

4.

the community. As provided in §1915(c)(3), a state may establish the maintenance allowance
for the participant at any level the state chooses so long as it is based on a reasonable
assessment of individual needs. Different maintenance allowances may be established for
individuals or for groups of individuals, based on an assessment of the individual’s or the
group's particular needs. The amount(s) established must be sufficient to provide for a
participant’s shelter, food and other routine expenses. In the case of waiver participants with
a community spouse whose eligibility is determined using spousal impoverishment rules
(under §1924 of the Act), the state may provide for a different maintenance allowance than
participants who do not have a community spouse (see Item B-5-d). However, if this amount
is different from the amount protected for the individual’s maintenance allowance under 42
CFR §435.726 or §435.735, the state must explain why it believes the amount is reasonable
to meet the individual’s maintenance needs in the community.
Allowance for a Spouse. Under regular post-eligibility rules, if the individual lives with his
or her spouse or if the individual is living in the community and the spouse is living at the
individual’s home, the state must protect an additional amount for the spouse's maintenance.
This allowance cannot exceed the highest of the SSI standard, the Optional State Supplement
standard or the Medically Needy Income standard. The state may choose which standard to
apply. If the individual's spouse is not living in the individual's home, no maintenance amount
is protected for the spouse's needs. Under spousal impoverishment post-eligibility, a
community spouse is defined as a spouse who is not living in a medical institution or nursing
facility. For the period beginning January 1, 2014 and extending through September 30, 2019
states must use spousal impoverishment rules.
Allowance for a Family: Under regular post-eligibility rules, if other family members live
with the individual, an additional amount is protected for their needs. This amount is limited
by the AFDC need standard for a family of the same size or by the appropriate medically
needy income standard for a family of the same size. The state may choose which standard
to apply.
Medical and Remedial Care Expenses: Medical and remedial care expenses are specified
in 42 CFR §435.726, §435.735 and §1924 of the Act. Under the post eligibility process,
which is specified at section 1902(r)(1) of the Social Security Act, states must deduct from
an individual’s income: (a) health insurance premiums, deductibles and co-insurance charges
(including Medicaid co-payments) and (b) amounts incurred for necessary medical and
remedial care expenses that are not subject to payment by a third party and which are
recognized under state law but not covered under the state plan. With respect to the deduction
of incurred remedial and medical care expenses not covered by Medicaid, a state may elect
to deduct all such expenses or, at its option, establish reasonable limits on amounts for
incurred remedial and medical care expenses not covered by Medicaid. The individual must
currently be liable for the payment for these services in order for them to be deductible.
For post eligibility purposes, services not covered under a state’s plan are any services not
paid for by Medicaid for that particular individual. These include services listed as covered
services in the state plan, as well as services the plan does not cover. They also include
services the individual received prior to becoming eligible for Medicaid, as well as services
received after becoming eligible.
Medical and remedial care expenses incurred prior to a period of Medicaid eligibility would
be deductible under the post eligibility process, since these expenses were incurred when the
person was ineligible for Medicaid and thus Medicaid did not pay for them. However, in
order for these old expenses to be deducted under the post eligibility process the individual
must be currently obligated to pay for these costs. As noted previously, these and other

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incurred medical and remedial expenses are subject to reasonable limits which may be
established by the state Medicaid program. However, those reasonable limits must ensure that
waiver participants are able to use their own funds to purchase necessary medical or remedial
care not covered; i.e., not paid for, by the state plan.
For example, it would be reasonable for a state to provide that only uncovered services
prescribed by a physician may be deducted. It would also be reasonable for states to impose
specific dollar limits for specific services or items, provided that these limits reflect annual
increases in the cost of medical care services and supplies. However, it would not be
reasonable for states to set an overall dollar limit, such as $50 per month, for all non-covered
services. Similarly, it would not be reasonable for states to impose a limit on the total number
of medically necessary services or items that an individual could deduct in any month.
The amount of a person’s income that remains after providing for the foregoing allowances is the
amount for which the individual is liable for the cost of waiver services.
Miller Trusts

Miller Trusts (also known as Qualifying Income trusts) are exempt from being treated under the normal
Medicaid Trust rules. The exemption allows individuals with excess income to exclude that income from
being counted for eligibility purposes by placing it in a Miller Trust. Miller Trusts apply only in certain
states; i.e., those states that provide Medicaid nursing facility services to individuals eligible under the
special income limit group, but do not pay for such services for the medically needy. However, the use of
Miller Trusts is not limited to individuals needing Medicaid for nursing facility services. Miller Trusts also
apply to individuals receiving HCBS waiver services.
While income placed in a Miller Trust is not counted in determining an individual’s Medicaid eligibility, it
still meets the SSI definition of “income”. Therefore, the income placed in the Trust is included when
determining the amount of an individual’s total income for post eligibility calculation purposes.
Specifically, the state calculates the amount of the individual’s total income, including income placed in
the Miller trust, and then makes the required deductions (maintenance allowance for the waiver participant,
spouse and family allowance, and an allowance for medical and remedial care services) under the post
eligibility process. Any income remaining after the required deductions is applied to the cost of HCBS
waiver services.
Many states have set their maintenance allowance for the waiver participant at 300 percent of the SSI
Federal Benefit Rate (FBR), effectively protecting all of the individual’s income for his or her own use.
However, if the individual has a Miller trust the income placed in the trust, when combined with his or her
other income, may result in total income that exceeds a state’s maintenance allowance. In that case, the
individual’s income up to 300 percent of the SSI FBR would still be protected. But, any income in excess
of 300 percent would be used in determining the patient liability under post eligibility.
To calculate the amount of the patient liability, the state would start with the amount of income that exceeds
the state’s maintenance allowance for the waiver participant, and then make the required deductions for a
spouse and family members, and for medical and remedial care services. Any remaining income is applied
to the cost of waiver services.
States may also increase the maintenance needs allowance for waiver participants above 300 percent of the
SSI/FBR and protect all of the individual’s income (including the income that is placed in the Miller trust).
In this case, we suggest the state use the following language when specifying the maintenance needs
allowance for individuals in the special home and community-based waiver eligibility group, “The

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maintenance needs allowance is equal to the individual’s total income as determined under the post
eligibility process which includes income that is placed in a Miller trust.

In summary, if the state recognizes Miller trusts, under the post-eligibility process for individuals
in the special home and community-based waiver group, the state has two options:
1. Protect amounts of income for the waiver participant’s maintenance needs and allowances
for his/her spouse, family members, and remedial and medical care not covered by
Medicaid, as described above; or
2. Increase the amount of the waiver participant’s maintenance allowance, as described
above.”
General Guidance Concerning Completing Appendix B-5
Whenever a waiver covers the §435.217 group, Item B-5-a must be completed. The web-based
application has been designed so that only the items a state must complete will appear, based on
the selection made in Item B-4-a (whether a state is a §1634, SSI Criteria or 209(b) state) and Item
B-5-a (whether a state uses spousal eligibility rules and applies spousal post eligibility rules).
Items B-5-b-1, B-5-b-2, B-5-c, and B-5-d apply for time periods before January 1, 2014 and after
September 30, 2019.
§1634 and SSI criteria states must complete Item B-5-b-1 or Item B-5-b-2 (depending on whether
spousal post-eligibility rules are used); §209(b) states must complete Item B-5-c-1 or Item B-5-c2 (again, depending on whether spousal post-eligibility rules are used). Item B-5-d is completed
only when a state employs spousal impoverishment rules under §1924 of the Act to determine the
eligibility of individuals with a community spouse and
- also elects to use spousal post-eligibility
rules as provided in §1924. When a state elects to use spousal post-eligibility rules, the allowance
for the personal needs of the individual that is provided in Item B-5-d takes the place of the
allowance for the individual under Item B-5-b or B-5-c when the individual has a community
spouse. Item B-5-d does not apply when a state does not elect to use spousal impoverishment rules
to determine the eligibility of individuals with a community spouse or when a state elects to use
spousal impoverishment rules to determine eligibility but decides not to use spousal
impoverishment post-eligibility rules. If this is the case, then Item B-5-d does not apply. Once a
state elects to use spousal impoverishment post-eligibility rules, it must apply these rules to all
waiver participants who have a community spouse. The state applies regular post-eligibility rules
to waiver participants who do not have a community spouse.
Items B-5-e, B-5-f, and B-5-g apply for the period beginning January 1, 2014 and extending
through September 30, 2019, when states must use spousal impoverishment rules whenever a
waiver covers the §435.217 group. If the state indicates in Item B-5-a that it uses spousal
impoverishment rules when they are not required, entry of B-5-e, B-5-f, and B-5-g is not
required. The entries in Item B-5-b-2 or B-5-c and in Item B-5-d will apply. Otherwise, §1634
and SSI criteria states must complete Item B-5-e and §209(b) states must complete Item B-5-f.
All states must complete Item B-5-g whenever a waiver covers the §435.217 group for the period
beginning January 1, 2014 and extending through September 30, 2019.

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Detailed Instructions for Completing Appendix B-5
Item B-5-a: Use of Spousal Impoverishment Rules
Instructions

If the waiver is effective during the period beginning January 1, 2014 and extending through
September 30, 2019, the state must check the first box in this section. This box indicates that
spousal impoverishment rules under §1924 of the Act are used to determine the eligibility of
individuals with a community spouse for the §435.217 group.
If the waiver is effective during a time period before January 1, 2014 or after September 30, 2019,
select whether spousal impoverishment rules are used to determine eligibility. If such rules are
employed, also select whether the state elects to apply spousal post-eligibility rules. When spousal
impoverishment eligibility rules are not used to determine eligibility or when spousal eligibility
rules are used to determine eligibility but the state does not elect to apply spousal post-eligibility
rules, complete Item B-5-b-1 or B-5-c-1 in the next section of the Appendix. When spousal
impoverishment eligibility rules are used to determine eligibility and spousal post-eligibility rules
are applied, proceed to the second section of the Appendix and complete Item B-5-b-2 or B-5-c-2
and Item B-5-d.
Technical Guidance

This item requires specifying whether spousal impoverishment rules are used to determine the
eligibility of individuals in the §435.217 group. When a person who is eligible as a member of a
§435.217 group and has a community spouse, the state treats the individual as if he or she is
institutionalized. This permit applying the spousal impoverishment post eligibility rules of §1924
of the Act (protection against spousal impoverishment) instead of the regular post-eligibility rules
under 42 CFR §435.726 and §435.735 to waiver participants with a community spouse. The §1924
post-eligibility rules provide for a more generous community spouse and family allowance than
the rules under 42 CFR §435.726 and §435.735. Spousal impoverishment post-eligibility rules can
only be used if the state uses spousal impoverishment eligibility rules. The response to this item
affects whether a state completes Items B-5-d, B-5-e, B-5-f, and B-5-g.

CMS Review Criteria
•

The state has specified that it uses spousal impoverishment rules under §1924 of the Act if
the waiver is effective at any time between January 1, 2014 and September 30, 2019 and the
state furnishes waiver services to individuals in the special home and community-based waiver
group under 42 CFR §435.217.

Item B-5-b-1/ Item B-5-b-2: Regular Post-Eligibility Treatment of Income: §1634 and SSI Criteria
State
Instructions
Both items pertain to §1634 and SSI Criteria States. Based on the response to Item B-5-a, complete either
Item B-5-b-1 or B-5-b-2.

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Technical Guidance

The entries in this item apply only for the time periods before January 1, 2014 and after September
30, 2019. However, this item must be completed for all waivers in §1634 or SSI Criteria States,
as indicated in Item B-4-a in Appendix B-4. The rules governing post-eligibility treatment of
income in §1634 and SSI criteria states are located at 42 CFR §435.726 (see Attachment C). All
parts of the item must be completed. Under each part of the item (i-iii), select only one of the prespecified choices. In the case of the allowance for the needs of an individual, the allowance may
be based on a standard contained in the state plan (e.g., SSI standard) or spelling out another basis
for the allowance. There is no ceiling on the amount of this allowance. States have latitude in
establishing the maintenance allowance for the individual. As discussed previously, the amount
of the allowance may vary depending on the needs of the individual or groups of individuals.
With respect to the allowances for the community spouse and the participant’s family, the choices
available are defined under the provisions of 42 CFR §435.726. Select one of the choices specified
for the community spouse and the family. With respect to incurred medical and remedial care
expenses, indicate whether the state deducts all such expenses or imposes a reasonable limit on the
amount that may be deducted and specify the nature of the limit.
If the amount protected for the individual’s maintenance allowance is equal to or greater than the
amount calculated as the individual’s total income under the post eligibility process, select the “not
applicable” choice under the allowance for a spouse and a family. If the state is a Miller Trust
State, see the preceding discussion of Miller Trusts.
When a state uses spousal impoverishment rules to determine eligibility and elects to use spousal
post-eligibility rules, the state still must address post-eligibility treatment of income in the case of
waiver participants who do not have a spouse by completing Item B-5-b-2. Item B-5-b-2 provides
for specifying an allowance for a spouse who does not meet the definition of a community spouse
under the provisions of §1924 of the Act. As a general matter, such an allowance is not provided
because spousal post-eligibility rules will apply and the “not applicable” choice should be selected.
If, however, the state provides for such an allowance, it must specify the circumstances when an
allowance for a spouse will be made under regular post-eligibility rules. CMS will review these
circumstances to determine whether such an allowance may be made. Spousal post-eligibility
rules must be used in all instances to which they apply. A state may not provide for the use of
alternative rules to its spousal post-eligibility rules.
Item B-5-c-1/Item B-5-c-2: Regular Post-Eligibility Treatment of Income: §209(b) State
Instructions

Both items pertain to §209(b) states. Based on the response to Item B-5-a, complete either Item
B-5-c-1 or B-5-c-2.
Technical Guidance

The entries in this item apply only for the time periods before January 1, 2014 and after September
30, 2019. However, this item must be completed for all waivers in §209(b) states. Each item
parallels the corresponding item for §1634 and SSI criteria states, but some of the choices differ,
based on the requirements in 42 CFR §435.735 which govern post-eligibility in §209(b) states.
See the technical guidance for Item B-5-b-1/ItemB-5-b-2.
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Item B-5-d: Post-Eligibility Treatment of Income Using Spousal Impoverishment Rules
Instructions

This item must be completed whenever a state uses spousal impoverishment rules to determine
eligibility and elects to apply spousal post-eligibility rules.

---

Technical Guidance

In this item, the state establishes the post-eligibility rules that it will apply to waiver participants
for whom eligibility has been determined using spousal impoverishment rules, provided that the
state also has elected to apply spousal post-eligibility rules. In the case of individuals who do not
have a community spouse as defined in §1924 of the Act, regular post-eligibility rules (as specified
in Item B-5-b-2 or Item B-5-c-2) apply.
The spousal impoverishment post-eligibility rules provide for a more generous community spouse
and family allowance than the rules under 42 CFR §435.726 and 42 CFR §435.735. The spousal
protection rules also provide for a personal needs allowance (PNA) described in §1902(q)(1) of
the Act for the needs of the institutionalized individual. This allowance is a "reasonable amount
for clothes and other personal needs of the individual...while in an institution." For an
institutionalized individual, this may be as low as $30 per month. However, unlike the
institutionalized individual whose room and board are covered under Medicaid, the personal needs
of a waiver participant must include a reasonable amount for food, shelter, clothing and other
customary living expenses. The minimum monthly PNA is not sufficient to meet these needs when
the individual lives in the community.
Therefore, states that elect to serve HCBS waiver participants with community spouses under the
§1924 spousal rules must use as the personal needs allowance either the maintenance amount
which the state has elected under 42 CFR 435.726 or 42 CFR 435.735 (as appropriate), or an
amount that the state can demonstrate is a reasonable amount to cover the individual's maintenance
needs in the community. If the PNA amount differs from the amount specified for the individual
under regular post-eligibility rules, explain in Item B-5-d-ii why this amount is reasonable to meet
the needs of the participant. Also, specify the state’s policies with respect to the deduction of
incurred expenses for necessary medical and remedial care not covered under the state plan.
Item B-5-e: Regular Post-Eligibility Treatment of Income: SSI State - 2014 through 2018
Instructions

Complete the item if required based on Item B-4-a and Item B-5-a. See General Guidance
Concerning Completing Appendix B-5.
Technical Guidance

The entries in this item apply only for the period starting January 1, 2014 and extending through
September 30, 2019. This item applies to waivers in §1634 or SSI Criteria States, as indicated in
Item B-4-a in Appendix B-4. The rules governing post-eligibility treatment of income in §1634
and SSI criteria states are located at 42 CFR §435.726 (see Attachment C). All parts of the item
must be completed. Under each part of the item (i-iii), select only one of the pre-specified choices.
In the case of the allowance for the needs of an individual, the allowance may be based on a
standard contained in the state plan (e.g., SSI standard) or spelling out another basis for the
allowance. There is no ceiling on the amount of this allowance. States have latitude in establishing
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the maintenance allowance for the individual. As discussed previously, the amount of the
allowance may vary depending on the needs of the individual or groups of individuals.
With respect to the allowances for the community spouse and the participant’s family, the choices
available are defined under the provisions of 42 CFR §435.726. Select one of the choices specified
for the community spouse and the family. With respect to incurred medical and remedial care
expenses, indicate whether the state deducts all such expenses or imposes a reasonable limit on the
amount that may be deducted and specify the nature of the limit.
If the amount protected for the individual’s maintenance allowance is equal to or greater than the
amount calculated as the individual’s total income under the post eligibility process, select the “not
applicable” choice under the allowance for a spouse and a family. If the state is a Miller Trust
State, see the preceding discussion of Miller Trusts.
Even though the state must use spousal impoverishment rules to determine eligibility and must use
spousal post-eligibility rules, the state still must address post-eligibility treatment of income in the
case of waiver participants who do not have a spouse. Item B-5-e provides for specifying an
allowance for a spouse who does not meet the definition of a community spouse under the
provisions of §1924 of the Act. As a general matter, such an allowance is not provided because
spousal post-eligibility rules will apply and the “not applicable” choice should be selected. If,
however, the state provides for such an allowance, it must specify the circumstances when an
allowance for a spouse will be made under regular post-eligibility rules. CMS will review these
circumstances to determine whether such an allowance may be made. Spousal post-eligibility
rules must be used in all instances to which they apply. A state may not provide for the use of
alternative rules to its spousal post-eligibility rules.
Item B-5-f: Regular Post-Eligibility Treatment of Income: §209(b) State – 2014 through 2018
Instructions

Complete the item if required based on Item B-4-a and Item B-5-a. See General Guidance
Concerning Completing Appendix B-5.
Technical Guidance

The entries in this item apply only for the period starting January 1, 2014 and extending through
September 30, 2019. This item applies to waivers in §209(b) states, as indicated in Item B-4-a in
Appendix B-4. Each item parallels the corresponding item for §1634 and SSI criteria states, but
some of the choices differ, based on the requirements in 42 CFR §435.735 which govern posteligibility in §209(b) states. See the technical guidance for Item B-5-e.
Item B-5-g: Post-Eligibility Treatment of Income Using Spousal Impoverishment Rules – 2014
through 2019
Instructions

Complete the item if required based on Item B-4-a and Item B-5-a. See General Guidance
Concerning Completing Appendix B-5.
Technical Guidance

The entries in this item apply only for the five-year period starting January 1, 2014 and extending
through September 30, 2019. In this item, the state establishes the post-eligibility rules that it will
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apply to waiver participants for whom eligibility has been determined using spousal
impoverishment rules. In the case of individuals who do not have a community spouse as defined
in §1924 of the Act, regular post-eligibility rules (as specified in Item B-5-e or Item B-5-f) apply.
The spousal impoverishment post-eligibility rules provide for a more generous community spouse
and family allowance than the rules under 42 CFR §435.726 and 42 CFR §435.735. The spousal
protection rules also provide for a personal needs allowance (PNA) described in §1902(q)(1) of
the Act for the needs of the institutionalized individual. This allowance is a "reasonable amount
for clothes and other personal needs of the individual...while in an institution." For an
institutionalized individual, this may be as low as $30 per month. However, unlike the
institutionalized individual whose room and board are covered under Medicaid, the personal needs
of a waiver participant must include a reasonable amount for food, shelter, clothing and other
customary living expenses. The minimum monthly PNA is not sufficient to meet these needs when
the individual lives in the community.
Therefore, states that elect to serve HCBS waiver participants with community spouses under the
§1924 spousal rules must use as the personal needs allowance either the maintenance amount
which the state has elected under 42 CFR 435.726 or 42 CFR 435.735 (as appropriate), or an
amount that the state can demonstrate is a reasonable amount to cover the individual's maintenance
needs in the community. If the PNA amount differs from the amount specified for the individual
under regular post-eligibility rules, explain in Item B-5-g-ii why this amount is reasonable to meet
the needs of the participant. Also, specify the state’s policies with respect to the deduction of
incurred expenses for necessary medical and remedial care not covered under the state plan.

Post Eligibility Treatment of Income Under Concurrent Waivers
Technical Guidance

Under the post-eligibility process, the income remaining after the required deductions are taken
can only be applied to the cost of home and community-based waiver services. Excess income
cannot be applied to the cost of regular Medicaid state plan services. This poses a problem in a
capitated system because it is difficult to identify and separate 1915(c) waiver services for each
individual.
Since excess income can only be applied to the cost of 1915(c) waiver services, the state may elect
to use one of the following options regarding the application of excess income under a capitated
system:
•

•

•

The state could increase the amount of the waiver participant’s maintenance needs
allowance to an amount equal to or greater than the amount of income an individual can
have and be eligible under 42 CFR 435.217(for Miller Trust States this includes income
that is placed in a Miller trust);
The state could develop a method to carve out/identify the cost of home and communitybased waiver services from the cost of other Medicaid services so that the individual’s
patient liability is applied only to the cost of home and community-based waiver services;
or
The state could use the portion of the capitated payment rate that is attributable to home
and community based waiver services as the “dollar” amount of waiver services that the

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individual is liable for since the capitated portion of the rate that is attributable to home
and community based waiver services is the actual amount that the state pays to the
managed care organization/entity for these services.
If the state elects to increase the maintenance needs allowance for the waiver participant, the state
would provide this information in Appendix B-5, Post Eligibility Treatment of Income under the
allowance for the maintenance needs of the waiver participant under the following formula,
electing the appropriate sections based on the state classification and whether or not the state is
using the spousal impoverishment post eligibility rules.
If the state develops a method to carve out/identify the cost of home and community-based waiver
services from the cost of other Medicaid services so that the individual’s patient liability is applied
only to the cost of home and community-based waiver services, this methodology should be
specified in Appendix B-5 under the allowance for the needs of the waiver participant.
If the state uses capitated payment rate that is attributable to home and community-based waiver
services as the “dollar” amount of waiver services that the individual is liable it must provide an
explanation in Appendix B-5 under the allowance for the needs of the waiver participant that takes
into account the following: Under a capitated system, the “benefit” becomes the amount the state
is expending on behalf of the beneficiary, or the capitated payment and not necessarily the actual
services that the individual receives. Therefore, states can isolate the amount of the capitation rate
that applies to waiver services. When a state develops a capitation rate, factors that are used may
include geographic area, age, target group,
level or intensity of services. Thus, a state may have more than one capitation payment rate for
the cost of home and community-based waiver services. If a state uses these factors in developing
its rate, these amounts could be used for the amount of the waiver services that an individual uses
in determining his/her patient liability.

CMS Review Criteria (Items B-5-b – B-5-g)
•
•
•
•

The state has completed the appropriate Regular Post-Eligibility item, based on the
selections made in Item B-5-a and Item B-4-a in Appendix B-4.
For Regular Post Eligibility, the protected amounts comply with 42 CFR §435.726 or
42 CFR §435.735 as applicable.
When the state imposes a limit on the amount of incurred medical or remedial care
expenses that may be deducted, the limit is specified and is reasonable.
For Spousal Impoverishment Post Eligibility, if the personal needs amount differs from
the amount protected under regular post-eligibility rules, there is an explanation as to
why the amount is reasonable to meet the maintenance needs of the waiver participant.

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

Overview

In Appendix B-6, waiver level of care evaluation and reevaluation processes are specified. Only
individuals who are determined to require an institutional level of care specified for the waiver
may be enrolled in the waiver. The process that is used to make this determination for new waiver
entrants is termed “evaluation.” The evaluation must find that there is a reasonable indication that
the individual would need services in the appropriate level of care within the near future (one
month or less). The periodic review of a waiver participant’s condition to verify that the individual
continues to require the level of care is termed “reevaluation.”
Waiver level of care determinations must be consistent with those made for the appropriate
institutional level of care under the state plan. Level of care is typically assessed using a
standardized instrument or form that evaluates and re-evaluates an individual’s need for the level
of care. Most commonly, states utilize the same level of care evaluation instrument and procedures
for the waiver as are used for hospital, NF, or ICF/IID services, as applicable. When an individual
is determined not to require a level of care specified in the waiver, the person must be afforded the
opportunity to request a Fair Hearing as provided in Appendix F-1.

Detailed Instructions for Completing Appendix B-6
Item B-6-a: Reasonable Indication of Need for Services
Instructions

Specify: (a) the minimum number of services (at least one) that an individual must require in order
to be determined to need waiver services and (b) the minimum frequency services must be needed
- at least monthly or require monthly monitoring when services are furnished on less than a
monthly basis. The state may establish a minimum frequency, other than monthly, that a
participant must require services in order to be determined to need waiver services or require
monthly monitoring when services are furnished on less than a monthly basis.
Technical Guidance

In order for an individual to be considered to require a level of care specified for the waiver, it
must be determined that the person: (a) requires at least one waiver service (as evidenced by the
service plan) and (b) requires the provision of waiver services at least monthly or, if less frequently,
requires monthly monitoring (as documented in the service plan) to assure health and welfare.
Individuals may not be enrolled in a waiver for the sole purpose of enabling them to secure
Medicaid eligibility as members of the §435.217 group. Entrance to the waiver is contingent on a
person’s requiring one or more of the services offered in the waiver in order to avoid
institutionalization.
The need for the level of care specified for the waiver must be demonstrated by the individual’s
needing one or more of the services offered by the waiver and the need to receive such services at
least monthly. When services are not required on at least a monthly basis, the need for the level of
care may instead be based on the need for at least monthly monitoring of the person’s health and
welfare and include periodic “face-to-face” monitoring of the health and welfare of the participant.
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This monitoring must be consistent with the monitoring procedures as specified in Appendix D-2
of the application. Such monitoring may be conducted through the waiver or through another
means (e.g., targeted case management). The need for monitoring must be specified in the person’s
service plan and its performance recorded in the waiver record.
Post-entrance to the waiver, when a waiver participant is found not to be utilizing any waiver
services for an extended period, the state should conduct a re-evaluation of level-of-care to reassess
the need for waiver services.
CMS Review Criteria
The waiver specifies that:
• An individual must require at least one waiver service.
•

An individual must require the provision of waiver services monthly or other minimum
frequency as established by the state or, if less frequently than monthly, require monthly
monitoring to assure health and welfare.

Item B-6-b: Responsibility for Performing Evaluations and Reevaluations
Instructions

Select the agency that performs evaluations and reevaluations of level of care (i.e., the agency that
makes the level of care determination).
Technical Guidance

The determination that an individual requires a level of care specified in the waiver may be made
directly by the Medicaid agency or another government agency that has been designated by the
Medicaid agency in accordance with 42 CFR Section 431.10. In the case of the latter, the Medicaid
agency must oversee the performance of the other agency, including ensuring that applicable level
of care criteria have been properly applied, and should describe this in Appendix A of the waiver
application.
When a different agency performs the initial evaluation of level of care and reevaluations, select
the “other” choice and specify the agency that performs the initial evaluation and the agency that
performs the reevaluation.
This item focuses on the agency that makes the level of care determination. Other entities (e.g.,
case management providers) may be responsible for performing assessments, gathering the
information that is necessary to make this determination and submitting a level of care instrument
or form to the state. Do not include such entities in the response to this item. The role that such
entities play in the level of care process may be described in Item B-6-h. Pre-entrance activities
associated with the initial evaluation of level of care may not be claimed as a waiver service since
federal financial participation (FFP) for waiver services may only be claimed once a person has
entered the waiver. The expenses for conducting such activities may be claimed as an
administrative expense or, if provided in the state plan, under the coverage of Targeted Case
Management services. Please note that administrative costs, necessary for the efficient
administration of the Medicaid state Plan, must be in accordance with the CMS approved Medicaid

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cost allocation plan. Cost allocation plans are not approved via approval of the HCBS waiver
application.
CMS Review Criteria
• The agency that performs evaluations and reevaluations of level of care comports with 42
CFR Section 431.10.
Item B-6-c: Qualifications of Individuals Performing Initial Evaluation
Instructions
In the text field, specify the educational/professional qualifications of individuals who perform the initial
evaluation of level of care for waiver applicants.
Technical Guidance

42 CFR §441.303(c)(1) requires that the waiver specify the credentials (minimum qualifications)
of level of care evaluators. The state has latitude in determining these credentials. However, the
qualifications should be appropriate for the waiver’s target population. Examples might include a
physician, registered nurse, licensed social worker, or qualified developmental disability
professional. The qualifications of individuals who perform re-evaluations are specified in Item
B-6-h.
CMS Review Criteria
The specified qualifications of evaluators are appropriate to the target groups specified in the
waiver.
Item B-6-d: Level of Care Criteria
Instructions

In the text field, fully specify the level of care criteria that are used to evaluate and reevaluate
whether an individual needs services through the waiver and that serve as the basis of the state’s
level of care instrument/tool. Specify the level of care instrument/tool that is employed.
Technical Guidance

In this item specify the criteria that are used to evaluate/re-evaluate level of care. The description
of the criteria should identify the factors that are assessed in evaluating level of care and the scoring
system (if applicable) that is employed to determine level of care. Do not “paste” an
instrument/tool or applicable protocols or regulations into the “text field” (when the web-based
application is used, any material that is pasted into a text field will lose its underlying formatting).
In addition to the full level of care criteria, the response may also include citations of applicable
state laws, regulations, and policies. When such citations are made, the documents must be
available through the Medicaid agency or the operating agency (if applicable) to CMS upon
request. Also specify the instruments/tools that are used (e.g., by referencing the name of the
instrument or form or the name of the automated system).
States should keep in mind that the ICF/IID level of care instrument for waiver or institution should
not limit participation to those with certain conditions but instead should encompass persons with
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intellectual disability and related conditions, as provided in 42 CFR §435.1009. (See discussion
in section B-1-a). Waiver participation may be limited to individuals with certain conditions (e.g.,
autism), but those conditions must be explicitly specified in Appendix B-1-b, not embedded in a
level of care evaluation.
When ICF/IID level of care is evaluated, it is not required that a physician recommend, certify, or
verify that the individual should receive the level of care furnished through the waiver. Similarly,
a physician certification or recommendation is not required for nursing facility level of care.
CMS Review Criteria
• The factors used to evaluate and re-evaluate level of care are consistent with and relevant
to the level(s) of care specified for the waiver.
• ICF IID level of care is consistent with 42 CFR 435.1009, persons with IID or related
conditions. The level of care evaluation tool is functional and does not limit participation
to individuals with certain conditions.
Item B-6-e: Level of Care Instrument(s)
Instructions

Select whether the instrument/tool that is used to evaluate level of care for the waiver differs from
the instrument/tool used to evaluate institutional level of care. If the tools are different, furnish
the information specified.
Technical Guidance

When the waiver level of care instrument/tool differs from the instrument/tool used to determine
institutional level-of-care, 42 CFR §441.303(c)(1) requires the state to describe how and why they
differ and explain how the outcome of the level of care determination under the waiver is reliable,
valid, and fully comparable to the outcome for institutional evaluation. In particular, the state must
be able to demonstrate that individuals who meet level of care via the application of the waiver
instrument also would meet level of care when the institutional instrument is employed. Usually,
states employ the same instrument/tool to evaluate level of care for the waiver and institutional
services.
CMS Review Criteria
The waiver documents and provides evidence that when a different level of care instrument/tool
is used for the waiver and institutional services, the outcomes of the evaluations are equivalent.
Item B-6-f: Process for Level of Care Evaluation/ Reevaluation
Instructions
In the text field, describe the process for evaluating waiver applicants for their need for the level of care
under the waiver. If the reevaluation process differs from the evaluation process, describe the differences.
Technical Guidance

The description of the process to evaluate/reevaluate the need for a level of care specified in the
waiver should include a description of the assessments that are performed and the information that
is gathered as part of the process and who is responsible for performing or arranging for these
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assessments or obtaining the necessary additional information. The process used for the reevaluation of level of care does need not exactly match the process used for the initial evaluation
of level of care, although the level of care criteria that are applied must be the same. For example,
it may be necessary to obtain a psychological assessment to determine that a person who has
applied for services in a developmental disabilities waiver program has intellectual disability.
However, a state need not require that such an assessment be performed as part of re-evaluation
once the person’s diagnosis of intellectual disability has been confirmed. For re-evaluation, a
state’s criteria may take into consideration the needs of the individual without the support provided
through the waiver. When the re-evaluation process differs from the initial evaluation process, it
must be sufficient to confirm that the person continues to require the level of care specified in the
waiver, including the continuing need for the provision of waiver services. A state may not provide
for the presumptive continuation of an individual on the waiver. The re-evaluation process must
provide for an affirmative finding that the individual continues to require the level of care.
CMS Review Criteria
• The waiver describes the types of assessments and information that is used in support of
the determination of level of care and who is responsible for ensuring that this information
is obtained.
• When the re-evaluation process differs from the evaluation process, appropriate
information is gathered to confirm that the waiver participant continues to require a level
of care specified in the waiver.
Item B-6-g: Re-evaluation Schedule
Instructions

Select the minimum frequency for the performance of level of care re-evaluation.
Technical Guidance

42 CFR §441.303(c)(4) requires that the state specify how often level of care re-evaluations are
performed. In response to this item, specify the minimum frequency for the performance of level
of care re-evaluations. Level of care must be re-evaluated no less frequently than annually. Reevaluation of level of care may be performed at any time due to a change in a person’s condition
or service needs.
CMS Review Criteria
The waiver specifies that level of care will be re-evaluated at least annually.
Item B-6-h: Qualifications of Individuals Who Perform Re-evaluations

Instructions
Select whether the qualifications of individuals who perform level of care re-evaluations are the same as
the qualifications of the persons who perform initial evaluations. If the qualifications are different,
specify the qualifications of individuals who perform re-evaluations in the text field.
Technical Guidance
Individuals who may perform re-evaluations need not have the same qualifications as persons who
perform initial evaluations. For example, a state may require that a physician perform the initial
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evaluation but permit a nurse to perform the re-evaluation. The qualifications should be appropriate for
the waiver’s target population.

CMS Review Criteria
The qualifications of individuals who perform re-evaluations are appropriate for the target
groups specified in the waiver.
Item B-6-i: Procedures to Ensure Timely Re-Evaluations
Instructions
In the text field, specify the procedures that are used to ensure timely re-evaluations of level of care.
Technical Guidance
42 CFR §441.303(c)(4) requires that the state specify its procedures to ensure that the level of care reevaluations is performed on a timely basis. Timely re-evaluation means that the re-evaluation is completed
prior to the end date of the previous evaluation to prevent a break in the continuity of a participant’s services.
Eligibility for waiver services hinges on the determination of the need for a level of care specified in the
waiver. If a re-evaluation is not performed timely, it may have an adverse impact on the participant. In
addition, the state will not be able to claim FFP for the services furnished to the participant until waiver
eligibility is restored and may not claim FFP for services delivered during the period in which level of care
has lapsed. Examples of possible procedures include the use of tickler files, edits in computer systems, or
components parts of case management.

CMS Review Criteria
The procedures specified ensure that re-evaluations will be performed on a timely basis.
Item B-6-j: Maintenance of Evaluation/Reevaluation Records

Instructions
In the text field, specify the location(s) where records of evaluations and reevaluations of level of care are
maintained.
Technical Guidance
Records of waiver participant evaluations and re-evaluations must be kept in written (printed) or
electronically retrievable form for a minimum period of three years after the end of the waiver year when
the evaluation or re-evaluation was performed. State law may dictate that these records be kept for a longer
period. These records must be readily retrievable, including when requested by CMS. As provided in 42
CFR §441.303(c)(3), the location(s) where records of evaluations and reevaluations of level of care are
maintained must be specified in the waiver. Records may be maintained at the Medicaid agency, the
operating agency (if applicable), in case manager records, and/or in other locations (e.g., waiver provider
offices). It is advisable that a set of records be maintained by a state agency (or, if applicable, by a state
contractor) rather than only locally in order to ensure that the records are retrievable.

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Quality Improvement: Level of Care

Level of Care (LOC) Determination
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 processes and instruments described in the approved waiver are applied appropriately
and according to the approved description to determine participant LOC.
Instructions
The QIS must describe how the state Medicaid Agency will determine that each waiver
assurance (and its associated component elements) is met. The waiver assurance and
component elements are listed above. For each component element, this description must include:
•

•
•

Activities or processes that are related to discovery and remediation, i.e., review,
assessment or monitoring processes; who conducts the discovery or remediation activities
and with what frequency. These monitoring activities provide the foundation for quality
improvement by generating information regarding compliance, potential problems and
individual corrective actions. The information can be aggregated and analyzed to measure
the overall system performance in meeting the waiver assurances. The types of information
used to measure performance, should include relevant quality measures/indicators.
The entity or entities responsible for reviewing the results (data and information) of
discovery and remediation activities to determine whether the performance of the system
reflects compliance with the assurances; and,
The frequency at which system performance is measured.

Technical Guidance
This QIS element focuses on discovery and remediation activities, that is, processes to assess,
review, evaluate or otherwise analyze a program, process, operation, or outcome. Specifically, the
evidence produced as a result of discovery and remediation activities should provide a clear picture
of the state’s compliance in meeting an assurance.

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CMS Review Criteria
• The discovery of compliance with this assurance and the remediation of identified
problems must address:
1) How the Medicaid agency assures compliance with the following level of care
subassurances:
2) An evaluation for LOC is provided to all applicants for whom there is reasonable
indication that services may be needed in the future.
3) The LOC of enrolled participants are reevaluated at least annually or as
specified in the approved waiver.
4) The processes and instruments described in the approved waiver are applied
appropriately and according to the approved description to determine participant
LOC;
5) How frequently oversight is conducted; and
6) The entity (or entities) responsible for the discovery and remediation activities.

Overview

Appendix B-7: Freedom of Choice

As provided in §1915(c)(2)(C) of the Act and 42 CFR §441.302(d), individuals have freedom of
choice in the selection of home and community-based services or institutional services. The
individual’s choice must be documented during entrance into the waiver program. When an
individual is not given freedom of choice of institutional or home and community-based services,
the person must be afforded the opportunity to request a Fair Hearing as provided in Appendix F1.
A state must inform the person of the feasible alternatives under the waiver so that the individual
(or the person’s legal representative) can make an informed choice. Feasible alternatives may only
be determined after the assessment of an individual's needs and an evaluation of level of care.
Feasible alternatives mean the types of waiver services that would be available to the individual to
address the person’s assessed needs, subject to the development of the person’s service plan. It is
not expected that an individual will be offered entrance to the waiver unless the assessment
indicates that person’s needs (including assuring the person’s health and welfare) can be met
through the provision of waiver services in combination with state plan, other formal and informal
supports, and appropriate safeguards. Appropriate safeguards may include ensuring that the
individual is informed of alternatives and risks and responsibilities, as evidenced, for example, by
the execution of a risk agreement (see Appendix D-1). In this Appendix, the process by which
individuals are afforded freedom of choice is specified.

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Detailed Instructions for Completing Appendix B-7
Item B-7-a: Procedures
Instructions

In the text field, describe the procedures that are followed to inform the individual (or the person’s
legal representative) of the feasible alternatives under the waiver and to document the individual’s
choice of home and community-based services or institutional services.
Technical Guidance

42 CFR §441.303(d) requires that the waiver describe how eligible individuals are informed of the
feasible alternatives available under the waiver and how such individuals are permitted to choose
either institutional services or home and community-based services. In addition to describing the
procedures for how these activities are performed, the description also should identify the entity
or individual responsible for performing these activities. The procedures should include ensuring
that the individual (or the individual’s legal representative) exercises an informed choice. This
may entail orally explaining the feasible alternatives and the right to exercise freedom of choice
or communicating with the individual through alternative means. A record must be established that
documents the individual’s choice. Include in the description the name of the form/document that
is used to document that the person has been informed of feasible alternatives and has been
permitted to choose between waiver and institutional services.
CMS Review Criteria
• The procedures described ensure that individuals are provided information about the
services that are available under the waiver and that they have the choice of institutional
or home and community-based services prior to the enrollment into the waiver program
• The waiver identifies the entity or individual responsible for providing information about
feasible alternatives and informing the individual, or their legal representative, about their
freedom of choice between waiver and institutional services.
Item B-7-b: Maintenance of Forms
Instructions

In the text field, specify the locations where copies of the forms that document that the participant
has been informed of feasible alternatives and has exercised choice in the selection of waiver or
institutional services are maintained.
Technical Guidance

States are not required to submit copies of the form that documents that an individual has been
informed of the feasible alternatives under the waiver and has exercised freedom of choice in the
selection of waiver or institutional services. However, the form (or forms) identified in Item B-7c must be available from the Medicaid agency or the operating agency (if applicable) to CMS upon
request.
The requirements for maintaining records concerning freedom of choice are the same as those that
apply to the maintenance of documentation of level of care evaluations and re-evaluations.

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

Overview

Recipients of federal assistance (including Medicaid) are required to provide oral and written
assistance to persons who are limited English proficient (LEP) to aid them to access and use
services in accordance with 42 CFR 435.905(b).

Detailed Instructions for Completing Appendix B-8

Instructions
In text field, describe the accommodations that are made for LEP persons who seek waiver
services and post-entrance for LEP waiver participants.
Technical Guidance
Oral and written assistance to LEP persons may take various forms, including hiring bilingual
staff, arranging for interpreters (interpreter services may be offered as a waiver service), and
translating written materials when a significant number or percentage of program beneficiaries
require information in a language other than English.
CMS Review Criteria
A variety of accommodations are described, both in conjunction with the waiver entrance
process and for communicating with LEP persons on an ongoing basis (e.g., by providing for
bilingual case managers).

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Appendix C: Participant Services

Brief Overview

Appendix C specifies the services that are provided in the waiver. The Appendix has four
components:
• Appendix C-1 is a summary listing of the services covered in the waiver;
• Appendix C-2 contains general service specifications;
• In Appendix C-3, the specifications of each waiver service are detailed; and,
• In Appendix C-4, the limitations (if any) that apply to the overall amount of waiver services
are specified.
CMS policies and guidance concerning the coverage of waiver services are discussed in detail in
the instructions for Appendix C-3.

Web-Based Application

The web-based waiver application combines Appendix C-1 and Appendix C-3 into a single
module. In the web-based application, services are added one-by-one and a master list of services
is created that is the equivalent of Appendix C-1. In addition, the web-based application uses the
master list of services to populate the tables in Appendix J-2 that must be completed in order to
calculate Factor D in the cost-neutrality demonstration. In addition, there also are linkages between
the Appendix C-1/C-3 module and Appendix E with respect to waiver services that may be
participant-directed.

Appendix C-1: Summary of Services Covered

Overview

In Appendix C-1, the services offered under the waiver are listed. Waiver services are categorized
into four types. Each of these services is further specified in Appendix C-3. When case
management is not provided as a waiver service, information also must be provided about how
case management is furnished to waiver participants.

Detailed Instructions for Completing Appendix C-1
Item C-1-a: Waiver Services Summary
Instructions

In the table, indicate whether the waiver includes one or more of the listed statutory services. If a
statutory service has an alternate title, insert the title. Also list the titles of other waiver services,
extended state plan services, and supports for participant direction that are covered in the waiver
(as applicable). See the technical guidance for a discussion of the classification of waiver services
by type. In the web-based application, drop-down menus are used to select and classify services.
Technical Guidance

This table serves as a master summary list of the services covered in the waiver. A service
specification template (Appendix C-3) must be completed for each service listed in the summary.
In addition, this table serves as the basis for the list of waiver services that are included in the
estimate of the average per capita cost of waiver services in Appendix J-2 of the application.
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The table is divided into four parts: (a) services that are specifically authorized or otherwise
included in §1915(c) of the Act (“statutory services”); (b) “other services” not specified in the
statute for which the state requests the authority to provide under the provisions of 42 CFR
§440.180(b)(9); (c) extended state plan services; and (d) supports for participant direction. Each
of these classifications is described as follows:
1. Statutory Services
This table lists each of the services that are specifically authorized or otherwise included in
§1915(c) of the Act. The core definitions of these services (included in the attachment to this
Appendix) describe the commonly understood scope and nature of each of these services. Indicate
whether the waiver includes these services. The scope of the service (as specified in Appendix C3) does not have to exactly match the core service definition. So long as the specified scope of the
service aligns with the core service definition, the service is considered a statutory service.
Similarly, it is not necessary that the title for the service be the same as statutory title. For example,
if the scope of case management services aligns with the core definition, the waiver is considered
to include this service, even though the state may use “care management” or “support
coordination” as its title. When an alternative title is used, enter it in the text field provided. Also
use the alternative title in the service specification template in Appendix C-3 and in the cost
neutrality calculation table in Appendix J.
When case management services are not included as a waiver service, complete Items C-1-b and
C-1-c (if applicable) (see below). Please note that when case management is provided as an
administrative function, administrative costs must be in accordance with the approved cost
allocation plan. Cost allocation plans are not approved via this waiver application.
2. Other Services
42 CFR §440.180(b)(9) permits a state to request the authority to offer “other” services that are
not expressly authorized in the statute as long as it can be demonstrated that the service will be
necessary to assist a waiver participant to avoid institutionalization and function in the community.
In this part of the table, list the services that are offered in the waiver that are not statutory services.
However, in this list, do not include “extended state plan” or “supports for participant direction”
services, even though they are considered to be types of “other services.” These services are listed
in the next two parts of the table. Some non-statutory services are included in the core service
definitions (e.g., assisted living, personal emergency response system). However, the core service
definitions are by no means inclusive of all the types of services and supports that states may offer
in waivers. Again, if necessary, insert additional rows into this part of the table to accommodate
all the other services offered through the waiver.
3. Extended State Plan Services
The services included in a waiver must not duplicate services that are provided under the state
plan. However, through a waiver, a state may augment the services that it provides under the state
plan. When a state wants to enhance the amount, duration or frequency of a state plan service but
otherwise the scope of the service is the same as the state plan service, the service is considered an
“extended state plan” service. For example, under a waiver, the number of home health aide visits
that are allowed under the state plan can be augmented. The amount chargeable as waiver services
is the amount incurred after any limits in state plan services are exhausted. In this part of the table,
list any other extended state plan services that are included in the waiver. In the service
specifications for these services, note that the service is covered under the state plan and describe
how the amount, duration or frequency of the service differs from the state plan. While a waiver

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service may be similar in scope to a state plan service, it would be considered an “other” service
rather than an extended state Plan service if the service delivery modality (i.e., availability of
participant direction) is different under the waiver.
Services that a state chooses not to cover under their state plan (optional state plan services) but
are included under a waiver, are considered “other” services or statutory services (e.g., personal
care) as the case may be, not extended state plan services. When a service is covered under the
waiver that is similar to but has a different scope and/or uses different types of providers than the
service covered under the state plan, it is considered an “other” service, not an extended state plan
service. A service is not considered to be an extended state plan service if it cannot be reimbursed
in whole or in part under the state plan.
If an extended state plan coverage is proposed in order to provide a service in an amount greater
than permitted under the state plan, the coverage may only apply to adults (individuals age 21 and
older). When children are served in a waiver, the services that are included in the waiver must take
into account the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit
requirements. Federal requirements concerning EPSDT mandate that Medicaid eligible children
receive all medically necessary services coverable under §1905(a) of the Act regardless of whether
such services are specifically included in the state plan. The waiver may not provide for the
coverage of services that could be furnished to children under EPSDT. If a waiver targets children
exclusively, it may not provide for the coverage of any service that can be offered through the state
plan.
4. Supports for Participant Direction
As discussed in more detail in the instructions for Appendix E, when a state provides the
opportunity for participants to direct some or all of their waiver services, the state must make
available certain supports to waiver participants who do so. These supports include “financial
management services” and “information and assistance” to support waiver participants in directing
and managing their services. The core service definitions include “financial management services”
and “information and assistance in support of participant direction.”
When the waiver provides opportunities for participants to direct some or all of their waiver
services, indicate in this part of the table whether either of these supports (along with any other
supports for participant direction as defined by the state) are covered as waiver services. Please
note that these supports for participant direction do not necessarily have to be provided as a distinct
waiver service (for example, supports for participant direction may be offered in conjunction with
the provision of waiver case management services. Both types of supports also may be furnished
as administrative activities rather than as waiver services. When these supports are not covered as
waiver services, their provision is described in Appendix E.
§1915(b)/§1915(c) Concurrent Waivers: §1915(b)(3) Services
When the HCBS waiver operates concurrently with a §1915(b) waiver, the state may have received
CMS approval to offer additional services under the provisions of §1915(b)(3) of the Act. Because
the provision of such services is authorized under the §1915(b) waiver authority rather than the
§1915(c) waiver authority, do not include the additional §1915(b)(3) services in the listing of
HCBS waiver services. Such services are specified in the §1915(b) waiver application and subject
to separate CMS review and approval. Similarly, when the §1915(b) waiver permits managed care
entities to use savings in order to provide alternative services to beneficiaries, do not include such
services in the listing of HCBS waiver services. Also note that any additional services provided
to §1915(c) waiver participants as part of a capitated arrangement under §1915(b), are provided
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without additional cost to the §1915(c) waiver — the cost to the §1915(c) waiver is the capitated
rate, whether or not additional services are provided.
CMS Review Criteria
• Services have been properly classified.
• There is no duplication of state Medicaid plan services.
• Non-statutory (“other”) services are necessary for assisting waiver participants to avoid
institutionalization and function in the community.
Item C-1-b. Alternate Provision of Case Management Services to Waiver Participants
Instructions

Select the payment authority or authorities under which case management functions are conducted
and complete Item C-1-c as applicable, including an indication as to whether case management is
provided as a waiver service.
Technical Guidance

In the context of an HCBS waiver, case management usually entails (but is not limited to)
conducting the following functions:
• Evaluation and/or re-evaluation of level of care;
• Assessment and/or reassessment of the need for waiver services;
• Development and/or review of the service plan;
• Coordination of multiple services and/or among multiple providers;
• Linking waiver participants to other federal, state and local programs;
• Monitoring the implementation of the service plan and participant health and welfare,
• Addressing problems in service provision;
• Responding to participant crises; and
• For waivers with cost or service duration limits, monitoring to detect and resolve situations
when the needs of an individual might exceed the limit(s) to ensure health and welfare of
waiver participants.
Case management may be covered as a waiver service. When case management is covered as a
waiver service, functions that are performed prior to the entrance of an individual to the waiver
(e.g., initial evaluation of level of care) may not be billed as a waiver service (however, they
potentially may be claimed as an administrative expense or billed to 1915(g) state plan Targeted
Case Management or another Medicaid authority).
Case management also may be covered as a state plan service (Targeted Case Management)
under §1915(g)(1) of the Act, or another Medicaid authority. When case management is
covered as a waiver service, its scope and other information about the service is described in
Appendix C-3. When case management is not covered as a waiver service, select the payment
authority under which waiver case management functions are provided and complete Item C-1-c.
This information assists CMS in understanding the overall structure of the waiver. In rare instances
(e.g., small, highly specialized waiver programs), case management may not be furnished as a
distinct activity but instead is furnished as a component of other waiver services. If this is the case,
select “not applicable.” When case management is provided as a Medicaid administrative activity,

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states must ensure that the costs are in accordance with the approved cost allocation plan. CMS
does not approve cost allocation plans via the waiver application.
Item C-1-c: Delivery of Case Management Services
Instructions

In the text field, specify the entity or entities that conduct case management functions on behalf of
waiver participants. Do not complete if case management is a service covered through the waiver
and defined in C-1/C-3.

Appendix C-2: General Service Specifications
Overview

Appendix C-2 addresses topics that typically cut-across several waiver services rather than
applying only to specific, individual services. In part, this appendix is designed to relieve states of
having to repeat information multiple times in each service’s specification (e.g., a requirement that
a direct service worker must undergo a criminal background investigation). Additional topics that
are addressed include the provision of services in facilities that are subject to the requirements of
the Keys Amendment (§1616(e) of the Social Security Act) and whether a state pays legally
responsible individuals, relatives and/or legal guardians for the provision of waiver services.

Detailed Instructions for Completing Appendix C-2
Item C-2-a: Criminal History/Background Investigations
Instructions

When individuals who provide waiver services must undergo a criminal history/background
investigation, select the “yes” response and specify in the text field the types of positions (e.g.,
personal assistants) for which such investigations are required, the scope of the required
investigation (e.g., state or national background check), and the process that is employed to ensure
that mandatory investigations have been conducted, including the entity responsible for conducting
the investigation. If the state does not require that such investigations be conducted for any type
of position that furnishes waiver services, select the “no” response.
Technical Guidance

As a safeguard, most states require that individuals who provide direct support and/or other
services to waiver participants undergo a pre-employment criminal history check and/or
background investigation. Here, identify the types of positions for which such checks or
investigations are required, the entity that is responsible for conducting checks or investigations
(e.g., provider agency), and the nature of such investigations. The state must also list the crimes
that bar individuals/entities from working in Medicaid. When investigations or checks are
required, explain how the state ensures that they have been conducted in accordance with the
state’s policies (e.g., as part of the certification of workers or as part of the periodic review of
provider agencies). The response may cite applicable state laws, regulations, or policies that
pertain to this topic. The material cited must be readily available through the Medicaid agency or
the operating agency (if applicable) upon request by CMS. When criminal history and/or
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background investigations are required, this information need not be repeated in the provider
qualifications section of the applicable service specifications in Appendix C-3.

CMS Review Criteria
When criminal history/background investigations are required, the waiver specifies:
• The types of positions that must undergo such investigations;
• The entity responsible for conducting the checks or investigations;
• The scope of the required investigation; and
• The state’s process to ensure that mandatory investigations have been conducted
Item C-2-b: Abuse Registry Screening
Instructions

If abuse registry screening is required, select the “yes” response and specify in the text field: (a)
the entity (entities) responsible for maintaining the abuse registry; (b) the type of positions (e.g.,
personal assistants, case managers) for whom abuse registry screenings must be conducted; and,
(c) the process for ensuring that mandatory screenings have been conducted, including the entity
responsible for conducting the screening against the registry. If abuse registry screening is not
conducted, select the “no” response.
Technical Guidance

As an additional safeguard, many states maintain abuse registries and require that workers who
furnish direct services to waiver participants and other positions to undergo pre-employment
screening through such a registry. This item asks whether such screening is required and, if so,
requests that the state provide information about such screening. State laws, regulations, or
policies cited in the response to this item must be readily available through the Medicaid agency
or the operating agency (if applicable) when requested by CMS. When abuse registry screening
is required, this information need not be repeated in the provider qualifications section of the
applicable service specifications in Appendix C-3.
CMS Review Criteria
When abuse registry screening is required, the waiver specifies:
• The entity (entities) responsible for maintaining the abuse registry;
• The type of staff for whom abuse registry screenings must be conducted;
• The entity or entities responsible for conducting the screening against the registry; and,
• The state process for ensuring that mandatory screenings have been conducted.
Item C-2-c: Facilities Subject to §1616(e) of the Social Security Act
With publication of final regulations and the addition of the section Appendix C-5 regarding home
and community-based setting requirements, this section of the waiver application is no longer
needed. Therefore, all instructions and technical guidance for this section of the application have
been removed from this version of the Technical Guide that includes changes implemented in
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2014. States with existing approved 1915(c) waivers will need to complete the new section C-5
upon renewal or amendment.
Discussion: Items C-2-d and C-2-e
Items C-2-d and C-2-e address similar topics but are distinct. Both concern state policies regarding
payment for the provision of waiver services by individuals who are related to the participant (and,
in the case of Item C-2-e, a legal guardian of a participant). However, the scope of Item C-2-d is
narrow. It solely concerns payment for the provision of personal care or similar services by legally
responsible individuals (e.g., a parent of minor child or a spouse). The instructions for Item C-2d below define “personal care or similar services.”
Item C-2-e addresses state policies regarding the payment for the provision of any type of waiver
service by a relative or legal guardian, including the provision of services other than personal care
by legally responsible individuals (keeping in mind that the provision of personal care or similar
services by such persons has been addressed in Item C-2-d). In this item, a state specifies whether
it permits payments to relatives or legal guardians for waiver services and, if so, any conditions or
limitations that the state places on such payments. For example, a state may decide to make
payments to relatives or legal guardians only in certain circumstances, for limited periods of time,
or permit payment to be made only to specified types of relatives (e.g., relatives who do not reside
in the same household as the participant).
It is up to the state to decide whether to provide for either type of payment and, when such
payments are made, to specify the circumstances when they are permitted. In the Appendix C-3
service specification template, there are check-offs as to whether the state allows for the provision
of a service by a legally responsible individual and/or a relative/legal guardian. The conditions on
payment specified in Items C-2-d and C-2-e apply to these check-offs. For example, if a state
provides in Item C-2-e that a relative may furnish waiver transportation services only when there
is no other provider available, then that that condition applies when “relative/legal guardian” is
checked as a potential provider of the transportation service in Appendix C-3.
Whenever a legally responsible individual or relative/legal guardian is paid for the provision of a
waiver service, the person must meet the provider qualifications that apply to a service and there
must be a properly executed provider agreement. In addition, other requirements such as the
proper documentation and monitoring of the provision of services also apply.
Item C-2-d: Provision of Personal Care or Similar Services by Legally Responsible Individuals
Instructions

Select whether the waiver provides for extraordinary care payments to legally responsible
individuals for the provision of personal care or similar services. If so, specify: (a) the types of
legally responsible individual(s) who may be paid to furnish such services and the services they
may provide; (b) applicable state policies that specify the circumstances when payment may be
authorized for extraordinary care by a legally responsible individual and how the state ensures that
the provision of services by a legally responsible individual is in the best interest of the participant;
and, (c) the controls that are used to ensure that payments are made only for services rendered.
Technical Guidance

CMS policy is that payments for personal care or similar services delivered by legally responsible
individuals (as defined in state law but typically the parent of a minor child or a spouse) are not
eligible for federal financial participation. Legally responsible individuals do not include the parent
of an adult beneficiary (including a parent who also may be a legal guardian) or other types of
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relatives, except as provided in state law). 42 CFR §440.167 prohibits FFP for payments to legally
responsible individuals for the provision of state plan personal care services. This prohibition is
based on the presumption that legally responsible individuals may not be paid for supports that
they are ordinarily obligated to provide. See also Section 4442.3.B.1 of the State Medicaid
Manual.
Through an HCBS waiver, a state may elect to make payment for personal care or similar services
that are rendered by legally responsible individuals when such services are deemed extraordinary
care so long as the state specifies satisfactory criteria for authorizing such payments. The criteria
must include how the state will distinguish extraordinary from ordinary care. By extraordinary,
CMS means care exceeding the range of activities that a legally responsible individual would
ordinarily perform in the household on behalf of a person without a disability or chronic illness of
the same age, and which are necessary to assure the health and welfare of the participant and avoid
institutionalization.
States are not required to, but may also specify other limitations, such as specific circumstances
under which legally responsible individuals may be paid providers. Such limitations could include
the lack of other providers who are available to serve the participant during periods when the
legally responsible individual would otherwise be absent from the home and, thereby, must remain
in the home to care for the participant or when the specific needs of the participant can only be
met by a legally responsible individual. In any case, providing for payments to legally
responsible individuals is a state option, not a federal requirement.
In the context of this item, personal care or similar services mean: (a) personal care (assistance
with ADLs or IADLs) whether furnished in the home or the community and however titled by the
state in the waiver (e.g., personal assistance, attendant care, etc.) and (b) closely related services
such as home health aide, homemaker, chore and companion services.
When a state provides for the payment to legally responsible individuals for extraordinary care,
the service must meet all the waiver criteria required when delivered by a customary provider, as
well as satisfy some additional protections. The legally responsible individual must meet the
provider qualifications (as specified in Appendix C-3) that the state has established for the personal
care or similar services for which payment may be made, and the state must conduct monitoring
of such services as provided in Appendix D-2, including the required documentation and assurance
that the services are delivered in accordance with the service plan. In addition, such arrangements
require the proper execution of a provider agreement. State policies should include additional
safeguards such as:
• Determining that the provision of personal care or similar services by a legally responsible
individual is in the best interests of the waiver participant. A state should consider
establishing safeguards when the legally responsible individual has decision-making
authority over the selection of providers of waiver services to guard against self-referral.
• Limiting the amount of services that a legally responsible individual may furnish. For
example, a state may decide to limit the amount to no more than 40 hours in a week and
thereby take into account the amount of care that a legally responsible individual ordinarily
would provide. When there is such a limitation, it should be reflected in the limitations
section of the service specification in Appendix C-3.
• Implementing payment review procedures to ensure that the services for which payment is
made have been rendered in accordance with the service plan and the conditions that the state
has placed on the provision of such services.

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• Addressing other foreseeable risks that might attend the provision of services by legally
responsible individuals.
In addition, states should be aware that unless the waiver uses institutional eligibility rules that
disregard the family income of a child waiver participant, paying a legally responsible relative may
affect the child’s eligibility for Medicaid.
To summarize, when a state provides for payment to legally responsible individuals for the
provision of personal care or similar services, the services will be equivalent to services supplied
by other types of providers, with some additional protections. The waiver must specify:
• Whether payment is made to the parent(s) of minor children, spouses, or both or other (as
defined by state law);
• The waiver personal care or similar services for which payment will be made;
• How the state distinguishes extraordinary care from ordinary care and any limitations of the
circumstances under which payment will be authorized;
• Limitations on the amount of services for which payment will be made;
• How it is established that the provision of personal care or similar services by a legally
responsible individual is in the best interests of the participant; and,
• How it is determined that payments are made for services rendered.
CMS Review Criteria
When the waiver provides for the payment for personal care or similar services to legally
responsible individuals for extraordinary care, the waiver specifies:
• The types of legally responsible individuals to whom payment may be made;
• The waiver personal care or similar services for which payment may be made;
• The method for determining that the amount of personal care or similar services provided
by legally responsible individual is “extraordinary care,” exceeding the ordinary care that
would be provided to a person without a disability of the same age;
• Limitations on the amount of personal care or similar services for which payment may be
made;
• How it is established that the provision of personal care or similar services by a legally
responsible individual is in the best interests of the participant; and,
• The procedures that are used to ensure that payments are made for services rendered.
Item C-2-e: State Policies Concerning Payment for Waiver Services Furnished by Relatives/ Legal
Guardians
Instructions

This item concerns state policies regarding payment for waiver services rendered by relatives
and/or legal guardians that do not fall within the scope of Item C-2-d. Select whether the state
makes payments to relatives or legal guardians for any waiver service (besides personal care or a
similar service furnished by a legally responsible individual as described in C-2-d). If the state
makes payments to relatives and/or legal guardians for waiver services, select one of the next three
choices and provide the additional information under the selected choice.

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Technical Guidance

At the option of the state, waiver services may be provided by a relative and/or legal guardian of
the participant. When responding to this item, keep in mind that Item C-2-d addresses
extraordinary care payments to legally responsible individuals who furnish personal care or similar
services to a waiver participant. For the purposes of this item, legally responsible individuals
are considered to be a type of “relative” with respect to payments for the provision of waiver
services other than personal care or similar services. When a relative or legal guardian may be
paid to provide waiver services, the relative or legal guardian must meet the provider qualifications
that have been specified for the service. Services must be monitored as provided in Appendix D2 and there must be a properly executed provider agreement.
This item presents four response choices as follows:
• No Payments. A state may elect not to make payments to relatives or legal guardians for the
provision of any waiver services.
• Specific Circumstances. A state may elect to pay relatives or legal guardians for the
provision of specified waiver services only in specific circumstances. Such circumstances
must be specified by the state. Specific circumstances might include: (a) the lack of a
qualified provider in remote areas of the state; (b) the lack of a qualified provider who can
furnish services at necessary times and places; (c) the unique ability of a relative or legal
guardian to meet the needs of a person; and/or, (d) other circumstances specified by the state.
When this choice is selected, the waiver must specify the following:
 The types of relatives or legal guardians that may be paid to furnish waiver services.
For example, a state may specify that relatives may be paid to furnish services but not
legal guardians. The state may specify that only relatives who do not live in the same
household as the participant may be paid to furnish services. A state may specify that
certain types of relatives may be paid to furnish services (e.g., grandparents of the
participant) but others may not (e.g., legally responsible individuals). A state may
provide that legally responsible individuals may be paid to furnish services (other than
personal care or similar services, which have been addressed in Item C-2-d) that require
specialized skills (e.g., nursing or physical therapy), provided that the legally
responsible individual is not legally obligated to furnish such services.
 The types of waiver services for which payment may be made to a relative or legal
guardian. Non-legally responsible individuals may be permitted to furnish personal
care or similar services.
 The specific circumstances when payment may be made to a relative or legal guardian.
The waiver also must describe the method for determining when these circumstances
apply.
 When payment may be made to a legal guardian, the waiver should include safeguards
for determining that the provision of services by a legal guardian are in the best interests
of the waiver participant, especially when the legal guardian exercises decision making
authority on behalf of the participant in the selection of waiver providers.
 The procedures that are followed to ensure that payment is made only for services
rendered, and that services are rendered in the best interest of the individual.
In Appendix C-3, there is the opportunity to select whether a waiver service may be provided
by a legally responsible individual or a relative/legal guardian. When this choice has been
selected, the selection in Appendix C-3 is qualified by the response to this item (i.e.,
“relative/legal guardian” means the types that are specified in this item). It is not necessary to
repeat the information provided in response to this item in the service specifications.
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• Specific Circumstances Do Not Apply. A state may provide that relatives or legal guardians
are permitted to be paid for rendering waiver services but not limit payment for such services
to specific circumstances. That is, provided that the relative otherwise meets the
qualifications to provide a service, the state will make payment to the relative or legal
guardian. When this selection is made:
 Specify any limitations on the types of relatives or legal guardians who may furnish
services (e.g., whether legally responsible individuals are excluded).
 In Appendix C-3, for each waiver service that a relative or legal guardian may furnish,
check off relative/legal guardian as a provider type. When relative/legal guardian is
not checked off in Appendix C-3, the state does not allow relatives or legal guardians
to be paid to furnish the service. For example, if this selection has been made in Item
C-2-e and transportation is the only service that has been checked off in Appendix C3, then only the relatives or legal guardians specified here may be paid to furnish
transportation and they may not be paid to provide any other waiver services.
 Specify the procedures that have been established to ensure that payment is made only
for services rendered.
•

Other Policy. Select this choice when either of the foregoing two choices does not
accommodate the state’s policies. For example, the state may restrict payment for waiver
services to specific circumstances in the case of some services or certain types of relatives
or legal guardians but not in the case of other services or other types of relatives or legal
guardians. When this choice is selected, the information provided in the text field should
parallel that required in the foregoing choices, depending on whether specific or
extraordinary circumstance are involved.

CMS Review Criteria
When the waiver provides for the payment of services furnished by relatives or legal guardians:
• The types of relatives or legal guardians to whom payment may be made are specified.
• The waiver services for which payment may be made to relatives or legal guardians are
specified.
• When relatives or legal guardians may be paid to furnish waiver services only in specific
circumstances, the waiver specifies the circumstances and the method of determining that
such circumstances apply.
• Limitations on the amount of services that may be furnished by a relative or legal guardian
are specified.
• When a legal guardian who exercises decision making authority may be paid to provide
waiver services, the waiver specifies how it is established that the provision of services
by the guardian are in the best interests of the participant.
• The waiver specifies the procedures that are employed to ensure that payment is made
only for services rendered and that services are furnished in the best interest of the
individual.

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Item C-2-f: Open Enrollment of Providers
Instructions

In the text field, specify the processes that are employed to assure that all willing and qualified
providers have the opportunity to enroll as waiver service providers.
Technical Guidance

Except when a §1915(c) waiver operates concurrently with a waiver granted under §1915(b) of
the Act waiving §1902(a)(23) with respect to Medicaid beneficiary free choice of provider, any
willing and qualified provider must be afforded the opportunity to enroll as a Medicaid provider.
A willing provider is an individual or entity that executes a Medicaid provider agreement and
accepts the state’s payment for services rendered as payment in full. A qualified provider is a
provider that meets the provider qualifications set forth in the approved waiver. The state must
provide for the continuous, open enrollment of waiver service providers.
A state may not place obstacles in the way of open provider enrollment (e.g., by selecting only a
limited number of providers to furnish a waiver service through an RFP process, requiring that a
provider be capable of furnishing services on a statewide basis or requiring that a provider contract
with a governmental entity (other than the Medicaid agency) or affiliate with an Organized Health
Care Delivery System). States have latitude in establishing qualifications to ensure that providers
possess the requisite skills and competencies to meet the needs of the waiver target population.
However, a state may not specify qualifications that are unnecessary to ensure that services are
performed in a safe and effective manner. When CMS reviews the qualifications associated with
each waiver service, it examines whether the proposed qualifications create obstacles to the
enrollment of all willing and qualified providers.
In response to this item, describe the processes that are employed in conjunction with the operation
of the waiver to assure that all willing and qualified providers have the opportunity to enroll as
waiver providers. Potential providers should have ready access to information regarding the
requirements and procedures to enroll as waiver providers. Effective processes might include
making provider enrollment information and forms continuously available via the internet and/or
periodically soliciting open provider enrollment in which times any provider that met the waiver
provider qualifications would be enrolled by the state.
§1915(c) Waivers that Operate with Concurrent Managed Care
In the case of §1915(b)/§1915(c) concurrent waivers or other managed care authorities running
concurrently with a 1915(c) waiver, it may be possible for a state may limit the providers of
services by requesting a waiver of §1902(a)(23) of the Act. In general, this waiver (most frequently
granted under the provisions of §1915(b)(4) of the Act) is employed to permit a state to contract
with a limited number of managed care entities through which Medicaid beneficiaries obtain
waiver and other services. Under a concurrent waiver, beneficiaries may be required to enroll with
a managed care entity to receive services (when a waiver is granted under the provisions of
§1915(b)(1) of the Act) or may elect to voluntarily receive services through a managed care entity
rather than through the regular Medicaid program (i.e., a state does not request a waiver under the
provisions of §1915(b)(1)).
In any case, a state must assure compliance with the provisions of 42 CFR §438.207 which
provides that each managed care entity “maintains a network of providers that is sufficient in
number, mix, and geographic distribution to meet the needs of the anticipated number of enrollees
in the service area.” This requirement extends to providers of home and community-based waiver
services that are furnished under the concurrent waivers.

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In the case of §1915(b)/§1915(c) concurrent waivers, a state should respond to this item by briefly
describing how it will assure compliance with 42 CFR §438.207 with respect to the delivery of
home and community-based waiver services, including describing any applicable provisions of its
contracts with managed care entities.
The state should similarly respond here if the 1915(c) waiver is operating concurrently with
another managed care authority, including §1932(a), §1915(a), or §1115 demonstrations.
CMS Review Criteria
• The provider enrollment processes described assure that all willing and qualified providers
have the opportunity to enroll.
• Providers have ready access to information regarding requirements and procedures to
qualify, and the timeframes established for qualifying and enrolling in the program.

Quality Improvement: Qualified Providers

Qualified Providers
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.
Instructions
The QIS must describe how the state Medicaid agency will determine that each waiver
assurance (and its associated component elements) is met. The waiver assurance and
component elements are listed above. For each component element, this description must include:
•

•
•

Activities or processes that are related to discovery and remediation, i.e., review, assessment
or monitoring processes; who conducts the discovery or remediation activities and with what
frequency. These monitoring activities provide the foundation for quality improvement by
generating information regarding compliance, potential problems and individual corrective
actions. The information can be aggregated and analyzed to measure the overall system
performance in meeting the waiver assurances. The types of information used to measure
performance, should include relevant quality measures/indicators.
The entity or entities responsible for reviewing the results (data and information) of discovery
and remediation activities to determine whether the performance of the system reflects
compliance with the assurances; and,
The frequency at which system performance is measured.

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Technical Guidance
This QIS element focuses on discovery and remediation activities, that is, processes to assess,
review, evaluate or otherwise analyze a program, process, operation, or outcome. Specifically, the
evidence produced as a result of discovery and remediation activities should provide a clear picture
of the state’s compliance in meeting an assurance.
CMS Review Criteria
• The discovery of compliance with this assurance and the remediation of identified
problems must address:
1) How the Medicaid agency assures compliance with the following provider
qualification subassurances:
2) 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.
3) The state monitors non-licensed/non-certified providers to assure adherence to
waiver requirements.
4) The state implements its policies and procedures for verifying that provider
training is conducted in accordance with state requirements and the approved
waiver.
5) How frequently oversight is conducted; and
6) The entity (or entities) responsible for the discovery and remediation activities.

Overview

Appendix C-3: Waiver Services
Specifications

In Appendix C-3, the specifications of each service that is offered under the waiver (and listed in
Appendix C-1) are detailed. The next section provides technical guidance concerning the coverage
of services under a waiver and detailed instructions for completing the application’s waiver service
specifications template.

Technical Guidance Concerning Service Coverage
Introduction
States have considerable latitude in selecting and specifying the services that are offered through
a waiver. §1915(c) of the Act specifically authorizes the provision of several types of home and
community-based services. A state may propose to offer other services that are not listed in the
statute, subject to CMS approval. Waiver services complement and supplement services that are
furnished under the state plan. Waiver services may not duplicate the services that are provided
under the state plan, but a waiver may expand upon the amount, duration, and frequency of services
provided under the state plan except for EPSDT services. The selection of services to meet the
needs of the waiver’s target population clearly is a critical consideration in designing an effective
waiver program.

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While states have flexibility in selecting and specifying a waiver’s services, there are certain
requirements that must be met in specifying service coverage and additional considerations that
states should take into account in designing their waiver programs and services. These topics are
discussed in the following sections. There also is a brief overview discussion of waiver and
Medicaid requirements as they pertain to providers of waiver services.
Requirements Concerning the Specification of the Scope of Services
As provided in 42 CFR 441.301(b)(4), a state is required to: “describe the services to be furnished
so that each service is separately defined.” The definition of each waiver service must describe in
concrete terms the goods and services that will be provided to waiver participants, including any
conditions that apply to the provision of the service. The definition of the service (including any
conditions that apply to its provision) is termed the “scope” of the service. When specifying the
scope of a service do not use terms such as "including but not limited to . . .," "for example . . .,"
"including . . .," “etc.” CMS will not approve vague, open-ended or overly broad service
definitions. The scope of a service must be readily ascertainable from the state’s service definition
– that is, the nature of what is provided to a waiver participant is expressed in understandable
terms. It is important to keep in mind that FFP is only available for the performance of activities
or the provision of goods that fall within the scope of the approved waiver service.
The scope of a service may be defined in one of two ways. An exhaustive service definition may
be employed. An exhaustive definition specifies in detail the types of activities that are
undertaken on behalf of a waiver participant or the goods that may be provided to a participant.
For example, if a waiver includes the coverage of medical equipment, the service definition
could include a detailed list of each item of medical equipment that may be provided. Items not
included in the list will not be provided or reimbursed. If a state wishes to alter an exhaustive
service definition, it must submit an amendment request to CMS.
In the alternative, a service may be defined as to its purpose. For example, a state may elect to
cover "only those medical supplies needed for the respirator-related needs of a respiratordependent patient" without listing the specific supplies that might be furnished. When a service is
defined as to its purpose, it is not necessary to submit a waiver amendment to reflect changes in
the exact nature of the service that might occur post-approval. At the same time, when a service
is defined as to its purpose, the service definition may not be expressed in open-ended terms. In
addition, when a service is defined as to purpose, the service definition should specify at least the
component elements of the service. Many of the core service definitions included as an attachment
to the instructions for this Appendix are examples of how services may be defined as to their
purpose.
As previously noted, states have the option of using the suggested core service definitions that are
included in the attachment, modifying those definitions to meet their needs or developing their
own service definitions. If a new service is proposed, its definition must use commonly accepted
terms and may not be open ended in scope. When new services are proposed, CMS reviews the
proposed service to ascertain whether the service:
• Contributes to the community functioning of waiver participants and thereby avoids
institutionalization;
• Is reasonably related to addressing waiver participant needs that arise as a result of their
functional limitations and/or conditions; and/or,

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Falls within the scope of §1915(c) of the Act and is not at odds with other provisions of the
Act.
Services that are diversional/recreational in nature fall outside the scope of §1915(c) of the Act.
In addition, with some exceptions, waiver funds may not be employed to pay for room and board
expenses or to acquire goods and services that a household that does not include a person with a
disability would be expected to pay for as household expenses (e.g., subscription to a cable
television service).
•

The scope of the individual services included in a waiver may overlap. For example, the provision
of personal assistance often is a common element in the delivery of many waiver services. It would
be unreasonable and inefficient for CMS to require that services be defined in a fashion to eliminate
overlapping activities by requiring that all forms of personal assistance be furnished under a single
personal assistance service. At the same time, there must be mechanisms to prevent duplicate
billing of services. When, for instance, a state provides for the “free-standing” coverage of personal
assistance but includes the provision of personal assistance as an integral element of the delivery
of a residential or day service, the state must prohibit the billing of the free-standing coverage for
personal assistance activities that are performed during periods when the waiver participant
receives the residential or day service that already includes the provision of personal assistance
and payment for personal assistance activities have been included in the payment for the residential
or day service.
In a similar vein, the situation may arise when a waiver participant may be concurrently receiving
two services that are nominally duplicative or overlapping. For example, when a participant is
directing waiver services, the participant may be concurrently receiving both case management
and information and assistance in support of participant direction (a.k.a., support brokerage). The
performance of both services may entail performing similar functions (e.g., assisting the
participant to locate service providers). CMS does not require that service definitions be fashioned
to eliminate all potential overlap (e.g., by only permitting support brokers or case managers to
provide assistance in locating providers but not both). However, service definitions should be
structured so that they prevent the duplicative performance of and billing for the same activity
undertaken on behalf of a waiver participant by multiple providers. For example, it is permissible
for a case manager to bill for the time that the case manager spends in developing a service plan
and for a support broker to bill for the time spent advising the participant during the service plan
development process. It would not be permissible for both the case manager and the support broker
to bill for the preparation of the service plan. When there is the potential for duplicative billing for
the performance of overlapping functions, states are advised to specify clearly in the relevant
service definitions how the underlying activities are distinct and/or how duplicative billing will be
prevented.
42 CFR §441.301(b)(4) also provides that “multiple services that are generally considered to be
separate services may not be consolidated under a single definition.” The chief reasons why
services may not be “bundled” are to: (a) ensure that waiver participants can exercise free choice
of provider for each service and (b) ensure that participants have access to the full range of waiver
services. Bundling means the combining of disparate services with distinct purposes (e.g., personal
care and environmental modifications) under a single definition and
- providing that the combined
services will be furnished by a single provider entity (e.g., one provider would furnish both
personal care and environmental modifications) that is paid one rate for the provision of the
combined services. CMS will consider a combined or bundled service definition only when it is
established that the bundling of services will result in more efficient delivery of services but not
compromise an individual's access to services or free choice of providers. When a bundled service
definition is proposed, the costs of each component service must be separately identified in the
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estimate of Factor D in Appendix J-2 and utilization/costs must be tracked during the period that
the waiver is in effect (i.e., encounter-type data must be compiled).
A service usually is not deemed to be a “bundled” service in the following circumstances:
When the tasks/activities that are conducted on behalf of a participant are closely related or
require similar provider skills (e.g., the provision of homemaker, chore and personal care
services by an “in-home supports” service worker);
• The state groups related services under a single broad service title (e.g., “employment-related
services”) but clearly provides that: (a) each component service (e.g., prevocational,
supported employment and supports for self-employment) is separately authorized in the
service plan; (b) the participant may exercise free choice of providers for each component
service; and, (c) each component service is separately billed. When services are grouped
under a broad service title, the costs and expected utilization of each component service must
be separately identified in the estimate of Factor D in Appendix J-2 and utilization/costs of
each component service must be tracked during the period that the waiver is in effect; and,
• The service normally involves the co-provision of several services through a single provider
in order to achieve the purpose of the service. Residential services typically fall into this
category because of their round-the-clock nature.
Additional Considerations Concerning Service Coverage
There are several additional considerations that states should keep in mind when fashioning the
coverage of services under a waiver. These include:
•

A. Relationship of Waiver Services to State Plan Services

Waiver services may complement the services that a state furnishes to Medicaid beneficiaries under
the state plan by including services that are not covered under the state plan or supplement state
plan services by providing for the coverage of services offered under the state plan in an amount,
frequency or duration greater than allowed under the state plan) the services that a state furnishes
to Medicaid beneficiaries under the state plan.
When reviewing proposed waiver service coverage, CMS will determine whether the service
already is covered under the state plan. If so, the service will be approved when the state is
proposing to exceed the limits imposed under the state plan (e.g., an extended state plan coverage
is proposed). When a service coverage is proposed that appears to duplicate a state plan coverage,
CMS will probe more deeply to determine whether the proposed waiver coverage is sufficiently
distinct from the state plan coverage to warrant approval. The coverage generally will be
considered distinct when: (a) the scope of the waiver coverage is materially different from the state
plan service (b) the providers of the waiver service are different from the providers of the state
plan service; and/or, (c) the method of service delivery is different (this difference may entail the
availability of participant direction options under the waiver which are not available under the state
plan). Coverage of services is not considered to be distinct when the sole difference lies in the
amount of or the method of payment for the service. When proposing to cover a service that
potentially overlaps the state plan coverage of a similar service, the state should include
information in the service definition that clearly delineates how the two coverages differ.
In the case of certain services (e.g., specialized medical supplies and equipment), CMS recognizes
that it would be overly burdensome to require states to spell out in detail how the waiver coverage
does not duplicate coverage under the state plan. In such cases, it is acceptable for a state to specify
that the authorization of such services will include making a determination that the state plan does
not cover the item in question (either by determining that the state plan does not cover the item or
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requiring that an item be subject to a coverage determination under the state plan before it is
authorized as a waiver service).
In addition, a state may not impair the access of waiver participants to services under the state
plan. A state may not provide that the receipt of a waiver service is grounds for the denial of a
state plan service for which the waiver participant may otherwise be eligible. For example, the
receipt of personal assistance services under a waiver may not serve as the basis for denying the
provision of home health services under the state plan. Similarly, a state may not require a waiver
participant to terminate the receipt of a state plan service as a condition for receiving a waiver
service. However, when authorizing waiver services, a state may take into account the services
that a waiver participant receives through the state plan. The overarching objectives of this
analysis are (1) to ensure that individuals have unfettered access to services to which they are
entitled; and, (2) to ensure that there is no duplication (or potential duplication) of payment for
services.
B. Pharmacy Services

Under the provisions of the Medicare Prescription Drug Benefit (Part D) of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003, states may not claim federal
financial participation in the costs of most drugs that are furnished to dual-eligible
Medicare/Medicaid beneficiaries on or after January 1, 2006. These beneficiaries will receive
prescribed drugs through the Medicare Part D benefit. As a consequence, when a state covers
pharmacy benefits under a waiver (usually as an extended state plan service in order to furnish
prescribed drugs in an amount greater than permitted under the state plan), the service specification
must exclude the provision of prescribed drugs available under Part D to dual eligible beneficiaries
except when a drug is not covered under Part D.
State Medicaid Director Letter #05-002 (included in Attachment D to the Instructions) provides
further information on drugs that are excluded from Part D coverage. When a state does not
cover these excluded drugs for dual-eligible beneficiaries under its state plan, the excluded drugs
may be covered under the waiver.
C. Relationship of Waiver Services to EPSDT Services
When a waiver serves children, the services that a state proposes to offer in the waiver must take
into account the expanded benefits that must be provided to Medicaid child beneficiaries
(individuals under the age of 21 who are eligible for Medicaid) under the Early and Periodic
Screening, Diagnostic and Treatment (EPSDT) provisions contained in §1905(r) of the Act. These
provisions apply to children who are served in waivers, including children who would not be
eligible for Medicaid except by virtue of their enrollment in a waiver. The intersection of HCBS
waivers and EPSDT services is discussed in more detail in Olmstead Letter #4 (included in
Attachment D to the Instructions).
Among its other provisions, §1905(r) requires that Medicaid-eligible children receive coverage of
all services necessary to diagnose, treat, or ameliorate defects identified by an EPSDT screen, as
long as the service is within the scope of section 1905(a) of the Social Security Act. (Please note
that any encounter with a health care professional practicing within the scope of his/her practice is
considered an inter-periodic screening.). That is, under EPSDT requirements, a state must cover
any medically necessary services that could be part of its basic Medicaid benefit were the state to
elect the broadest benefits permitted under federal law (not including HCBS, which are not a basic

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Medicaid benefit) irrespective of whether the state explicitly includes such benefits in its state
plan.
In the case of waivers that serve children, the waiver still may be employed to provide services
that supplement the services available under the state plan, beyond those EPSDT benefits, required
under §1905(r). Services that may be provided under a waiver to children could include respite
care, supported employment (in the case of older youth), and other services approved by CMS that
are cost neutral and necessary to prevent institutionalization.
If a service is available to a child under the state plan or could be furnished as service required
under the EPSDT benefit under the provisions of §1905(r), it may not be covered as a waiver
service for child waiver participants. Thus, in a waiver that serves children, services such as
rehabilitative services (as defined in 42 CFR §440.130), private duty nursing (as defined in 42
CFR §440.80), physical and occupational therapy (as defined in 42 CFR §440.110), and nurse
practitioner services (as defined in 42 CFR §440.166) may not be furnished as waiver services to
children.
When a waiver serves both children and adults, any waiver services that could be furnished in
accordance with the provisions of EPSDT requirements at §1905(r) must be limited to adult waiver
participants since comparable services for waiver participants under the age of 21 are provided as
part of the EPSDT benefit. For example, if an extended state plan coverage is proposed in order
to provide a service in an amount greater than permitted under the state plan, the coverage may
only apply to adults.
States have an affirmative responsibility to ensure that all child waiver participants (including
children who become eligible for Medicaid by virtue of their enrollment in a HCBS waiver) receive
the medically necessary services that they require, including Medicaid coverable services available
under EPSDT. Because the HCBS waiver can provide services not otherwise covered under
Medicaid and can also be used to expand coverage to children with special health care needs,
EPSDT and HCBS waivers can work well in tandem. However, a child's enrollment in an HCBS
waiver cannot be used to deny, delay, or limit access to medically necessary services that are
required to be available to all Medicaid-eligible children under federal EPSDT rules. While states
may limit the number of participants under an HCBS waiver, they may not limit the number of
eligible children who may receive EPSDT services. Thus, children cannot be put on waiting lists
for Medicaid coverable EPSDT services (those coverable under section 1905(a)). Children who
are enrolled in the HCBS waiver must also be afforded access to the full array of EPSDT services.
Moreover, under EPSDT, there is an explicit obligation to “make available a variety of individual
and group providers qualified and willing to provide EPSDT services”.
D. Children’s Education Services

Waiver funding may not be used to pay for special education and related services that are included
in a child’s Individualized Educational Plan (IEP) under the provisions of Individuals with
Disabilities Education Improvement Act of 2004 (IDEA). The funding of such services is the
responsibility of state and local education agencies. §1903(c)(3) of the Act provides that FFP is
available for services included in an IEP when such services are furnished as basic Medicaid
benefits. Waiver services are not considered to be basic Medicaid services and, therefore, FFP is
not available for IEP special education and related services that may only be funded through an
HCBS waiver.
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E. Children’s Foster Care Services

Waiver services may be furnished to children in foster care living arrangements but only to the
extent that waiver services supplement maintenance and supervision services furnished in such
living arrangements and waiver services are necessary to meet the identified needs of children.
Waiver funds are not available to pay for maintenance (including room and board) and supervision
of children who are under the state’s custody, regardless of whether the child is eligible for funding
under Title IV-E of the Act. The costs associated with maintenance and supervision of these
children are considered a state obligation. The costs associated with the treatment of these children
may be Medicaid reimbursable. Depending on the nature of the treatment (i.e., habilitation), the
costs of treatment may be eligible for FFP under a waiver.
When waiver case management services are furnished to children in foster care who are eligible
for Title IV-E funding, the state must ensure that the claim for FFP does not include costs that are
properly charged as Title IV-E administrative expenses.
F. Rehabilitative Services

Waivers are not limited to the provision of habilitation services that are designed to teach
individual skills. A state also may cover rehabilitative services where the purpose is to restore
functioning. Rehabilitative services may be covered in a waiver as “other waiver services” since
rehabilitative services are not mentioned in §1915(c) of the Act. When the state plan covers
rehabilitative services, they also may be offered in a waiver on an extended state plan service basis.
The receipt of rehabilitative services does not preclude the provision of enhanced habilitation
services to a waiver participant.
G. Prevocational and Supported Employment Services

Prevocational and supported employment services may be furnished as expanded habilitation
services under the provisions of §1915(c)(5)(C) of the Act. They may be offered to any target
group for whom the provision of these services is appropriate and beneficial. As provided in
Olmstead Letter #3 (included in Attachment D), the provision of these services is not limited to
waiver participants with developmental disabilities.
However, such services may only be furnished to a waiver participant to the extent that they are
not available as vocational rehabilitation services funded under the Rehabilitation Act of 1973.
When a state covers prevocational and/or supported employment services in a waiver, the waiver
service definition of each service must specifically provide that the services do not include services
that are available under the Rehabilitation Act (or, in the case of youth, under the provisions of the
IDEA) as well as describe how the state will determine that such services are not available to the
participant before authorizing their provision as a waiver service.
Waiver funding is not available for the provision of vocational services (e.g., sheltered work
performed in a facility) where individuals are supervised in producing goods or performing
services under contract to third parties. Employment related waiver services must be provided in
accordance with CMCS Informational Bulletin dated September 16, 2011.

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H. Services to Facilitate the Transition of Institutionalized Persons to the Community

In various State Medicaid Director Letters issued since 2000 (located in Attachment D), CMS has
issued policy guidance concerning the provision of services for persons who transition from an
institutional setting to the community. This guidance provides that certain services may be
furnished in advance of the discharge of the person from the institutional setting and claimed for
federal financial participation once the individual enters the waiver. The basis of this policy
guidance is to assure the continuity of services for individuals who are returning to the community.
Community transition services may now be furnished to facilitate the transition of persons from
any congregate setting (both institutional and non-institutional) to a more independent/less
restrictive living arrangement.
All transition services must be reasonable and necessary, not available to the participant through
other means, and clearly specified in the waiver participant’s service plan. States may not claim
FFP for services that are furnished or activities that are performed in advance of the individual’s
entrance to the waiver but may claim FFP once the person is enrolled in the waiver. If the
individual should not enroll in the waiver due to unforeseen circumstances such as death or change
in eligibility status, the state may be able to claim for some or all of the transition activities as
administrative costs in accordance with an approved Medicaid cost allocation plan.
States have the flexibility to cover transition case management activities as either an HCBS waiver
service or as targeted case management under the state plan. States are encouraged to include
these transition services in their waiver programs. The relevant service specification should
indicate when a service is furnished on transition basis.
I. Participant Direction of Services

When the waiver provides for participant direction of services (as specified in Appendix E), it is
permissible to limit the availability of Financial Management Services and Information and
Assistance in Support of Participant Direction (when covered as a waiver service) to waiver
participants who have elected to direct some or all of their services. It also is permissible to limit
the availability of other waiver services to participants who have elected to direct their waiver
services when the delivery of the waiver service is tied to the use of the Employer or Budget
Authorities.
J. Provision of Waiver Services Out-of-State

Waiver services may be furnished in another state to a waiver participant. For example, it may be
more convenient for waiver participants to obtain services in a bordering state. In addition, services
such as personal assistance may be furnished to waiver participants who travel to another state to
visit family members or for other purposes.
Applicable policies and considerations regarding the provision of waiver services out-of-state are
delineated in Olmstead Letter #3 (included in Attachment D to the instructions). In brief, waiver
services that are furnished out-of-state must meet the state of residence waiver standards and
requirements in all respects. That is, the out-of-state provider that furnishes the services must meet
the same qualifications as in-state providers and there must be a provider agreement in effect. In
addition, when services are furnished out-of-state, they are subject to the same monitoring

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requirements as if they were furnished in-state. As discussed in Olmstead Letter #3, a state may
enter into agreements with other states to facilitate the provision of services out-of-state.
Provider Requirements

The waiver assurances at 42 CFR §441.302(a) require that: (a) there are adequate standards for all
types of providers that provide services under the waiver and (b) that the standards must be met
when services are furnished. In other words, waiver services may only be furnished by providers
who have been found to meet all applicable qualifications. In Appendix C-3, the standards that
apply to each waiver service are specified along with the qualifications that providers must meet.
Considerations that apply to the specification of provider qualifications are discussed below. In
addition, the waiver’s Quality Improvement Strategy related to providers in Appendix C and in the
systems improvement, strategies described in Appendix H must address how the state will verify
that providers meet applicable standards during the period that the waiver is in effect.
In addition, it is important to keep in mind that §1902(a)(27) of the Act (as further specified in 42
CFR §431.107(b)) requires that each provider of a Medicaid service have a provider agreement in
effect with the Medicaid agency. This requirement applies to the provision of waiver services and
assures accountability in the provision of Medicaid services. The Medicaid agency may authorize
in writing that another entity (e.g., the operating agency) may perform the administrative task of
executing and holding the provider agreement on its behalf. In the case of participant direction, a
financial management services entity may be authorized to execute the provider agreement on
behalf of the Medicaid agency. There are two exceptions to this requirement. When §1915(c)
waiver services are delivered through managed care entities under a concurrent waiver, only the
managed care entity has an agreement with the Medicaid agency; network providers contract with
the managed care entity rather than the Medicaid agency. The other exception is when waiver
services are delivered through an Organized Health Care Delivery System (OHCDS) arrangement.
Such arrangements are discussed in more detail in the instructions for Appendix I.

Detailed Instructions for Completing Appendix C-3

Appendix C-3 is a template that is designed to consolidate pertinent information about the
specifications for each waiver service (e.g., its definition, pertinent limitations, and provider
qualifications). In the web-based application, the required information is entered by completing
web-pages that are linked to each service. Each element of the template is discussed below.
Service Specifications
Service Title
Instructions

Complete the text field with the title of the service. In the case of statutory services, select a service
from the drop-down list and enter an alternate title if one has been assigned.
Also, select the HCBS Taxonomy category and sub-category from the drop-down list. To add a
Taxonomy Category, select the category from the drop-down list under the Category heading.
To add a Taxonomy Sub-category, select the subcategory from the drop-down list under the Subcategory heading.
Technical Guidance

An important characteristic of 1915(c) Waivers is state flexibility to identify new services and
supports. One challenge with this flexibility is that it is difficult to know what is happening in
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HCBS at a national level. Measuring what occurs is a necessary step to demonstrating the
effectiveness of HCBS.
The HCBS Taxonomy, a standard categorization structure for Medicaid HCBS, was added to the
1915(c) application on March 1, 2014. A table with definition of the categories and subcategories
in the HCBS Taxonomy, titled the “Medicaid Home and Community-Based Services (HCBS)
Taxonomy Category and Subcategory Definitions,” is available on the WMS website. The HCBS
taxonomy provides an orderly classification of services so CMS can aggregate data. CMS intends
to use the taxonomy to provide national data regarding availability, utilization, and expenditures
of categories of HCBS. It also will enable states or CMS to compare utilization and expenditures
across states for categories of HCBS.
The HCBS Taxonomy does not change state flexibility to identify and define services and supports.
States will be able to use the taxonomy to identify other states that provide a certain type of service,
even if the states use different names.
A combination of Taxonomy Category and Taxonomy Sub-Category is a single match of a service
to the HCBS Taxonomy. The Taxonomy Category includes a drop-down field with 17 categories
of service that indicate distinct types of services. The category field must be entered first.
The Taxonomy Sub-Category is a subset of a category to provide more specific information. A
few categories have only one sub-category. The drop-down options for the Sub-Category vary
based on the entry for the Taxonomy Category.
A service may include more than one Taxonomy Category and Sub-Category combination. A
state can enter up to four sets of Taxonomy Category and Taxonomy Sub-Category for a single
service. Multiple combinations of Taxonomy Category and Sub-Category are likely only for the
following:
• Round-the-Clock Services: for example, some waivers have a service with more than one
type of residential habilitation
• Supported Employment: some waivers have a service that includes both job development
and ongoing supported employment
• Day Services: some waivers have a service that includes two types of day support, such as
adult day health and adult day care (social model); or day habilitation and prevocational
services
• Nursing: some waivers combine private duty nursing and skilled nursing in a single service
• Caregiver Support: some waivers combine in-home and out-of-home respite in a single
service
• Caregiver Support and Participant Training: some waivers combine caregiver and
participant training in a single service
• Services Supporting for Self-Direction: some waivers combine financial management
services and information and assistance in a single service
• Equipment, Technology, and Modifications: some waivers combine equipment and
supplies in a single service
The service might have the same name as the Taxonomy Sub-Category, or the service might have
one of the common names listed in the taxonomy table document.

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The state should check the definition to ensure the terms are used in the same manner, and if a
match is not obvious, look at the taxonomy document from top to bottom.
It is possible that two or more services from the same waiver could have the same Taxonomy
Category and Sub-Category. For example, a state may have separate services for case management
and transition case management
States should consider the service as a whole, and not as discrete tasks. For example, many states
have an assisted living service that provides personal care, homemaker, and other supports. In
such instances, the service should be considered as a whole (e.g., Group Living, other), rather than
mapped separately to personal care, homemaker, etc.
Some states define some services in part by what is NOT provided. For example, homemaker does
not include assistance with activities of daily living (ADLs). Therefore, the Taxonomy SubCategories within the home-based services category are presented approximately in a continuum
from more to less assistance.
In addition, personal care might include homemaking tasks as well as ADL assistance, and home
health aide and personal care might include similar assistance. If home health aide services include
supervision by a registered nurse or licensed therapist AND services provided by a licensed home
health agency, these services would fall under the HCBS Taxonomy category of personal care.
Carry Over Services
Instructions

This section of the template is reserved for renewal waivers, new waivers that replace an approved
waiver and amendments that convert an approved waiver to the new application format. In the
case of each waiver service, indicate whether the coverage of a service included in the approved
waiver is being continued without modification, is carried over with modifications, or is a new
service that was not previously covered. This information will facilitate CMS review.
Service Definition
Instructions

Describe the service definition in the text field.
Technical Guidance

The service definition specifies the scope of the service. The scope of a service describes the
purpose of the service, the types of activities that comprise the service, including, as applicable,
any goods that will be furnished to a waiver participant who receives the service. As appropriate,
the service definition may include additional parameters that apply to or affect the provision of the
service. Such parameters may include:
•
•

Conditions under which the service is considered necessary and thereby will be authorized.
For example, a state may limit the provision of skilled nursing services to waiver participants
who have specified needs that require the performance of certain tasks by licensed nurses.
Requirements that a service be subject to additional review before it is furnished. For
example, a state may make the provision of behavioral support services subject to the review
and approval of a behavioral services clinician. Alternatively, the provision of home

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•
•

•

•

accessibility modifications may require that a physical or occupational therapist review their
appropriateness.
Requirements that a service is subject to prior authorization by the Medicaid agency or the
operating agency (if applicable).
Other conditions that must be present in order for a service to be furnished. For example, the
provision of respite care may be restricted only to participants who reside with unpaid
caregivers. Alternatively, the waiver may provide that a service only will be furnished when
it is not available through the state plan.
Specifications concerning when a service may not be furnished to a participant who is the
recipient of another service. For example, a state may provide that individuals who receive
residential services may not also receive freestanding personal assistance services
concurrently when such services are furnished as part of a residential service.
As previously noted, a state may limit the provision of certain services to persons who have
elected to direct their waiver services.

The parameters included in a service definition specify the circumstances when a service will or
will not be furnished. However, do not include in the service definition limitations on the amount,
frequency or duration of service. Such limitations are addressed in the next part of the template.
When a service may be participant-directed, the participant usually has the authority to establish
additional parameters on the provision of the service (e.g., decide when the service will be
furnished and how the service will be furnished). Additional participant-specified parameters are
permissible as long as they comport with the underlying definition of the service.
Applicable Limits on Amount, Frequency, or Duration
Instructions
In the text field, specify applicable limits (if any) on the amount, frequency or duration of the service
(e.g., maximum allowable units, maximum allowable expenditure).
Technical Guidance

A limit on the amount of a service may take the form of a maximum allowable expenditure for the
service or the maximum number of units of the service that will be furnished during the period of
the service plan. A limit on frequency is a limit that restricts the number of units of service that
will be furnished during a shorter period of time (e.g., per week or per month). A limit on duration
is the maximum period of time over which a service will be provided or authorized unless the
necessity of the service is re-established.
When limits on amount, frequency or duration are applied, they must not pose obstacles to the
service achieving its stated purpose. A state may include a dollar limit on the amount of a specific
service per individual (for example home modifications may be limited to $10,000 in a year) so
long as the state continues to assure the health and welfare of the waiver participant once the limit
is reached. If the state establishes a dollar or other limit on a service, the state must explain the
steps that it will take to ensure that the individual’s needs can be met within the dollar limit, what
alternatives are available once the dollar limit is reached, and how the state will continue to assure
the waiver participants’ health and welfare.
A state may exempt waiver participants who exercise Budget Authority as provided in Appendix
E-2-b from a limitation on the amount, frequency, or duration of a service provided that: (a) the
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service is included in the participant-directed budget; (b) the exemption does not result in a change
in the overall amount of the participant-directed budget; and, (c) the additional services are
authorized in the service plan. If participants who exercise Budget Authority are exempt from the
application of the limitation, include a statement to that effect in the text field.
When a state imposes limits on sets of services (e.g., a dollar limit applies to two or more services
in combination) or limits on the overall amount of waiver services that may be furnished to a
participant, such limits are specified in Appendix C-4.
Provider Specifications
This part of the template consolidates information about the providers of the service, including
their qualifications. Provider means an individual or agency that performs the service on behalf
of the waiver participant, holds a Medicaid provider agreement to furnish the service, and receives
payment for services rendered. Each component of this part of the template is discussed below.
Preceding this discussion is a brief discussion of the nature and role of the Medicaid provider
agreement.
Provider Category(s)
Instructions

Indicate whether the service is provided by individual providers, agencies or both. For each
category of provider, list the types of providers who furnish the service.
Technical Guidance

An individual provider is defined as a person who is in independent practice and not employed by
a provider agency. Workers who are employed by a participant are considered to be individual
providers. List the type of individual provider (e.g., personal assistant, psychologist, physical
therapist).
An agency provider is an entity whose employees furnish the service or from which goods are
purchased. When a service is provided by an agency, also list the types of agencies that furnish
the service (e.g., home health agency, medical supply company, certified case management
agency). Additional information about each type of provider listed in this part of the template is
captured in the next two sections (provider qualifications and verification of provider
qualifications).
The situation frequently arises that a state elects to specify that a service is furnished by an agency
but requires that the agency employees who render the service meet specific qualifications. For
example, a state may decide to purchase skilled nursing services only from home health agencies
but require that the service may only be provided by licensed nurses who are employed by the
home health agency. In this instance, home health agency is listed as the only provider type
(because the agency holds the provider agreement and receives payment for the services furnished
by its nurse employees). The nurse employee is not considered to be the provider even though the
nurse renders the direct service. In the provider qualifications section of the template (discussed
below), the state may indicate that only licensed nurses may perform the service).

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The selection of the categories of providers who may furnish a service has implications for waiver
participant exercise of free choice of provider and access to waiver services. As a general matter,
free choice of provider and access to waiver services are enhanced when waiver participants are
able to select from among a wide variety of providers, including both individual and agency
providers. CMS will review the application to assess whether the types of providers specified is
overly narrow and thereby poses obstacles to waiver participants obtaining waiver services from
otherwise willing and qualified providers of services. This assessment will also include reviewing
the proposed provider qualifications to ensure that they are reasonable and appropriate in light of
the nature of the service and do not contain elements that would unnecessarily constrict participant
free choice of provider. When only agency providers may provide a service, CMS may request
that the state furnish additional justification for not permitting individual providers to furnish the
service.
Provision by Legally Responsible Persons or Relatives/Legal Guardians
Instructions

Select whether the service may be furnished by a legally responsible person, relative and/or legal
guardian.
Technical Guidance

Items C-2-d and C-2-e detail the state’s policies with respect to permitting: (a) legally responsible
persons to furnish personal care or similar services and (b) relatives and/or legal guardians to
furnish waiver services. The checkboxes provided in this part of the template link those policies
to each waiver service. For example, if in Item C-2-e, the state provides that only certain types of
relatives but not legal guardians may provide a service, then the checkboxes for relatives and legal
guardians in this part of the template are interpreted in light of the policies expressed in Item C-2e.
Provider Qualifications

Instructions

For each type of individual or agency provider identified under the provider category section of
the template, specify the provider qualifications. Add as many providers as necessary in order to
accommodate all types of providers.
Technical Guidance

Provider standards or qualifications are the criteria that a provider must meet in order to provide
the waiver service. The template provides for three types of provider qualifications:
•

•

•

A license issued under the authority of state law. In this instance, provide the legal citation
of the applicable state law governing the issuance of the license. Do not include the text of
the state law;
A certificate issued by a state agency or other recognized body. For example, a certificate
may be issued as a result of a quality review of the provider or by a recognized accreditation
organization. In this instance, cite the applicable state regulations or policies that serve as
the basis of the certification; and,
Other standards specified by the state. These other standards may be in addition to a required
license or certificate and must be specified.

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One or more of these types of qualifications must be specified for each service.
CMS has not promulgated minimum provider qualifications for waiver services. States have
latitude in establishing appropriate qualifications. Like other Medicaid services, waiver services
are subject to any relevant requirements contained in state law. However, provider qualifications
must be reasonable and appropriate in light of the nature of the service. They must reflect sufficient
training, experience, and education to ensure that individuals will receive services from qualified
persons in a safe and effective manner. Provider qualifications and standards should not contain
provisions that have the effect of limiting the number of providers by the inclusion of requirements
unrelated to quality and effectiveness.
Training is particularly important for person care service (PCS) providers, such as personal care
attendants (PCAs). While CMS has not established specific standards that states must meet, the
state should provide detailed information to demonstrate that PCAs are sufficiently trained and
educated to provide applicable waiver services. Details of the training can include but are not
limited to; the hours of training required for PCAs prior to starting their work with individuals,
any continuing educational opportunities available for PCAs, any state-sponsored training
programs, a detailed description of the delivery method and frequency of available training, and
the number of hours required for PCAs to maintain certification or licensure. Finally, the state
should document whether they maintain and make available to individuals and families a provider
listing or database for both qualified individual PCAs and PCS providers. For self-directed services
the individual and/or representative must identify the specific training needed to meet the
individual’s needs for assistance as part of the person-centered service plan.
As previously noted, there may be instances when a state elects to limit the providers of a service
to specific types of agencies, but the state should also describe the qualifications of the agency
employees who furnish the service directly. Such requirements may be reflected in the template
in various ways, depending on the nature of the requirement. In the example of skilled nursing
services previously discussed, the requirement that such services be provided by home health
agency employees who are licensed nurses can be reflected in the license column by citing the
license that the home health agency must possess and adding an “employee” section to cite the
license that the employee nurse must possess. Another alternative is to reflect employee
qualifications in the “other standard” column.
It is important to keep in mind that FFP is only available for waiver services that are furnished by
providers who have been determined to be qualified when the service is furnished. Consequently,
when a provider must meet certain experience and training qualifications, the services that the
provider renders may only be claimed for FFP if the provider has completed all necessary training.
A state may provide that additional qualifications may be incorporated into the service plan in
order to meet the unique or specific needs of the participant. In addition, participants who exercise
the Employer Authority may require that the workers whom they hire to have skills or
characteristics that the participant judges are important to meeting the participant’s particular
needs. However, a state may not provide that provider qualifications will be solely specified in
the service plan or by the participant. In other words, a state must establish the essential minimum
qualifications that a provider must meet in order to be deemed a qualified provider and the state
must ensure that those requirements are met when the service is provided.

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Verification of Provider Qualifications
Instructions

For each type of provider (individual or agency), explain the entity or entities that are responsible
for verifying that the provider possesses the qualifications specified for the service prior to delivery
of the service and how often the qualifications are re-verified.
Technical Guidance

The verification of provider qualifications may be conducted by entities other than the Medicaid
agency or the operating agency (if applicable) as specified in Appendix A. In the case of
participant-directed services, the waiver may provide that the participant is responsible for the
verification of some or all provider qualifications. Financial management services entities also
may be tasked with verifying some or all provider qualifications.
There is no federally-required schedule for the re-verification of provider qualifications. In the
case of some types of providers (e.g., personal assistants), a state may provide that provider
qualifications are only re-verified as necessary. Irrespective of the schedule that is employed to
re-verify provider qualifications, the state has the responsibility to ensure that providers meet the
qualifications for each service on an on-going basis. Often, this may include specific program
documentation and visit verification methods. For PCS providers, states must describe supervision
and monitoring requirements that ensure only qualified providers are providing personal care
services.
Service Delivery Method
Instructions
Select whether the service is participant-directed, provider-managed or both. If the waiver does not provide
for participant direction of services, select only the provider-managed service delivery method.
Technical Guidance

Provider-managed means that the service provider is responsible for managing all elements of
service provision in accordance with the participant’s service plan, including taking into account
any directives contained within the service plan regarding how and when the service is to be
furnished and the expressed preferences of the participant.
Participant-directed means that the participant has the authority to manage some or all aspects of
service provision as provided in Appendix E (Participant Direction of Services). A service may
only be specified as participant-directed when the waiver makes available the participant direction
opportunities that are specified in Appendix E. When a service may be participant- directed, it
also must be listed in the table in Item E-1-g in Appendix E where the type of participant direction
opportunity (or opportunities) that is employed in conjunction with the service is indicated. In the
web-based application, each service that is specified as participant-directed is automatically listed
in Item E-1-g. There is no limitation on the number of waiver services that may be participant
directed. When a service may be either provider-managed or participant-directed, the participant
may decide which service delivery method to employ.

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CMS Review Criteria

CMS applies the following criteria when reviewing each service in Appendix C-3:
CMS Review Criteria
•
•
•
•
•
•
•
•
•
•
•
•

Each service is separately defined.
The service does not duplicate coverage under the state plan
When the waiver serves individuals under age 21, the service does not duplicate a service
that can be provided under the state plan as services required under EPSDT.
The service definition clearly delineates the purpose and the scope of the service.
The scope of the service does not span multiple, unrelated services, although similar or
related services may be combined.
When the scope of a service potentially overlaps with the scope of another service, there
are mechanisms that prevent duplicate billing.
In the case of non-statutory services, the service is necessary to avoid institutionalization
and address functional impairments or other participant needs that, if left unaddressed,
would prevent the person from engaging in everyday community activities.
Any limits on the amount, duration and frequency for the service are consistent with
assuring health and welfare for the target population.
Provider qualifications are specified for each service and are appropriate to the nature and
type of the service.
Provider qualifications include requirements for training, experience and education that
are sufficient to ensure that waiver participants will receive services in a safe and effective
manner.
Provider qualifications do not include requirements that would unnecessarily restrict the
number of providers, including unnecessarily restricting the provision of a service to
agency providers.
For personal care services, the following details must be provided:
1) Requirements regarding training hours and availability of continuing education,
and whether such training is state sponsored, are highlighted for PCAs and other
PCS providers.
2) States should maintain a listing of qualified PCA/PCS staff and make the list
available to individuals and families.
3) PCS providers must be regularly monitored and supervised by the agency and/or
waiver participant in accordance with state policies.

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

Overview

In Appendix C-3, a state specifies the limits (if any) on the amount, frequency and duration that
apply to each specific waiver service, including a dollar limit. In this Appendix, a state may specify
dollar limits that apply to a set (or sets) of waiver services (two or more services in combination).
A state also may establish limits on the maximum dollar amount of waiver goods and services that
is authorized in a participant’s service plan. Sometimes such limits are termed “budget
allocations.” Dollar limits on the overall amount of services that apply after entrance to the waiver
are distinguished from the individual cost limit (specified in Appendix B-2) that a state may apply
in determining whether to enroll or maintain an individual in the waiver. For example, when a state
does not impose an individual cost limit, it still may subject service plans to overall dollar limits
post-entrance to the waiver. Since limits on sets of services or dollar limits on the overall dollar
amount of a service plan constitute limits on the amount of services, the state must specify in the
waiver any such limits that apply. If the limit is only applicable to one service, that limit should be
identified in the limitation section of the service specification in Appendix C-3.

Types of Limits
The appendix pre-identifies three types of limits that a state might employ:
•

•

•

Limits on Sets of Services. This type of dollar limit is applied to two or more waiver
services, usually services that are closely related or might serve as substitutes for one another
(e.g., personal care and chore services). A state may define several sets or groupings of
services to which dollar limits apply.
Prospective Individual Budget Amount. Some states have developed and implemented
methodologies that determine a specific budget amount that is uniquely assigned to each
individual waiver participant. The assigned budget amount constitutes a limit on the overall
amount of services that may be authorized in the service plan. This method is termed
“prospective” because the amount that is assigned is determined in advance of the
development of the participant’s service plan.
Budget Limit by Level of Support. Other states have developed and implemented
methodologies that group waiver participants who share similar characteristics or support
needs. States assign budget limits to each of these levels or participant groupings. These
limits specify the maximum dollar amount of waiver goods and services that may be included
in the service plans of participants who fall into each level or grouping.

Other approaches also have been implemented by states. For example, some states have established
“baseline” budget allocations that apply to all waiver participants but provide for stepping-up the
baseline allocation in certain pre-defined circumstances.
When a state also provides for the participant direction budget authority opportunity (in Appendix
E), there may be a relationship between the participant-directed waiver budget and the budget
allocation methods described here. This appendix addresses limits that apply to all waiver
participants, regardless of whether the waiver provides for participant direction. If the waiver only
provides for the use of individual budgets when participants have budget authority as provided in
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Appendix E, then this appendix does not apply. The methods for how self-directed budgets are
developed would be described only in Appendix E.

Applicability

This Appendix must be completed whenever a state imposes a dollar limit on the amount of waiver services
that may be authorized in a service plan over and above any limits on amount, duration and frequency that
apply to individual waiver services. The “not applicable” selection should be made only when no such
dollar limits are applied. If one of the pre-identified selections does not appropriately describe the dollar
limits that the state applies, select “other” and describe the dollar limit that is imposed.

Basic Information Requirements
Regardless of the type of limit that is applied to waiver services, certain basic information must be
provided, including:
(a) The waiver services to which the limit applies. A budget limit, for example, might be
applied to all waiver services or, alternatively, some services (e.g., crisis services) may be
excluded from the limit and furnished in amounts necessary outside the budget;
(b) The basis of the limit, including its basis in historical expenditure/utilization patterns and,
as applicable, the processes and methodologies that are used to determine the amount of
the limit to which a participant’s services are subject. When dollar limits are imposed,
CMS expects that the amount of the limit will be based on evidence that the limit is a
realistic estimate of the expected amount of services that waiver participants are likely to
require. Limits may not be arbitrary or lack foundation in observed experience. The
methodology that is employed to determine the amount of the limit must be fully described.
When the amount of the limit is based on assessment information or other factors, how
such information is used to determine the limit should be fully explained.
(c) How the limit will be adjusted over the course of the waiver period. Describe whether the
limit will be adjusted to take into account cost increases and/or whether the methodology
will be periodically re-evaluated in light of changes in utilization patterns or other factors.
(d) Provisions for adjusting or making exceptions to the limit based on participant health and
welfare needs or other factors specified by the state. Especially in the case of limits on the
overall amount of waiver services that may be authorized in a service plan, describe the
conditions under which the limit may be adjusted to assure participant health and welfare.
(e) The safeguards that are in effect when the amount of the limit is insufficient to meet a
participant’s needs. Such safeguards may include referring the participant for enrollment
in another waiver program where more resources may be available.
(f) How participants are notified of the amount of the dollar limit. Because a dollar limit
constitutes a limitation on the amount of waiver services that a participant may receive, it
is important that the participant be made aware of the limit.
In the case of some types of limits, additional information is required, as discussed below.
Whenever dollar limits of the types addressed in this Appendix are employed, the state must afford
participants the opportunity to request a Fair Hearing in the event that they are denied waiver
services as a result of a dollar limit.

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Additional Information Requirements

As previously noted, certain additional information requirements attach to specific types of limits.
In particular:
Limit(s) on Set(s) of Waiver Services
In addition to the basic information specified above, explain the basis for the grouping of services
in each set. As a general matter, the services in a set should address participant needs that are
reasonably related. For example, clinical services might be grouped separately from daily support
services such as chore and homemaker services.
Prospective Individual Budget Amount
In addition to the basic information specified above:
• Specify the entity that determines the budget amount;
• Include a complete description of the participant-related factors that are taken into account
when determining the budget amount and how these factors affect the individual budget
amount. If assessment results are used in determining the budget amount, specify the types
of assessments that are employed;
• If the budget amount varies geographically, explain the basis for adjusting the budget based
on participant location; and,
• Describe how the methodology that is employed is open for public inspection. When a
formula is employed to determine the individual budget amount, the numeric values that are
inserted into the formula need not be disclosed as part of public inspection.
Budget Limits by Level of Support
In addition to the basic information specified above, describe:
• The levels of support or groupings that have been established and the basis for these
groupings;
• The procedures that are followed to assign participants to a level of support or participant
grouping, including the entity or entities responsible for determining the assignment of
individuals. If assessment results are used to assign individuals to groupings, specify the types
of assessments that are employed;
• Whether the budget limit varies geographically and, if applicable, the factors that are used to
adjust budget amounts based on geographic considerations; and,
• How the state makes its methodology for determining budget limits by level of support open
for public inspection. When a formula is employed to determine the budget amount, the
numeric values that are inserted into the formula need not be disclosed as part of public
inspection.
Other Type of Limit
In addition to the basic information specified above:
• Fully describe the limit and its basis;
• To the extent that the limit combines elements of the other types of limits addressed in this
Appendix, include the additional information associated with those types of limits. For
example, if the limit is structured by sets of services but also includes limits based on level

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of support within each set, include information about how individuals are assigned to each
level of support.

CMS Review Criteria

When reviewing this Appendix, CMS applies the following review criteria:

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CMS Review Criteria
General Criteria:
•
•

•
•
•

•
•

The waiver specifies the services to which the limit applies.
The method of determining the limit is objective and evidence based (e.g., the method
of determining the individual budget amount is based on the analysis of historical costs
and utilization and other factors that are likely to affect costs).
The waiver specifies the processes that are used to determine the amount of the limit to
which a participant’s services are subject.
The waiver specifies how the amount of the limit is adjusted during the period that the
waiver is in effect.
The waiver contains provisions for adjusting or making exceptions to the limit based
on participant health and welfare needs or other factors specified by the state. Any
criteria that are applied to adjust the budget are clear and explicit.
The waiver specifies safeguards that are in effect when the amount of the limit is
insufficient to meet a participant’s needs.
The waiver provides for notifying participants of the amount of the limit to which their
waiver services are subject.

Criteria Applicable to Specific Types of Limits
Limit(s) on Set(s) of Waiver Services
The services in the set to which the limit applies are reasonably related to one another.

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Prospective Individual Budget Amount
•
•
•
•
•

The waiver specifies the assessment and other participant information upon which the
individual budget amount is based.
The waiver explains how assessment and other participant information is employed in
determining he individual budget amount.
The entity responsible for determining the individual budget amount is identified.
If geographic factors affect the budget amount, the waiver explains how such
adjustments are made.
The waiver specifies how the methodology for determining the individual budget
amount is open for public inspection.

Budget Limits by Level of Support
•
•
•
•
•
•

The waiver specifies the levels of support or participant groupings that have been
established and the basis for such groupings.
The waiver specifies the procedures that are followed to assign participants to a level of
support or participant grouping.
The waiver specifies the entities responsible for determining the assignment of
individuals by level of support.
When assessment results are used to assign individuals to groupings, the waiver
specifies the types of assessments that are employed.
If geographic factors affect the budget amount, the waiver explains how such
adjustments are made.
The waiver specifies how the methodology for determining the budget limit based on
level of support amount is open for public inspection.

Other Type of Limit
Based on the nature of the other type of limit that is used, any of the foregoing criteria may
apply.

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Appendix C-5: Home and Community-Based
Settings Requirements
Overview
Since April 2008, CMS has engaged in ongoing discussions with stakeholders, states and federal
partners about the qualities of community-based settings that distinguish them from institutional
settings. As part of this stakeholder engagement, CMS issued a 1915(c) Waiver Advanced Notice
of Proposed Rule Making (ANPRM) and various proposed rules relating to home and communitybased services authorized by different sections of the Medicaid law, including 1915(c) HCBS
waivers, 1915(i) State Plan HCBS and 1915(k) Community First Choice State Plans. CMS’
definition of home and community-based settings has benefited from and evolved as a result of
this stakeholder engagement.
In final rules published on January 16, 2014, CMS moved away from defining home and
community-based settings by “what they are not,” and toward defining them by the nature and
quality of individuals’ experiences. The home and community-based setting provisions in the final
rules established a more outcome-oriented definition of home and community-based settings,
rather than one based solely on a setting’s location, geography, or physical characteristics. The
purpose of the home and community-based settings requirements is to maximize the opportunities
for participants in HCBS programs to have access to the benefits of community living and to
receive services in the most integrated setting. The requirements effectuate the law’s intention for
Medicaid HCBS to provide alternatives to services provided in institutions. States’ implementation
of these requirements will contribute significantly to the quality and experience of participants in
Medicaid HCBS waiver programs and will further expand their opportunities for meaningful
community integration in support of the goals of the Americans with Disabilities Act and the
Supreme Court’s decision in Olmstead v. L.C.
Instructions

This section was added to the waiver application for states to document state compliance with the final
regulations published on January 16, 2014 regarding the home and community-based (HCB) settings
requirements at 42 CFR 441.301(c)(4)-(5). In this section, states are to describe the settings where waiver
participants reside, where waiver services are provided, and how these settings meet the HCB setting
requirements at 42 CFR 441.301(c)(4)-(5). States must also specify how the state Medicaid agency
determined that the settings meet the HCB settings requirements at the time of submission to CMS, as well
as how the state will ensure that all settings will continue to meet the HCB settings requirements in the
future. This section includes a large text field (allows up to 60,000 characters), to ensure ample space for
the state’s response.

Technical Guidance
The HCB setting requirements support home and community-based settings that serve as an
alternative to institutional care and that take into account the quality of individuals’ experiences.
They require that all home and community-based settings meet certain qualifications, including,
at a minimum:
•

Is integrated in and supports full access to the greater community, including opportunities

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to seek employment and work in competitive integrated settings, engage in community life,
control personal resources, and receive services in the community, to the same degree of
access as individuals not receiving Medicaid HCBS;
•

Is selected by the individual from among setting options, including non-disability specific
settings and an option for a private unit in a residential setting. The setting options are
identified and documented in the person-centered service plan and are based on the
individual's needs, preferences, and, for residential settings, resources available for room
and board;

•

Ensures individual rights of privacy, dignity and respect, and freedom from coercion and
restraint;

•

Optimizes, but does not regiment, individual initiative, autonomy and independence in
making life choices; including but not limited to, daily activities, physical environment,
and with whom to interact;

•

Facilitates choice regarding services and who provides them.

The regulation also includes additional requirements for provider-owned or controlled home and
community-based residential settings. These requirements include ensuring:
•

The individual has a lease or other legally enforceable agreement providing similar
protections. The unit or dwelling is a specific physical place that can be owned, rented, or
occupied under a 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. For settings in which landlord tenant laws do not apply, the state must ensure that a
lease, residency agreement or other form of written agreement will be in place for each
HCBS participant, and that the document provides protections that address eviction
processes and appeals comparable to those provided under the jurisdiction's landlord tenant
law.

•

The individual has privacy in their sleeping or living unit including:

•
•
•

 Units have entrance doors lockable by the individual, with only appropriate staff having
keys to doors.
 Individuals sharing units have a choice of roommates in that setting.
 Individuals have the freedom to furnish and decorate their sleeping or living units
within the lease or other agreement.
The individual has the freedom and support to control his/her own schedule and activities,
including access to food at any time;
The individual can have visitors of their choosing at any time; and
The setting is physically accessible to the individual.

Any modification to these additional requirements for provider-owned home and communitybased residential settings must be supported by a specific assessed need and justified with
documentation in the person-centered service plan including the following:
•

Identify a specific and individualized assessed need.

•

Document the positive interventions and supports used prior to any modifications to the
person-centered service plan.

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•

Document less intrusive methods of meeting the need that have been tried but did not work.

•

Include a clear description of the condition that is directly proportionate to the specific
assessed need.

•

Include regular collection and review of data to measure the ongoing effectiveness of the
modification.

•

Include established time limits for periodic reviews to determine if the modification is still
necessary or can be terminated.

•

Include the informed consent of the individual.

•

Include an assurance that interventions and supports will cause no harm to the individual.

The regulations at 42 CFR 441.301(c)(5) excludes certain settings as permissible settings for the
provision of Medicaid home and community-based services. These excluded settings include
nursing facilities, institutions for mental disease, intermediate care facilities for individuals with
intellectual disabilities, and hospitals.Other Medicaid funding authorities support services
provided in these institutional settings.
The regulations 441.301(c)(5)(v) also identify other settings that are presumed to have institutional
qualities, and do not meet the threshold for Medicaid HCBS. These settings include:
• any setting that is located in a building that is also a publicly or privately-operated facility
that provides inpatient institutional treatment,
• any setting that is located 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.
If states seek to include such settings in a 1915(c) waiver, CMS will make a determination through
heightened scrutiny, based on information presented by the state demonstrating that the setting is
home and community-based and does not have the qualities of an institution. This process is
intended to be transparent and therefore, must include input and information from the public.
Settings that Isolate
Some settings have the effect of isolating individuals receiving HCBS from the broader
community. Settings that have the following two characteristics alone might, but will not
necessarily, meet the criteria for having the effect of isolating individuals:
• The setting is designed specifically for people with disabilities, and often even for people
with a certain type of disability.
• The individuals in the setting are primarily or exclusively people with disabilities and onsite staff provides many services to them.
Settings that isolate people receiving HCBS from the broader community may have any of the
following characteristics:
• The setting is designed to provide people with disabilities multiple types of services and
activities on-site, including housing, day services, medical, behavioral and therapeutic
services, and/or social and recreational activities.
• People in the setting have limited, if any, interaction with the broader community.

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• Settings that use/authorize interventions/restrictions that are used in institutional settings or
are deemed unacceptable in Medicaid institutional settings (e.g. seclusion).
The following is a non-exhaustive list of examples of residential settings that typically have the
effect of isolating people receiving HCBS from the broader community:
•

Farmstead or disability-specific farm community: These settings are often in rural areas
on large parcels of land, with little ability to access the broader community outside the
farm. Individuals who live at the farm typically interact primarily with people with
disabilities and staff who work with those individuals. Individuals typically live in
homes only with other people with disabilities and/or staff. Their neighbors are other
individuals with disabilities or staff who work with those individuals. Daily activities
are typically designed to take place on-site so that an individual generally does not leave
the farm to access HCB services or participate in community activities. For example,
these settings will often provide on-site a place to receive clinical (medical and/or
behavioral health) services, day services, places to shop and attend church services, as
well as social activities where individuals on the farm engage with others on the farm,
all of whom are receiving Medicaid HCBS. While sometimes people from the broader
community may come on-site, people from the farm do not go out into the broader
community as part of their daily life. Thus, the setting does not facilitate individuals
integrating into the greater community and has characteristics that isolate individuals
receiving Medicaid HCBS from individuals not receiving Medicaid HCBS.

•

Gated/secured “community” for people with disabilities: Gated communities typically
consist primarily of people with disabilities and the staff that work with them. Often,
these locations will provide residential, behavioral health, day services, social and
recreational activities, and long-term services and supports all within the gated
community. Individuals receiving HCBS in this type of setting often do not leave the
grounds of the gated community in order to access activities or services in the broader
community. Thus, the setting typically does not afford individuals the opportunity to
fully engage in community life and choose activities, services and providers that will
optimize integration into the broader community.

•

Residential schools: These settings incorporate both the educational program and the
residential program in the same building or in buildings in close proximity to each other
(e.g. two buildings side by side). Individuals do not travel into the broader community
to live or to attend school. Individuals served in these settings typically interact only
with other residents of the home and the residential and educational staff. Additional
individuals with disabilities from the community at large may attend the educational
program. Activities such as religious services may be held on-site as opposed to
facilitating individuals attending places of worship in the community. These settings
may be in urban areas as well as suburban and rural areas. Individuals experience in the
broader community may be limited to large group activities on “bus field trips.” The
setting therefore compromises the individual’s access to experience in the greater
community at a level that isolates individuals receiving Medicaid HCBS from
individuals not receiving Medicaid HCBS.

Multiple settings co-located and operationally related (i.e., operated and controlled by the same
provider) that congregate a large number of people with disabilities together and provide for
significant shared programming and staff, such that people’s ability to interact with the broader
community is limited. Depending on the program design, this could include, for example, group
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homes on the grounds of a private ICF or numerous group homes co-located on a single site or
close proximity (multiple units on the same street or a court, for example). In CMS’ experience,
most Continuing Care Retirement Communities (CCRCs), which are designed to allow aging
couples with different levels of need to remain together or close by, do not raise the same concerns
around isolation as the examples above, particularly since CCRCs typically include residents who
live independently in addition to those who receive HCBS.
More information regarding the home and community-based setting requirements is available on
the CMS website at:
https://www.medicaid.gov/medicaid/hcbs/guidance/index.html

CMS Review Criteria
The state’s description of settings where waiver participants reside and receive HCBS
demonstrates how the state will ensure that all HCB setting requirements at 42 CFR
441.301(c)(4)-(5) will be met and includes:
• A list of the specific settings where individuals will reside;
• A list of the specific settings where individuals will receive services;
• The process that the state Medicaid agency used to assess and determine that all waiver
settings meet the HCB settings requirements; and
• The process that the state Medicaid agency will use to ensure that all settings will continue
to meet the HCB settings requirements in the future.

Attachment: Core Service Definitions

Overview

This attachment contains core waiver service definitions that states may adapt when completing
Appendix C-3 (waiver service specification template) in the waiver application. Many of these
definitions are based on the service definitions contained in the 1995 standard waiver application
format. Definitions of additional services also are included. The definitions are listed in the
following order: (a) statutory services; (b) other services; (c) extended state plan services; and, (d)
services in support of participant direction. The “core definitions” specify the essential scope of
each service. States may modify or supplement the core definition in order to more precisely
reflect the nature and scope of each service included in a waiver. For example, if a core service
definition includes an activity that a state does not wish to provide, the activity may be removed.
The definitions are accompanied by instructions that specify coverage parameters that should be
addressed in the service definition. Also, as appropriate, guidance is included concerning service
coverage.
As noted in the instructions, states are not required to use these core service definitions. They are
suggested rather than mandatory definitions and are provided solely to assist states in waiver
design. A state may propose an alternate definition. However, each service must be fully described
and not described in open-ended terms. Alternate definitions will be reviewed by CMS to
determine whether the scope and nature of the service as defined is consistent with waiver service
coverage policy.
In addition, a state may propose to cover services beyond those that are included here. When
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coverage of another service is proposed, CMS will review the proposed coverage to ensure that
the service is necessary in order to avoid institutionalization and addresses participant needs that
stem from their disability or condition.
In Appendix C-3 of the waiver application, separate provision has been made for specifying
limitations on the amount, frequency and duration of waiver services (e.g., limiting respire care to
no more than 720 hours in a year). Such limitations should not be incorporated in the service
definition itself but instead specified in the appropriate location in the waiver service specification
template. However, limitations on the scope of the service should be included in the definition.
For example, if a service (e.g., personal assistance) is available only to participants who reside in
their own private residence, the limitation should be reflected in the service definition. Similarly,
any additional criteria that apply to the provision of a service also should be incorporated into the
definition (e.g., the provision of a service requires the determination by a professional that the
service is necessary to address specific participant needs). Also, do not include provider
qualifications in the service definition. Provider qualifications are specified separately in the
Appendix C-3 waiver service specification template.

A. Statutory Services

Statutory services are services specifically contained in §1915(c) of the Act and 42 CFR §440.180.
They also are listed in the Appendix C1/C3 Service Specification section of the web-based
application. Core service definitions are provided for each of these services. As discussed in the
instructions for Appendix C-1, a waiver is considered to cover a statutory service as long as the
state’s definition aligns with the core service definition included here, even though an alternate
title is used (e.g., support coordination instead of case management or attendant care instead of
personal care).

1. Case Management
Core Service Definition

Services that assist participants in gaining access to needed waiver and other state plan
services, as well as medical, social, educational and other services, regardless of the
funding source for the services to which access is gained.
Instructions
•
•

•

•

When case managers perform other activities/functions (e.g., crisis response) that are not
included in the core definition, specify the additional activities/functions.
When case managers are responsible for the ongoing monitoring of the provision of services
included in the participant’s service plan and/or participant health and welfare, include a
statement to that effect in the service definition.
When case managers are responsible for initiating the process to evaluate and/or re-evaluate
the individual's level of care and/or the development of service plans as specified in
Appendices B & D of the application, include a statement to that effect in the service
definition.
When the state claims the cost of case management furnished to institutionalized individuals
prior to their transition to the waiver (as provided in Olmstead Letter No.3 (see Attachment
D), include a statement to that effect in the service definition. Specify the period that such
services may be furnished. Providers may not bill for this service until the date of the

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•

person’s entry into the waiver program.
When case management includes providing supports to assist participants to direct their
services, specify the types of supports that case managers furnish. For example, a case
manager may have responsibility for monitoring the expenditure of funds included in the
participant-directed budget when the Budget Authority opportunity is provided under the
waiver.

Guidance
•

•

•

•

When case management is furnished as a waiver service, a state may not limit the providers
of case management to specific classes of entities (e.g., county human services agencies).
All willing and qualified providers must be offered a provider agreement. Participants must
be able to select from among all qualified providers.
When activities related to the assessment of level of care and service plan development are
furnished as waiver case management activities, payment for such services may not be made
until the individually is actually enrolled in the waiver.
The scope of case management services may not include activities/services that constitute
the provision of direct services to the participant that normally are covered as distinct
services.
Case management must comport with conflict of interest requirements at 42 CFR
441.301(1)(vi) and in accordance with Appendix D-1-b.

2. Homemaker Services
Core Service Definition

Services that consist of the performance of general household tasks (e.g., meal
preparation and routine household care) provided by a qualified homemaker, when the
individual regularly responsible for these activities is temporarily absent or unable to
manage the home and care for him or herself or others in the home.
Instructions
•
•

If homemaker services include other activities/functions that are not reflected in the core
definition, modify the core definition to specify the activities/ functions.
If homemaker services are limited to the performance of a specific household task(s), list the
specific task(s) in the definition.

Guidance
•

•

Homemaker services are distinguished from personal care services. Personal care services
include assistance in activities of daily living whereas homemaker services usually are
confined solely to the performance of household tasks.
The core service definition may be modified to include the performance of “chore-type”
services by a homemaker.

3. Home Health Aide Services
Background

Home health services are a mandatory state plan service. Home health aide services are a component of the
state plan coverage. In a waiver, a state may elect to furnish home health aide services that are different in
their scope and nature than the services offered under the state plan. Alternatively, if there are limitations

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on the amount, frequency and duration of the provision of home health aide services in the state plan, a
state may elect to provide additional services over and above those permitted under the state plan. Two
alternative core service definitions are provided depending on how the state elects to cover home health
aide services under the waiver.

Core Service Definition (Services differ in scope and nature from the state plan):
Services defined in 42 CFR §440.70 that are provided in addition to home health aide
services furnished under the approved state plan. Home health aide services under the
waiver differ in nature, scope, supervision arrangements, or provider type (including
provider training and qualifications) from home health aide services in the state plan.
The differences from the state plan are as follows:
Core Service Definition (Extended State Plan Service):
Services defined in 42 CFR §440.70 that are provided when home health aide services
furnished under the approved state plan limits are exhausted. The scope and nature of
these services do not differ from home health aide services furnished under the state plan.
Services are defined in the same manner as provided in the approved state plan. The
provider qualifications specified in the state plan apply. The additional amount of
services that may be provided through the waiver is as follows:
Instructions
•

•

If the only difference between the coverage of home health aide services under the state plan
and the waiver is that waiver services supplement state plan services over and above state
plan limitations on amount, duration and frequency, use the home health aide services
“extended state plan service” definition above. For example, if the state plan limits home
health aide services to no more than ten visits per month but the state wishes to provide for
additional visits for waiver participants, use the extended state plan service definition.
Specify the additional services that are provided when the state plan benefit is exhausted.
When the scope and nature of home health aide services under the waiver differ from the
coverage under the state plan, use the first core definition and specify how the scope and
nature of services differs from the state plan, including the other activities/functions that
home health aides perform in addition to those specified under the state plan.

Guidance
•

•

•

•

If home health aide services may be furnished outside the participant’s home, include a
statement to that effect in the service definition. This is an example of how the scope of
coverage may differ from the state plan.
One source of difference between the coverage of home health aide services under the state
plan and the waiver may arise from provider qualifications. Home health services (including
home health aide services) under the state plan may only be furnished by home health
agencies that meet the requirements for participation in Medicare, as. provided in 42 CFR
§489.28.
The coverage of home health aide services under a waiver does not permit a state to restrict
access by waiver participants to home health services that are offered under the state plan.
Waiver participants are entitled to receive all benefits for which they are eligible under the
state plan.
Home health aide services that can be covered under the state plan should be furnished to
waiver participants under age 21 as services required under EPSDT. rather than through the

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waiver.

4. Personal Care

Background
Personal care services are an optional benefit that a state may furnish under its state plan, as
provided in 42 CFR §440.167. A state may offer personal care under a waiver when: (a) it does
not offer personal care under its state plan; (b) its coverage under the waiver differs in scope and
nature from the coverage under the state plan; or, (c) the state wishes to furnish personal care
services in an amount, duration or frequency that exceed the limits in the state plan. Two core
service definitions are provided:
Core Service Definition (Services differ in scope and nature from personal care under the state plan
or personal care is not provided under the state plan):
A range of assistance to enable waiver participants to accomplish tasks that they would
normally do for themselves if they did not have a disability. This assistance may take the
form of hands-on assistance (actually performing a task for the person) or cuing to
prompt the participant to perform a task. Personal care services may be provided on an
episodic or on a continuing basis. Health-related services that are provided may include
skilled or nursing care and medication administration to the extent permitted by state
law.
Core Service Definition (Extended State Plan Service):
Services that are provided when personal care services furnished under the approved
state plan limits are exhausted. The scope and nature of these services do not differ from
personal care services furnished under the state plan. The provider qualifications
specified in the state plan apply. The additional amount of services that may be provided
through the waiver is as follows:
Instructions
•

•
•

•

If personal care under the waiver is furnished to supplement personal care under the state
plan but otherwise the scope of the coverage and who may provide the service is the same
as under the state plan, use the “extended state plan service” core definition. Specify the
additional amount of services that may be provided under the waiver.
When personal care services are not provided under the state plan, use the first core
definition.
When personal care is covered under the state plan but the scope and nature of personal care
furnished to waiver participants differs from the state plan, also use the first core definition
and include the following statement: “Personal care under the waiver differs in scope,
nature, supervision arrangements, and/or provider type (including provider training and
qualifications) from personal care services in the state plan.” Also, briefly describe the
differences between the waiver coverage and the state plan coverage.
When the first core definition is used, as appropriate, supplement the core definition by
specifying the types of assistance furnished. Such assistance may include assistance in
performing ADLs (bathing, dressing, toileting, transferring, maintaining continence) and
IADLs (more complex life activities, e.g. personal hygiene, light housework, laundry, meal
preparation, transportation, grocery shopping, using the telephone, medication and money
management). Such assistance also may include the supervision of participants as provided
in the service plan.

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•
•

•

•
•

If personal care is furnished outside the participant’s home, include a statement to that effect
in the first core definition.
A state may elect to make retainer payments to personal assistants when the waiver
participant is hospitalized or absent from his/her home for a period of no more than 30-days.
See Olmstead Update #3 (July 25, 2000) in Attachment D for additional information. If the
state elects to make such payments, describe the circumstances under which such payments
are authorized and applicable limits on their duration. For waivers offering participant
direction, states may permit the use of the retainer to afford direct support workers time off
from providing services to their employer.
Also with respect to the first core definition, when individuals who are not employed by a
provider agency may provide personal care, the service definition must specify who oversees
and supervises these individual providers (e.g., a registered nurse, case manager, and/or the
participant), and the frequency of supervision.
When personal care may be participant-directed, specify in the service definition the
responsibilities and authority of the participant to direct the delivery of personal care.
Personal care may be furnished to escort participants to participate in community activities
or access other services in the community if the state explains how it is incidental to the
personal care service in the service definition, and the costs for the transportation are
specified as a subcomponent of the personal care service in the Appendix J Factor D charts.
However, any transportation costs that are not associated with the provision of personal care
are not personal care services and thus, would have to be billed separately and may not be
included in the scope of personal care. Personal care aides may furnish and bill separately
for transportation provided that they meet the state’s provider qualifications for
transportation services, whether medical transportation under the state plan or non-medical
transportation under the waiver.

Guidance
•
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•

•
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•

Alternate service titles may be employed for personal care, including personal assistance and
attendant care.
It is not necessary to reflect in the service definition pertinent policies that apply to the
provision of personal care by legally responsible individuals or other family members/legal
guardians. These topics are addressed in the responses to Items C-2-d and C-2-e in Appendix
C-2 of the application.
The scope of personal care may include performing incidental homemaker and chore
services tasks. However, such activities may not comprise the entirety of the service. When
personal care services includes incidental homemaker and chore tasks, the state must have
mechanisms in place to ensure against duplication of payment if homemaker/chore services
are also a separate or component of another Medicaid service.
When personal care is included in the scope of another covered service (e.g., residential
habilitation or assisted living), a state may prohibit concurrent provision of personal care as
a distinct additional service when the participant receives the other service that includes
personal care.
Personal care may be furnished in order to assist a person to function in the work place or as
an adjunct to the provision of employment services.
When personal care services are offered under the state plan, a state may not restrict the
access of waiver participants to such services.
Personal care services that can be covered under the state plan should be furnished to waiver
participants under the age of 21 as services required under EPSDT.

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5. Adult Day Health

Core Service Definition
Services generally furnished 4 or more hours per day on a regularly scheduled basis, for
one or more days per week, or as specified in the service plan, in a non-institutional,
community-based setting, encompassing both health and social services needed to ensure
the optimal functioning of the participant. Meals provided as part of these services shall not
constitute a "full nutritional regimen" (3 meals per day).
Instructions

Supplement or modify the core definition as appropriate to encompass specific service
elements/activities furnished as adult day health under the waiver.
• If physical, occupational and/or speech/language therapies included in the participant’s
service plan are furnished as components of this service, include a statement to that effect in
the definition.
• If transportation between the participant's place of residence and the adult day health site is
provided as a component of adult day health services and the cost of this transportation is
included in the rate paid to adult day health providers, include a statement to that effect in
the definition.
• While adult day health services generally are provided for four or more hours per day, they
may be furnished for fewer hours. It also is not required that participants receive adult day
health services each day.
Habilitation Services
•

General Guidance

Habilitation may be covered as a distinct waiver service. Usually, however, the coverage of
habilitation takes the form of the coverage of day and residential habilitation as separate services.
In addition, states may cover enhanced habilitation services (supported employment, education,
and prevocational services). In general, when enhanced habilitation services are covered, they must
be covered as distinct services rather than combined as a single service. Core definitions are
provided for habilitation, residential habilitation, day habilitation, prevocational, supported
employment, and education.
While habilitation is frequently identified with the provision of services to persons with intellectual
disability and other related conditions, habilitation services (including enhanced habilitation
services) may be furnished to other target groups (e.g., persons who have experienced a brain
injury) who may benefit from them. Services that are habilitative in nature may not be covered
under the state Plan except in an ICF/IID.

6. Habilitation
Core Service Definition
Services designed to assist participants in acquiring, retaining and improving the self-help,
socialization and adaptive skills necessary to reside successfully in home and community-based
settings.
Instructions
•

Supplement or modify the core definition as appropriate to specify the specific service
elements/activities that are furnished as habilitation under the waiver.

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•

Specify the settings in which habilitation is furnished.

Guidance
•
•

•

Habilitation may be furnished in a home or other community setting.
When habilitation is provided as a single service (rather than broken down into component
parts), the provider qualifications specified must not have the effect of unnecessarily limiting
the providers of the service.
Retainer payments may be made to providers of habilitation while the waiver participant is
hospitalized or absent from his/her home for a period of no more than 30-days. See Olmstead
Update #3 (July 25, 2000) in Attachment D for additional information. If the state elects to
make such payments, describe the circumstances under which such payments are authorized
and applicable limits on their duration. Such payments are not permissible when the state
has included a cost-center in the rate paid to providers to address absences.

7. Residential Habilitation
Core Service Definition

Residential habilitation means individually tailored supports that assist with the
acquisition, retention, or improvement in skills related to living in the community. These
supports include adaptive skill development, assistance with activities of daily living,
community inclusion, transportation, adult educational supports, social and leisure skill
development, that assist the participant to reside in the most integrated setting
appropriate to his/her needs. Residential habilitation also includes personal care and
protective oversight and supervision.
Payment is not be made for the cost of room and board, including the cost of building
maintenance, upkeep and improvement. The method by which the costs of room and
board are excluded from payment for residential habilitation is specified in Appendix I5. Payment is not made, directly or indirectly, to members of the individual's immediate
family, except as provided in Appendix C-2.
Instructions
•
•

Supplement or modify the core definition as appropriate to encompass the specific service
elements/activities furnished as residential habilitation.
Residential habilitation may be furnished in the following living arrangements: participant’s
own home, the home of a relative, a semi-independent or supported apartment or living
arrangement, or a group home. Supplement the core definition by specifying the types of
settings where residential habilitation is furnished.

Guidance
•

•
•

Residential habilitation services may be provided in the participant’s living arrangement or
in the surrounding community, provided that such services do not duplicate services
furnished to a participant as other types of habilitation.
Provider owned or leased facilities where residential habilitation services are furnished must
be compliant with the Americans with Disabilities Act.
Home accessibility modifications when covered as a distinct service under the waiver may
not be furnished to individuals who receive residential habilitation services except when
such services are furnished in the participant’s own home. Compensation for the costs of
life safety code modifications and other necessary accessibility modifications that a provider
makes may be included in provider rate (as amortized costs) so long as they are necessary to

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meet the needs of residents and are not basic housing costs
Residential habilitation services may include the provision of medical and health care
services that are integral to meeting the daily needs of residents (e.g., routine administration
of medications by nurses or tending to the needs of residents who are ill or require attention
to their medical needs on an ongoing basis). The provision of such routine health services
and the inclusion of the payment for such services in the payment for residential habilitation
services is not considered to violate the requirement that a waiver may not cover services
that are available through the state plan. Medical and health care services such as physician
services that are not routinely provided to meet the daily needs of residents may not be
included.
Personal care/assistance or other similar services may be a component part of residential
habilitation services but may not comprise the entirety of the service. When personal care
or another similar service is covered as a distinct waiver service but also is furnished as a
component of residential habilitation, there must be mechanisms that prevent the duplicative
billing of the provision of personal care services.
If transportation between the participant's place of residence and other service sites or places
in the community is provided as a component of residential habilitation services and the cost
of this transportation is included in the rate paid to providers of residential habilitation
services, include a statement to that effect in the service definition.
Respite care may be made available to persons who receive residential habilitation or other
types of residential services under the waiver (e.g., adult foster care) for the relief of a
primary caregiver, provided that there is no duplication of payment. When respite is
furnished for the relief of a foster care provider, foster care services may not be billed during
the period that respite is furnished. Respite care may not be furnished for the purpose of
compensating relief or substitute staff for a waiver residential service. The costs of such staff
are met from payments for the waiver residential service.
Retainer payments may be made to providers of residential habilitation while the waiver
participant is hospitalized or absent from his/her home for a period of no more than 30-days.
See Olmstead Update #3 (July 25, 2000) in Attachment D for additional information. If the
state elects to make such payments, describe the circumstances under which such payments
are authorized and applicable limits on their duration.

8. Day Habilitation

Core Service Definition
Provision of regularly scheduled activities in a non-residential setting, separate from
the participant’s private residence or other residential living arrangement, such as
assistance with acquisition, retention, or improvement in self-help, socialization and
adaptive skills that enhance social development and develop skills in performing
activities of daily living and community living.
Activities and environments are designed to foster the acquisition of skills, building
positive social behavior and interpersonal competence, greater independence and
personal choice. Services are furnished consistent with the participant’s personcentered service plan. Meals provided as part of these services shall not constitute a
"full nutritional regimen" (3 meals per day).
Day habilitation services focus on enabling the participant to attain or maintain his or

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her maximum potential and shall be coordinated with any needed therapies in the
individual’s person-centered service plan, such as physical, occupational, or speech
therapy.
Instructions
•
•

•

Supplement or modify the core definition as appropriate to specify service
elements/activities furnished as day habilitation under the waiver.
Day habilitation may be furnished in any of a variety of settings in the community other than
the person’s private residence. Day habilitation services are not limited to fixed-site
facilities. Supplement the core definition by specifying where day habilitation is furnished.
If transportation between the participant’s place of residence and the day habilitation site, or
other community settings in which the service is delivered, is provided as a component part
of day habilitation services and the cost of this transportation is included in the rate paid to
providers of day habilitation services, the service definition must include a statement to that
effect in the definition.

Guidance
•
•
•

•

•

•

•

Day habilitation may not provide for the payment of services that are vocational in nature
(i.e., for the primary purpose of produces goods or performing services).
Personal care/assistance may be a component part of day habilitation services as necessary
to meet the needs of a participant but may not comprise the entirety of the service.
Participants who receive day habilitation services may also receive educational, supported
employment and prevocational services. A participant’s person-centered service plan may
include two or more types of non-residential habilitation services. However, different types
of non-residential habilitation services may not be billed during the same period of the day.
Day habilitation services may be furnished to any individual who requires them and chooses
them through a person-centered planning process. Such services are not limited to persons
with intellectual or. developmental disabilities.
For individuals with degenerative conditions, day habilitation may include training and
supports designed to maintain skills and functioning and to prevent or slow regression rather
than acquiring new skills or improving existing skills
Day habilitation services may also be used to provide supported retirement activities.
As some people get older, they may no longer desire to work and may need supports
to assist them in meaningful retirement activities in their communities. This might
involve altering schedules to allow for more rest time throughout the day, support to
participate in hobbies, clubs and/ or other senior related activities in their
communities.
If states wish to cover “career planning” activities, they may choose to include it as a
component part of day habilitation services, or it may be broken out as a separate standalone
service definition.

9. Education

Core Service Definition
Educational services consist of special education and related services as defined in
Sections (22) and (25) of the Individuals with Disabilities Education Improvement Act of
2004 (IDEA) (20 U.S.C. 1401 et seq.), to the extent to which they are not available under
a program funded by IDEA. Documentation is maintained in the file of each individual
receiving this service that the service is not otherwise available under section 110 of the
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Rehabilitation Act of 1973 or the IDEA.
Instructions
•

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•

If transportation between the participant's place of residence and the educational services
site is provided as a component of education services and the cost of this transportation is
included in the rate paid to providers of education services, include a statement to that effect
in the service definition.
Supplement or modify the core definition as appropriate to specify the service
elements/activities that are furnished under the waiver and where education services are
furnished.
Supplement the core definition to specify the process by which it will be determined that
education services do not fall within the requirements of the IDEA.

Guidance
•

•

The IDEA requires the provision of comprehensive education and related services to
children and youth with disabilities who are enrolled in special education programs. As a
consequence, when a state proposes to include education services in its waiver, CMS will
review the proposed waiver coverage to ensure that it does not provide for the payment of
services that are mandated under IDEA.
§1903(c)(3) of the Act permits Medicaid payment for services included in an eligible child’s
Individualized Education Plan (IEP). However, this provision is limited to services that are
provided under the state plan and does not include services that are furnished under the
§1915(c) waiver authority. Consequently, HCBS waiver FFP may not be claimed for
services included in a child’s IEP.

10. Prevocational Services
Core Service Definition
Services that provide learning and work experiences, including volunteer work, where the
individual can develop general, non-job-task-specific strengths and skills that contribute to
employability in paid employment in integrated community settings. Services are expected to
occur over a defined period of time and with specific outcomes to be achieved, as determined by
the individual and his/her service and supports planning team through an ongoing personcentered planning process, to be reviewed not less than annually or more frequently as requested
by the individual. Individuals receiving prevocational services must have employment-related
goals in their person-centered service plan; the general habilitation activities must be designed to
support such employment goals. Competitive, integrated employment in the community for which
an individual is compensated at or above the minimum wage, but not less than the customary wage
and level of benefits paid by the employer for the same or similar work performed by individuals
without disabilities is considered to be the successful outcome of prevocational services.
Prevocational services should enable each individual to attain the highest level of work in the most
integrated setting and with the job matched to the individual’s interests, strengths, priorities,
abilities, and capabilities, while following applicable federal wage guidelines. Services are
intended to develop and teach general skills that lead to competitive and integrated employment
including, but not limited to: ability to communicate effectively with supervisors, co-workers and
customers; generally accepted community workplace conduct and dress; ability to follow
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directions; ability to attend to tasks; workplace problem solving skills and strategies; general
workplace safety and mobility training.
Participation in prevocational services is not a required pre-requisite for individual or small
group supported employment services provided under the waiver. Many individuals, particularly
those transitioning from school to adult activities, are likely to choose to go directly into supported
employment. Similarly, the evidence-based Individual Placement and Support (IPS) model of
supported employment for individuals with behavioral health conditions emphasizes rapid job
placement in lieu of prevocational services.
Documentation is maintained in the file of each individual receiving this service that the service
is not available under a program funded under section 110 of the Rehabilitation Act of 1973 or
the IDEA (20 U.S.C. 1401 et seq.).
Instructions
•
•

•

•

Supplement or modify the core definition as appropriate to incorporate the specific service
elements furnished under the waiver.
Prevocational services may be furnished in a variety of locations in the community and are
not limited to fixed-site facilities. Specify in the service definition where these services are
furnished.
If transportation between the participant's place of residence and the prevocational services
site/s is provided as a component part of prevocational services and the cost of this
transportation is included in the rate paid to providers of prevocational services, the service
definition must include a statement to that effect.
Specify in the definition how the determination is made that the services furnished to the
participant are prevocational rather than vocational in nature in accordance with 42 CFR
§440.180(c)(2)(i).

Guidance
• Pre-vocational services include activities that are not primarily directed at teaching skills to

perform a particular job, but at underlying habilitative goals (e.g., attention span, motor skills,
interpersonal relations with co-workers and supervisors) that are associated with building skills
necessary to perform compensated work in community integrated employment. Vocational
services, which are not covered through waivers, are services that teach job task specific skills
required by a participant for the primary purpose of completing those tasks for a specific facilitybased job and are not delivered in an integrated work setting through supported employment. The
distinction between vocational and pre-vocational services is that pre-vocational services,
regardless of setting, are delivered for the purpose of furthering habilitation goals that will lead to
greater opportunities for competitive and integrated employment and career advancement at or
above minimum wage. These goals are described in the individual’s person-centered services and
supports plan and are designed to teach skills that will lead to integrated competitive employment.
•

•

A person receiving pre-vocational services may pursue employment opportunities at any
time to enter the general work force. Pre-vocational services are intended to assist
individuals to enter the general workforce.
Individuals participating in prevocational services may be compensated in accordance with
applicable federal laws and regulations and the provision of prevocational services is always

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delivered with the intention of leading to permanent integrated employment at or above the
minimum wage in the community.
All prevocational and supported employment service options should be reviewed and
considered as a component of an individual’s person-centered services and supports plan no
less than annually, more frequently as necessary or as requested by the individual. These
services and supports should be designed to support successful employment outcomes
consistent with the individual’s goals.
Personal care/assistance may be a component of prevocational services but may not
comprise the entirety of the service.
Individuals who receive prevocational services may also receive educational, supported
employment and/or day habilitation services. A participant’s person-centered service plan
may include two or more types of non-residential habilitation services. However, different
types of non-residential habilitation services may not be billed during the same period of the
day.
If states wish to cover “career planning” activities, they may choose to include it as a
component part of pre-vocational services, or it may be broken out as a separate stand-alone
service definition.
Prevocational services may include volunteer work, such as volunteer learning and training
activities that prepare a person for entry into the paid workforce.
Prevocational services are not limited to persons with intellectual or developmental
disabilities.

11-a Supported Employment - Individual Supported Employment

Core Service Definition
Supported Employment -Individual Employment Support services are the ongoing supports to
participants who, because of their disabilities, need intensive on-going support to obtain and
maintain an individual job in competitive or customized employment, or self-employment, in an
integrated work setting in the general workforce at or above the state’s minimum wage, at or above
the customary wage and level of benefits paid by the employer for the same or similar work
performed by individuals without disabilities. The outcome of this service is sustained paid
employment at or above the minimum wage in an integrated setting in the general workforce, in a
job that meets personal and career goals.
Supported employment services can be provided through many different service models. Some of
these models can include evidence-based supported employment for individuals with mental
illness, or customized employment for individuals with significant disabilities. States may define
other models of individualized supported employment that promote community inclusion and
integrated employment.
Supported employment individual employment supports may also include support to establish or
maintain self-employment, including home-based self-employment. Supported employment
services are individualized and may include any combination of the following services:
vocational/job-related discovery or assessment, person-centered employment planning, job
placement, job development, negotiation with prospective employers, job analysis, job carving,
training and systematic instruction, job coaching, benefits and work-incentives planning and
management, transportation, asset development and career advancement services. Other
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workplace support services including services not specifically related to job skill training that
enable the waiver participant to be successful in integrating into the job setting.
Documentation is maintained in the file of each individual receiving this service that the service
is not available under a program funded under section 110 of the Rehabilitation Act of 1973 or
the IDEA (20 U.S.C. 1401 et seq.).
Federal financial participation is not claimed for incentive payments, subsidies, or
unrelated vocational training expenses such as the following:
1. Incentive payments made to an employer to encourage or subsidize the employer's
participation in supported employment; or
2. Payments that are passed through to users of supported employment services.
Instructions
•
•

•

Supplement or modify the core definition as appropriate to incorporate the specific service
elements furnished in the waiver.
Supported employment individual employment supports is not intended for people
working in mobile work crews of small groups of people with disabilities in the
community. That type of work support is addressed in the core service definition for
Supported Employment Small Group employment support.
If transportation between the participant's place of residence and the employment site as a
component part of supported employment individual employment services and the cost of
this transportation is included in the rate paid to providers of supported employment
individual employment supports services, the service definition must include a statement to
that effect.

Guidance
•

•

•

•

Statewide rate setting methodologies, which are further described in I-2-a of the waiver
application may be used to embrace new models of support that help a person obtain and
maintain integrated employment in the community. These may include co-worker support
models, payments for work milestones, such as length of time on the job, number of hours
the participant works, etc. Payments for work milestones are not incentive payments that
are made to an employer to encourage or subsidize the employer’s hiring an individual
with disabilities, which is not permissible.
Supported employment individual employment supports does not include facility based, or
other similar types of vocational services furnished in specialized facilities that are not a
part of the general workplace.
In addition to the need for an appropriate job match that meets the individual’s skills and
interests, individuals with the most significant disabilities may also need long term
employment support to successfully maintain a job due to the ongoing nature of the waiver
participant’s support needs, changes in life situations, or evolving and changing job
responsibilities.
All prevocational and supported employment service options should be reviewed and
considered as a component of an individual’s person-centered services and supports plan
no less than annually, more frequently as necessary or as requested by the individual. These
services and supports should be designed to support successful employment outcomes
consistent with the individual’s goals.

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Supported employment individual employment supports do not include volunteer work.
Such volunteer learning and training activities that prepare a person for entry into the paid
workforce are addressed through pre-vocational services.
Supported employment individual employment supports do not include payment for
supervision, training, support and adaptations typically available to other workers without
disabilities filling similar positions in the business.
Supported employment individual employment supports may be provided by a co-worker
or other job site personnel provided that the services that are furnished are not part of the
normal duties of the co-worker, supervisor or other personnel and these individuals meet
the pertinent qualifications for the providers of service.
Personal care/assistance may be a component part of supported employment individual
employment supports but may not comprise the entirety of the service.
Supported employment individual employment supports may include services and supports
that assist the participant in achieving self-employment through the operation of a business;
however, Medicaid funds may not be used to defray the expenses associated with starting
up or operating a business. Assistance for self-employment may include: (a) aid to the
participant in identifying potential business opportunities; (b) assistance in the
development of a business plan, including potential sources of business financing and other
assistance in including potential sources of business financing and other assistance in
developing and launching a business; (c) identification of the supports that are necessary
in order for the participant to operate the business; and (d) ongoing assistance, counseling
and guidance once the business has been launched.
Individuals receiving supported employment individual employment supports services
may also receive educational, pre-vocational and/or day habilitation services and career
planning services. A participant’s person-centered services and supports plan may include
two or more types of non-residential habilitation services. However, different types of nonresidential habilitation services may not be billed during the same period of time.
If states wish to cover “career planning” they may choose to include it as a component part
of supported employment individualized employment support services, or it may be broken
out as a separate standalone service definition.
Supported employment individual employment supports may be furnished to any
individual who requires and chooses them through a person-centered planning process.
They are not limited to persons with intellectual or developmental disabilities.

11-b Supported Employment – Small Group Employment Support

Core Service Definition
Supported Employment Small Group employment support are services and training activities
provided in regular business and industry settings for groups of two (2) to eight (8) workers with
disabilities. Small group employment support does not include services provided in facility-based
work settings. Examples include mobile crews and other business-based workgroups employing
small groups of workers with disabilities in integrated employment in the community. The outcome
of this service is sustained paid employment and work experience leading to further career
development and individual integrated community-based employment for which an individual is

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compensated at or above the minimum wage, but not less than the customary wage and level of
benefits paid by the employer for the same or similar work performed by individuals without
disabilities.
Supported employment small group employment supports may include any combination of the
following services: vocational/job-related discovery or assessment, person-centered employment
planning, job placement, job development, negotiation with prospective employers, job analysis,
training and systematic instruction, job coaching, benefits management, transportation and career
advancement services. Other workplace support services may include services not specifically
related to job skill training that enable the waiver participant to be successful in integrating into
the job setting. Supported employment small group employment support must be provided in a
manner that promotes integration into the workplace and interaction between participants and
people without disabilities in those workplaces.
Documentation is maintained in the file of each individual receiving this service that the service
is not available under a program funded under section 110 of the Rehabilitation Act of 1973 or
the IDEA (20 U.S.C. 1401 et seq.).
Federal financial participation is not claimed for incentive payments, subsidies, or
unrelated vocational training expenses such as the following:
1. Incentive payments made to an employer to encourage or subsidize the employer's
participation in supported employment services; or
2. Payments that are passed through to users of supported employment services.
Instructions
•
•

Supplement or modify the core definition as appropriate to incorporate the specific
service elements furnished in the waiver.
If transportation between the participant's place of residence and the employment site is a
component part of supported employment services small group employment support and
the cost of this transportation is included in the rate paid to providers of supported
employment small group employment supports services, the service definition must
include a statement to that effect.

Technical Guidance
•

•

•

•

Supported employment small group employment support does not include facility-based
work settings or other similar types of vocational services furnished in specialized facilities
that are not a part of general community workplaces.
Supported employment small group employment supports do not include volunteer work.
Such volunteer learning and training activities that prepare a person for entry into the paid
workforce are addressed through pre-vocational services.
Supported employment small group employment support does not include payment for
supervision, training, support and adaptations typically available to other workers without
disabilities filling similar positions in the business.
Supported employment small group employment support services may be provided by a
co-worker or other job site personnel provided that the services that are furnished are not

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part of the normal duties of the co-worker, supervisor or other personnel and these
individuals meet the pertinent qualifications for the providers of service.
Personal care/assistance may be a component part of supported employment small group
employment support services but may not comprise the entirety of the service.
All prevocational and supported employment service options should be reviewed and
considered as a component of an individual’s person-centered services and supports plan
no less than annually, more frequently as necessary or as requested by the individual. These
services and supports should be designed to support successful employment outcomes
consistent with the individual’s goals.
Individuals receiving supported employment small group employment support services
may also receive educational, prevocational and/or day habilitation services and career
planning services. A participant’s person-centered services and supports plan may include
two or more types of non-residential habilitation services. However, different types of nonresidential habilitation services may not be billed during the same period of time.
If states wish to cover “career planning” they may choose to include it as a component part
of supported employment small group employment support services, or it may be broken
out as a separate standalone service definition.
Supported employment small group employment support services may be furnished to any
individual who requires and chooses them. They are not limited to persons with intellectual
or developmental disabilities.

12. Respite Care

Core Service Definition
Services provided to participants unable to care for themselves that are furnished on a
short-term basis because of the absence or need for relief of those persons who normally
provide care for the participant. Federal financial participation is not to be claimed for
the cost of room and board except when provided as part of respite care furnished in a
facility approved by the state that is not a private residence.
Instructions
•
•

•

Supplement or modify the core definition as appropriate to incorporate specific service
elements under the waiver.
The service definition must specify the location(s) where respite care is provided. These
locations may include (but are not limited to):
 Participant’s home or private place of residence
 The private residence of a respite care provider
 Foster home
 Medicaid certified Hospital
 Medicaid certified Nursing Facility
 Medicaid certified ICF/IID
 Group home
 Licensed respite care facility
 Other community care residential facility approved by the state that is not a
private residence. Specify the types of these facilities where respite is provided.
The service definition must specify the location(s) (if any) where FFP is claimed for the cost

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of room and board. FFP may not be claimed for room and board when respite is provided
in the participant’s home or place of residence.
Guidance

Receipt of respite care does not necessarily preclude a participant from receiving other
services on the same day. For example, a participant may receive day services (such as
supported employment, adult day care, personal care, nursing care, etc.) on the same day as
he/she receives respite care. Payment may not be made for respite furnished at the same
time when other services that include care and supervision are provided.
• Respite care may be made available to persons who receive residential habilitation or other
types of residential services under the waiver (e.g., adult foster care) for the relief of a
primary caregiver, provided that there is no duplication of payment. When respite is
furnished for the relief of a foster care provider, foster care services may not be billed during
the period that respite is furnished. Respite care may not be furnished for the purpose of
compensating relief or substitute staff for a waiver residential service. The costs of such
staff are met from payments for the waiver residential service.
Mental Health Services
•

42 CFR §440.180(b)(8) provides that a state may furnish under a waiver certain services (day treatment,
partial hospitalization, psychosocial rehabilitation, and clinic services) to individuals with chronic mental
illness. A state may offer other types of mental health services in addition to these as “other” waiver
services. However, the provision of mental health services under a waiver is not limited to persons who
have a primary diagnosis of chronic mental illness. They may be furnished to any participant who requires
them regardless of waiver target group. As is the case with other services, mental health services under a
waiver may be furnished on an “extended state plan services” coverage basis or may provide for the
coverage of services furnished that differ from state plan services.
Mental health services offered under the state plan sometimes are limited to Medicaid beneficiaries who
have been diagnosed as having serious (severe or persistent) mental illnesses. Under a waiver, a state may
offer mental health services to persons who would benefit from them but who do not meet state plan criteria.
When a state proposes to cover mental health services under a waiver, CMS will review the state plan to
ensure that the proposed coverage does not duplicate the coverage under the state plan. In the case of
waivers that serve individuals under age 21, this review also will encompass the extent to which the
proposed mental health services can be provided under the state plan and, therefore, should be furnished
as. services required under EPSDT.

13. Day Treatment
Core Service Definition
Services that are necessary for the diagnosis or treatment of the individual's mental
illness. The purpose of this service is to maintain the individual's condition and functional
level and to prevent relapse or hospitalization. These services consist of the following
elements:
a. individual and group therapy with physicians or psychologists (or other mental health
professionals to the extent authorized under state law);
b. occupational therapy, requiring the skills of a qualified occupational therapist;
c. services of social workers, trained psychiatric nurses, and other staff trained to work
with individuals with psychiatric illness;
d. drugs and biologicals furnished for therapeutic purposes, provided that the medication
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is not otherwise available under the state plan or as a Medicare benefit to a participant;
e. individual activity therapies that are not primarily recreational or diversionary,
f. family counseling (the primary purpose of which is treatment of the individual's
condition);
g. training and education of the individual (to the extent that training and educational
activities are closely and clearly related to the individual's care and treatment); and,
h. diagnostic services.
Meals provided as part of these services shall not constitute a "full nutritional regimen" (3 meals per
day).

Core Service Definition (Extended State Plan Service):
When day treatment or partial hospitalization services are covered under the waiver on an
“extended state plan service” basis (e.g., the services furnished differ from the state plan coverage
only in amount, duration and frequency but not scope or type of provider), employ the following
alternate service core service definition:
Services that are provided when day treatment services furnished under the approved state plan limits are
exhausted. The scope and nature of these services do not differ from day treatment services furnished under
the state plan. The provider qualifications specified in the state plan apply. The additional amount of
services that may be provided through the waiver is as follows:
Instructions
•
•

•

Supplement or modify the core definition’s list of service elements as appropriate to reflect
the specific service elements covered under the waiver.
If transportation between the participant's place of residence and the day treatment is
provided as a component part of day treatment/partial hospitalization services and the cost
of this transportation is included in the rate paid to providers of these services, include a
statement to that effect in the service definition.
In the definition, specify whether these services are only furnished to individuals with
chronic mental illness or whether they are available to all individuals served on this waiver
who may require them, whether or not they have a formal diagnosis of chronic (serious)
mental illness.

If day treatment services are covered under the state plan but the waiver coverage is different, include the
following statement in the service definition: “Day treatment (partial hospitalization) services under the
waiver differ in nature, scope, supervision arrangements, or provider type (including provider training
and qualifications) from day treatment (partial hospitalization) services in the state plan.” Also, specify
the differences between the waiver and the state plan coverage. If day treatment or partial hospitalization
is not covered under the state plan, do not include this statement.

14. Psychosocial Rehabilitation Services
Core Service Definition
Medical or remedial services recommended by a physician or other licensed practitioner
of the healing arts under state law, for the maximum reduction of physical or mental
disability and the restoration of maximum functional level. Specific services include the
following:
a. restoration and maintenance of daily living skills (grooming, personal hygiene, cooking,
nutrition, health and mental health education, medication management, money
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management and maintenance of the living environment);
b. social skills training in appropriate use of community services;
c. development of appropriate personal support networks, therapeutic recreational
services (which are focused on therapeutic intervention rather than diversion); and,
d. telephone monitoring and counseling services.
The following are specifically excluded from payment for psychosocial rehabilitation
services:
a.
b.
c.
d.

vocational services,
prevocational services,
supported employment services, and
room and board.

Core Service Definition (Extended State Plan Service):
When psychosocial rehabilitation services are covered under the waiver solely on an “extended
state plan service” basis (e.g., the services furnished differ from the state plan coverage only in
amount, duration and frequency but not scope or type of provider), use the following alternate
service core service definition:
Services that are provided when psychosocial rehabilitation services furnished under
the approved state plan limits are exhausted. The scope and nature of these services
do not differ from psychosocial services furnished under the state plan. The provider
qualifications specified in the state plan apply. The additional amount of services that
may be provided through the waiver is as follows:
Instructions
•
•

•

•

Supplement or modify the core definition list of service elements as appropriate to reflect
the specific service elements covered under the waiver.
In the definition, specify whether these services are only furnished to individuals with
chronic mental illness or whether they are made available to all waiver participants who need
the service, whether or not they have a formal diagnosis of chronic (serious) mental illness.
Psychosocial rehabilitation services may be furnished in any of a variety of locations in the
community, including the participant’s own home, provider-operated living arrangements
and other community settings. In the service definition, specify where these services will be
furnished. When services are furnished in a residence, federal financial participation may
not be claimed for the cost of room and board.
If psychosocial rehabilitation services (mental health rehabilitation services) are covered
under the state plan but the waiver coverage is different, include the following in the service
definition: “Psychosocial rehabilitation services under the waiver differ in nature, scope,
supervision arrangements, or provider type (including provider training and qualifications)
from psychosocial rehabilitation services in the state plan.” Also, specify the differences
between the waiver coverage and the state plan coverage. If psychosocial rehabilitation
services are not covered under the state plan, do not include this statement.

Guidance
•

•

The term “psychosocial rehabilitation services” subsumes the various types of mental health
services that may be covered as rehabilitative services in the state plan under 42 CFR
§440.130.
Participants who are furnished psychosocial rehabilitation services may be provided

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prevocational and/or supported employment services when such services are included in the
waiver as enhanced habilitation services. However, these services may not be combined
with psychosocial rehabilitation services.

15. Clinic Services

Core Service Definition
Clinic services (whether or not furnished in a facility) are services as defined in
42 CFR §440.90.
Instructions

In the definition, specify whether these services are only furnished to individuals with
chronic mental illness or whether they are made available to all individuals served on this
waiver, whether or not they have a formal diagnosis of chronic (serious) mental illness.
• In the definition, specify whether clinic services may only be furnished on the premises of a
clinic or may be furnished outside the clinic facility. If services may be furnished offsite,
specify the locations where they may be furnished.
• If (mental health) clinic services are covered under the state plan but the waiver coverage is
different, include the following statement in the service definition: “Clinic services under
the waiver differ in nature, scope, supervision arrangements, or provider type (including
provider training and qualifications) from clinic services in the state plan.” Also, specify
the differences between the waiver coverage and the state plan coverage. One way that the
coverage of clinic services under the waiver may differ from coverage under the state plan
is when services are furnished off-site from the clinic. Describe the difference between the
waiver and the state plan coverage.
• When mental health clinic services are covered under the waiver only on an “extended state
plan service” basis (e.g., the services furnished differ from the state plan coverage only in
amount, duration and frequency but not scope), employ the following alternate service core
service definition:
Core Service Definition (Extended State Plan Service):
•

Services that are provided when mental health clinic services (as defined in 42 CFR §440.90) furnished
under the approved state plan limits are exhausted. The scope and nature of these services do not otherwise
differ from clinic services furnished under the state plan. The provider qualifications specified in the state
plan apply. The additional amount of services that may be provided through the waiver is as follows:
(specify)

16. Live-in Caregiver
Core Service Definition
The payment for the additional costs of rent and food that can be reasonably attributed
to an unrelated live-in personal caregiver who resides in the same household as the
waiver participant. Payment will not be made when the participant lives in the
caregiver’s home or in a residence that is owned or leased by the provider of Medicaid
services.
Instructions
•
•

In the revised waiver application, live-in caregiver is treated as a service that must be
included in the listing of services in Appendix C-1.
Method of determining the amount paid is specified in Appendix I-6.

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•

The expected costs and utilization of live-in care giver payments must be accounted for as a
distinct item in the computation of Factor D in Appendix J-2.

B. Other Services

Other services are services that are not: (a) statutory services; (b) extended state plan services; or, (c)
services in support of participant direction.

1. Home Accessibility Adaptations (a.k.a., environmental accessibility adaptations)
Core Service Definition

Those physical adaptations to the private residence of the participant or the participant’s family,
required by the participant's service plan, that are necessary to ensure the health, welfare and
safety of the participant or that enable the participant to function with greater independence in
the home. Such adaptations include the installation of ramps and grab-bars, widening of
doorways, modification of bathroom facilities, or the installation of specialized electric and
plumbing systems that are necessary to accommodate the medical equipment and supplies that
are necessary for the welfare of the participant.
Excluded are those adaptations or improvements to the home that are of general utility and are not of direct
medical or remedial benefit to the participant. Adaptations that add to the total square footage of the home
are excluded from this benefit except when necessary to complete an adaptation (e.g., in order to improve
entrance/egress to a residence or to configure a bathroom to accommodate a wheelchair).
Instructions
•
•

•

Supplement or modify the core definition list of service elements as appropriate to reflect
the specific service elements covered under the waiver.
An exhaustive listing of the specific adaptations may be included in the definition rather than
the more general types of adaptations contained in the definition. In the core definition, the
sentence beginning “Such adaptations …” may be deleted and the sentence “Adaptations
include:” substituted, followed by the exhaustive listing of the specific home adaptations
included in the coverage.
The scope of home accessibility modifications may include the performance of necessary
assessments to determine the types of modifications that are necessary. The cost estimates
and claiming for this activity would need to be itemized separately in Appendix J as a cost
component of the service.

Guidance
•
•

Home accessibility adaptations may not be furnished to adapt living arrangements that are
owned or leased by providers of waiver services.
When, as provided in Olmstead Letter No. #3 (see Attachment D to the Instructions), the
state authorizes home accessibility modifications up to 180 consecutive days of admission
in advance of the community transition of an institutionalized person, the definition should
reflect that provision has been made for such modifications. In such cases, the home
modification begun while the person was institutionalized is not considered complete, and
may not be billed until, the date the individual leaves the institution and enters the waiver.

2. Vehicle Modifications

Core Service Definition
Adaptations or alterations to an automobile or van that is the waiver participant’s primary
means of transportation in order to accommodate the special needs of the participant. Vehicle
adaptations are specified by the service plan as necessary to enable the participant to integrate

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more fully into the community and to ensure the health, welfare and safety of the participant.
The following are specifically excluded:
1. Adaptations or improvements to the vehicle that are of general utility, and are not of
direct medical or remedial benefit to the individual;
2. Purchase or lease of a vehicle; and
3. Regularly scheduled upkeep and maintenance of a vehicle except upkeep and
maintenance of the modifications.
Instructions
•

•

Modify or supplement the core definition to reflect the scope of vehicle modifications
furnished under the waiver. If such modifications are limited to specific modifications, list
the modifications for which payment will be made.
The scope of vehicle modifications may include the performance of necessary assessments
to determine the types of modifications that are necessary. The cost estimates and claiming
for this activity would need to be itemized separately in Appendix J as a cost component of
the service.

Guidance
•

The vehicle that is adapted may be owned by the individual, a family member with whom
the individual lives or has consistent and on-going contact, or a non-relative who provides
primary long-term support to the individual and is not a paid provider of such services.

•

Payment may not be made to adapt the vehicles that are owned or leased by paid providers
of waiver services. The costs of necessary adaptations to provider vehicles may be
compensated in the payment rate for transportation or other services (e.g., day habilitation)
that include the cost of transportation.

3. Non-Medical Transportation
Core Service Definition

Service offered in order to enable waiver participants to gain access to waiver and other community
services, activities and resources, as specified by the service plan. This service is offered in addition to
medical transportation required under 42 CFR §431.53 and transportation services under the state plan,
defined at 42 CFR §440.170(a) (if applicable), and does not replace them. Transportation services under
the waiver are offered in accordance with the participant’s service plan. Whenever possible, family,
neighbors, friends, or community agencies which can provide this service without charge are utilized.
Instructions
•
•

Modify or supplement the core definition to reflect the scope of non-medical transportation
furnished under the waiver.
If transportation services are limited to specific situations, specify when transportation
services are furnished in the definition.

Guidance
•

Waiver transportation services may not be substituted for the transportation services that a
state is obligated to furnish under the requirements of 42 CFR §431.53. For example,
transportation of a waiver participant to receive medical care that is provided under the state
plan must be billed as a state plan transportation service or charged as an administrative
expense, not as a waiver service. Payment for transportation under the waiver is limited to
the costs of transportation needed to access a waiver service included in the participant’s
service plan or access other activities and resources identified in the service plan.

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•

•
•

When the costs of transportation are included in the provider rate for another waiver service
(e.g., adult day health), there must be mechanisms to prevent the duplicative billing of nonmedical transportation services.
Non-medical transportation services may be furnished to waiver participants under
age 21.
If some providers have capacity to transport and it is incidental to the service the provider is
delivering, then the state would need to incorporate the cost of transportation into the rate or
add a cost component to cover it. If there are also providers that don’t have the capacity to
transport, then the state should reflect the different reimbursement methodologies in
Appendix I, and the range of cost estimates in Appendix J.

4. Specialized Medical Equipment and Supplies
Core Service Definition

Specialized medical equipment and supplies include: (a) devices, controls, or appliances, specified in the
plan of care, that enable participants to increase their ability to perform activities of daily living; (b)
devices, controls, or appliances that enable the participant to perceive, control, or communicate with the
environment in which they live; (c) items necessary for life support or to address physical conditions along
with ancillary supplies and equipment necessary to the proper functioning of such items; (d) such other
durable and non-durable medical equipment not available under the state plan that is necessary to address
participant functional limitations; and, (e) necessary medical supplies not available under the state plan.
Items reimbursed with waiver funds are in addition to any medical equipment and supplies furnished under
the state plan and exclude those items that are not of direct medical or remedial benefit to the participant.
All items shall meet applicable standards of manufacture, design and installation.
Instructions
•
•
•
•

•

•

Modify or supplement the core definition to reflect the scope of medical equipment and
supplies furnished under the waiver.
When coverage is limited to specific supplies or equipment, include a listing in the
definition.
If the coverage includes the costs of maintenance and upkeep of equipment, include a
statement to that effect in the definition.
When the coverage includes training the participant or caregivers in the operation and/or
maintenance of the equipment or the use of a supply, include a statement to that effect in the
definition.
If the coverage includes the performance of assessments to identify the type of equipment
needed by the participant, include a statement to that effect in the definition. The cost
estimates and claiming for this activity would need to be itemized separately in Appendix J
as a cost component of the service.
When necessary equipment is purchased in advance of the community placement of an
institutionalized person and claimed as a waiver cost post-entrance of the person to the
waiver, include a statement to that effect.

Guidance
•

•

This coverage may be used to supplement medical supplies and equipment under the state
plan, items that the state makes available, or items that Medicare covers under Durable
Medical Equipment.
States have employed this coverage to furnish a wide variety of adaptive positioning devices,
mobility aids, and adaptive equipment.

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•
•

The coverage also may include augmentative communication devices and services, or such
services may be covered as a distinct service.
Medical equipment and supplies that can be covered under the state plan should be furnished
as services required under EPSDT to waiver participants under age 21.

5. Assistive Technology

Core Service Definition
Assistive technology means an item, piece of equipment, service animal or product
system, whether acquired commercially, modified, or customized, that is used to increase,
maintain, or improve functional capabilities of participants. Assistive technology service
means a service that directly assists a participant in the selection, acquisition, or use of
an assistive technology device. Assistive technology includes-(A) the evaluation of the assistive technology needs of a participant, including a
functional evaluation of the impact of the provision of appropriate assistive technology
and appropriate services to the participant in the customary environment of the
participant;
(B) services consisting of purchasing, leasing, or otherwise providing for the acquisition
of assistive technology devices for participants;
(C) services consisting of selecting, designing, fitting, customizing, adapting, applying,
maintaining, repairing, or replacing assistive technology devices;
(D) coordination and use of necessary therapies, interventions, or services with assistive
technology devices, such as therapies, interventions, or services associated with other
services in the service plan;
(E) training or technical assistance for the participant, or, where appropriate, the family
members, guardians, advocates, or authorized representatives of the participant; and
(F) training or technical assistance for professionals or other individuals who provide
services to, employ, or are otherwise substantially involved in the major life functions of
participants.
Instructions
•

Modify or supplement the core definition to reflect the scope of assistive technology
services and devices furnished under the waiver. If such devices, items and/or services are
limited to specific types, list the types for which payment will be made.

•

If the coverage includes the performance of assessments to identify the type of equipment
needed by the participant, include a statement to that effect in the definition. The cost
estimates and claiming for this activity would need to be itemized separately in Appendix
J as a cost component of the service.

6. Personal Emergency Response System (PERS)
Core Service Definition

PERS is an electronic device that enables waiver participants to secure help in an
emergency. The participant may also wear a portable "help" button to allow for mobility.
The system is connected to the participant’s phone and programmed to signal a response
center once a "help" button is activated. The response center is staffed by trained
professionals, as specified herein.

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Instructions
•
•

Supplement or modify the core definition as appropriate to reflect the specific covered
devices and services under the waiver.
If installation, upkeep and maintenance of devices/systems are provided, include a statement
to that effect in the definition. The cost estimates and claiming for this activity would need
to be itemized separately in Appendix J as a cost component of the service.

7. Community Transition Services

Core Service Definition
Community Transitions Services are non-recurring set-up expenses for individuals who are
transitioning from an institutional or another provider-operated living arrangement to a living
arrangement in a private residence where the person is directly responsible for his or her own
living expenses. Allowable expenses are those necessary to enable a person to establish a basic
household that do not constitute room and board and may include: (a) security deposits that are
required to obtain a lease on an apartment or home; (b) essential household furnishings and
moving expense required to occupy and use a community domicile, including furniture, window
coverings, food preparation items, and bed/bath linens; (c) set-up fees or deposits for utility or
service access, including telephone, electricity, heating and water; (d) services necessary for the
individual’s health and safety such as pest eradication and one-time cleaning prior to occupancy;
(e) moving expenses; (f) necessary home accessibility adaptations; and, (g) activities to assess
need, arrange for and procure need resources. Community Transition Services are furnished only
to the extent that they are reasonable and necessary as determining through the service plan
development process, clearly identified in the service plan and the person is unable to meet such
expense or when the services cannot be obtained from other sources. Community Transition
Services do not include monthly rental or mortgage expense; food, regular utility charges; and/or
household appliances or items that are intended for purely diversional/recreational purposes.
Instructions
•
•
•

Supplement or modify the core definition as appropriate to reflect the specific community
transition services that are included under the waiver.
The service definition may be modified as necessary to reflect specific items and services
that are included or excluded.
Community Transition Services may not include payment for room and board. The payment
of a security deposit is not considered rent.

Guidance
•
•

•

See State Medicaid Director Letter #02-008 (Attachment D to Instructions) for further
information.
When Community Transition Services are furnished to individuals returning to the
community from a Medicaid institutional setting through entrance to the waiver, the costs of
such services are considered to be incurred and billable when the person leaves the
institutional setting and enters the waiver. The individual must be reasonably expected to
be eligible for and to enroll in the waiver. If for any unseen reason, the individual does not
enroll in the waiver (e.g., due to death or a significant change in condition), transitional
services may be billed to Medicaid as an administrative cost.
At the state’s option, Community Transition Services may be furnished as a waiver service

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•

to individuals who transition from provider-operated settings other than Medicaid
reimbursable institutions to their own private residence in the community.
Community Transition Services may not be used to pay for furnishing living arrangements
that are owned or leased by a waiver provider where the provision of these items and services
are inherent to the service they are already providing.

8. Skilled Nursing

Core Service Definition

Services listed in the service plan that are within the scope of the state's Nurse Practice Act and are
provided by a registered professional nurse, or licensed practical or vocational nurse under the
supervision of a registered nurse, licensed to practice in the state.
Instructions
•
•

•

If skilled nursing services are limited to specific types of nursing services, specify the types
of services in the definition.
If skilled nursing services are covered under the state plan but the waiver coverage is
different, include the following statement in the service definition: “Skilled nursing services
under the waiver differ in nature, scope, supervision arrangements, or provider type
(including provider training and qualifications) from skilled nursing services in the state
plan.” Also, specify the differences between the waiver coverage and the state plan
coverage. If skilled nursing services are not covered under the state plan, do not include this
statement. Describe the difference between the waiver coverage and the state plan coverage.
If skilled nursing services are covered under the waiver only on an “extended state plan
service” basis (e.g., the services furnished differ from the state plan coverage only in amount,
duration and frequency but not scope), employ the following alternate service core service
definition:
Core Service Definition (Extended State Plan Service)
Services that are provided when nursing services furnished under the approved state
plan limits are exhausted. The scope and nature of these services do not otherwise
differ from nursing services furnished under the state plan. The provider
qualifications specified in the state plan apply. The additional amount of services that
may be provided through the waiver is as follows:

Guidance
•

•

Skilled nursing is the provision of nursing services on an intermittent or part-time basis.
“Private duty nursing” (see below) entails the provision of nursing services on a continuous
or full-time basis.
Skilled nursing services that can be furnished under the state plan should be furnished as
services required under EPSDT to waiver participants under age 21.

9. Private Duty Nursing
Core Service Definition

Individual and continuous care (in contrast to part time or intermittent care) provided by
licensed nurses within the scope of state law. These services are provided to a participant
at home.
Instructions
•

If private duty nursing services are limited to specific types of nursing services, specify the

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types of services in the definition.
•

•

When private duty nursing services are covered under the state plan but the waiver coverage
is different, include the following statement in the service definition: “Private duty nursing
services under the waiver differ in nature, scope, supervision arrangements, or provider type
(including provider training and qualifications) from private duty nursing services in the
state plan.” Also, specify the differences between the waiver coverage and the state plan
coverage. If private duty nursing services are not covered under the state plan, do not include
this statement. Describe the difference in waiver coverage and state plan coverage.
If private duty nursing services are covered under the waiver only on an “extended state plan
service” basis (e.g., the services furnished differ from the state plan coverage only in amount,
duration and frequency but not otherwise), employ the following alternate service core
service definition:
Core Service Definition (Extended State Plan Service):
Services that are provided when the limits of private duty nursing furnished under the
approved state plan are exhausted. The scope and nature of these services do not
otherwise differ from private duty nursing services furnished under the state plan. The
provider qualifications specified in the state plan apply. The additional amount of
services that may be provided through the waiver is as follows:

Guidance
•

•

As defined in 42 CFR §440.80, private duty nursing is the provision of nursing services on
a continuous or full-time basis. “Skilled nursing” is the provision of nursing services on a
periodic or intermittent basis.
Private duty nursing services that can be provided under the state plan should be furnished
to waiver participants under age 21 as services required under EPSDT

10. Adult Foster Care
Core Service Definition

Personal care and supportive services (e.g., homemaker, chore, attendant care,
companion, medication oversight (to the extent permitted under state law)) provided in a
licensed (where applicable) private home by a principal care provider who lives in the
home. Adult foster care is furnished to adults who receive these services in conjunction
with residing in the home. The total number of individuals (including participants served
in the waiver) living in the home, who are unrelated to the principal care provider, cannot
exceed [insert number]. Separate payment is not made for homemaker or chore services
furnished to a participant receiving adult foster care services, since these services are
integral to and inherent in the provision of adult foster care services.
Payments for adult foster care services are not made for room and board, items of comfort
or convenience, or the costs of facility maintenance, upkeep and improvement. Payment
for adult foster care services does not include payments made, directly or indirectly, to
members of the participant's immediate family. The methodology by which the costs of
room and board are excluded from payments for adult foster care is described in
Appendix I.

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Instructions
•
•

Modify or supplement the core definition to reflect the scope of adult foster care furnished
under the waiver.
In the core definition, insert the total maximum number of individuals not related to the
caregiver who may reside in the home.

Guidance
•
•

•

Adult foster care is a residential service that is furnished in the primary caregiver’s own
private home. In some states, these services are entitled “host home services.”
A state may contract with each primary caregiver for the provision of adult foster care
services and/or contract with agencies that, in turn, contract with and supervise individual
caregivers.
Adult foster care is considered a residential habilitation service only when habilitation is
included in the defined scope of the adult foster care service. Adult foster care is not consider
a residential habilitation service when habilitation services are furnished in the adult foster
care setting by a different provider and billed separately.

11. Assisted Living Services
Core Service Definition

Personal care and supportive services (homemaker, chore, attendant services, meal
preparation) that are furnished to waiver participants who reside in a setting that meets
the HCB setting requirements and includes 24-hour on-site response capability to meet
scheduled or unpredictable resident needs and to provide supervision, safety and
security. Services also include social and recreational programming, and medication
assistance (to the extent permitted under state law). Services that are provided by third
parties must be coordinated with the assisted living provider.
Nursing and skilled therapy services are incidental rather than integral to the provision
of assisted living services. Payment is not be made for 24-hour skilled care. Federal
financial participation is not available for room and board, items of comfort or
convenience, or the costs of facility maintenance, upkeep and improvement. The
methodology by which the costs of room and board are excluded from payments for
assisted living services is described in Appendix I-5.
Instructions
•
•

•

Modify or supplement the core definition to reflect the scope of assisted living services
furnished under the waiver.
Indicate whether payment for assisted living services includes any of the following:
 Home health care
 Physical therapy
 Occupational therapy
 Speech therapy
 Medication administration
 Intermittent skilled nursing services
 Transportation specified in the service plan
 Periodic nursing evaluations
 Other specified services
When assisted living services are furnished in living arrangements subject to §1616(e) of the
Social Security Act (the Keys Amendment), the standards for such services must address the

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topics specified in Appendix C-2 (item C-2-c-ii), including assuring that the living
arrangement is homelike rather than institutional in character.
Guidance
•

•

•

•

•

•

Note: While this version of the waiver application continues to list “assisted living” as a
service definition, CMS encourages states to use a more accurate name for the service. The
term assisted living describes a setting, not a service. Medicaid never pays for “assisted
living” in the ordinary sense of the monthly fee to the facility for room, board and services.
Medicaid may cover, as a waiver service, some of the supportive services provided to
assisted living residents. These services may be appropriately titled to reflect their nature
and scope.
Payment for assisted living services may encompass a comprehensive array of services and
supports that are normally furnished on an integrated basis by an assisted living provider to
residents.
When the scope of assisted living services includes services (e.g., personal care or chore
services) that are also covered as distinct services under the waiver, there must be
mechanisms that ensure, when such services are included in the comprehensive rate that is
paid to the assisted living provider, the services may not also be billed separately.
When a comprehensive payment is made to a provider for assisted living services, the
provider’s own employees must directly furnish some or all services to residents. The
provider may arrange for the provision of some services on a contractual basis.
The scope of assisted living services may include services that may be offered through the
state plan to the extent such services are normally furnished as part of a comprehensive array
of on-site assisted living services. There must be mechanisms to ensure that, when such
services are included in the comprehensive rate that is paid to the assisted living provider,
the services may not also be billed separately as state plan services.
When a waiver includes assisted living services, the locations of service delivery must meet
criteria described in Appendix C-2 with regard to the home and community-based nature of
the facility.

12. Chore Services

Core Service Definition
Services needed to maintain the home in a clean, sanitary and safe environment. This
service includes heavy household chores such as washing floors, windows and walls,
tacking down loose rugs and tiles, moving heavy items of furniture in order to provide
safe access and egress. These services are provided only when neither the participant nor
anyone else in the household is capable of performing or financially providing for them,
and where no other relative, caregiver, landlord, community/volunteer agency, or thirdparty payor is capable of or responsible for their provision. In the case of rental property,
the responsibility of the landlord, pursuant to the lease agreement, is examined prior to
any authorization of service.

Instructions
Supplement or modify the core definition as appropriate to reflect covered service elements/ tasks under
the waiver.

13. Adult Companion Services
Core Service Definition
Non-medical care, supervision and socialization, provided to a functionally impaired
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adult. Companions may assist or supervise the participant with such tasks as meal
preparation, laundry and shopping. The provision of companion services does not entail
hands-on nursing care. Providers may also perform light housekeeping tasks that are
incidental to the care and supervision of the participant. This service is provided in
accordance with a therapeutic goal in the service plan.
Instructions
•
•

Supplement or modify the core definition as appropriate to reflect the specific covered
service elements under the waiver.
When the waiver also covers personal care, chore and/or homemaker services, the definition
must describe how the provision of adult companion services does not duplicate the
provision of such services.

14. Training and Counseling Services for Unpaid Caregivers

Core Service Definition
Training and counseling services for individuals who provide unpaid support, training,
companionship or supervision to participants. For purposes of this service, individual is
defined as any person, family member, neighbor, friend, companion, or co-worker who
provides uncompensated care, training, guidance, companionship or support to a person
served on the waiver. This service may not be provided in order to train paid caregivers.
Training includes instruction about treatment regimens and other services included in
the service plan, use of equipment specified in the service plan, and includes updates as
necessary to safely maintain the participant at home. Counseling must be aimed at
assisting the unpaid caregiver in meeting the needs of the participant. All training for
individuals who provide unpaid support to the participant must be included in the
participant’s service plan.
Instructions

Modify or supplement the core definition to reflect the specific types of training furnished that is
furnished to unpaid persons who support the participant.
Guidance
•

•
•

Training furnished to persons who provide uncompensated care and support to the
participant must be directly related to their role in supporting the participant in areas
specified in the service plan.
Counseling similarly must be aimed at assisting unpaid individuals who support the
participant to understand and address participant needs.
FFP is available for the costs of registration and training fees associated with formal
instruction in areas relevant to participant needs identified in the service plan. FFP is not
available for the costs of travel, meals and overnight lodging to attend a training event or
conference.

15. Consultative Clinical and Therapeutic Services
Core Service Definition

Clinical and therapeutic services that assist unpaid caregivers and/or paid support staff
in carrying out individual treatment/support plans, and that are not covered by the
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Medicaid state plan and are necessary to improve the individual’s independence and
inclusion in their community. Consultation activities are provided by professionals in
psychology, nutrition, counseling and behavior management. The service may include
assessment, the development of a home treatment/ support plan, training and technical
assistance to carry out the plan and monitoring of the individual and the provider in the
implementation of the plan. This service may be delivered in the individual’s home or in
the community as described in the service plan.

Instructions
Modify or supplement the core definition to reflect the specific types of consultative services that are
furnished.

Guidance
The purpose of consultative services is to improve the ability of unpaid caregivers and paid direct support
staff to carry out therapeutic interventions.

16. Individual Directed Goods and Services
Core Service Definition

Individual Directed Goods and Services are services, equipment or supplies not
otherwise provided through this waiver or through the Medicaid state plan that address
an identified need in the service plan (including improving and maintaining the
participant’s opportunities for full membership in the community) and meet the following
requirements: the item or service would decrease the need for other Medicaid services;
AND/OR promote inclusion in the community; AND/OR increase the participant’s safety
in the home environment; AND, the participant does not have the funds to purchase the
item or service or the item or service is not available through another source. Individual
Directed Goods and Services are purchased from the participant-directed budget.
Experimental or prohibited treatments are excluded. Individual Directed Goods and
Services must be documented in the service plan.
Instructions

Modify or supplement the core definition to reflect the scope of individual directed goods and
services in the waiver.
Guidance
•
•
•

•
•

The coverage of this service permits a state to authorize the purchase of goods and services
that are not otherwise offered in the waiver or the state plan.
The coverage of this service is limited to waivers that incorporate the Budget Authority
participant direction opportunity.
Goods and services purchased under this coverage may not circumvent other restrictions on
the claiming of FFP for waiver services, including the prohibition against claiming for the
costs of room and board.
The specific goods and services that are purchased under this coverage must be documented
in the service plan.
The goods and services that are purchased under this coverage must be clearly linked to an
assessed participant need established in the service plan.

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17. Bereavement Counseling
Core Service Definition

Counseling provided to the participant and/or family members in order to guide and help
them cope with the participant’s illness and the related stress that accompanies the
continuous, daily care required by a terminally ill child. Enabling the participant and
family members to manage this stress improves the likelihood that the child with a lifethreatening condition will continue to be cared for at home, thereby preventing premature
and otherwise unnecessary institutionalization. Bereavement activities and opportunities
for dialog offer the family a mechanism for expressing emotion and asking questions
about death and grieving in a safe environment thereby potentially decreasing
complications for the family after the child dies. Bereavement counseling is initiated and
billed while the child is on the waiver but may continue after the death of the child for a
period of up to six months.
Instructions

Modify or supplement the core definition to reflect the scope of bereavement counseling in the
waiver.
Guidance
•
•

Bereavement counseling services are associated with waivers that target children with
terminal illnesses.
Payment for bereavement counseling services may be provided for on-going counseling to
family members after the child’s death so long as such services were initiated prior to the
child’s death. The expected costs of such counseling must be billed in advance.

18. Career Planning

Core Service Definition
Career planning is a person-centered, comprehensive employment planning and support service
that provides assistance for waiver program participants to obtain, maintain or advance in
competitive employment or self-employment. It is a focused, time limited service engaging a
participant in identifying a career direction and developing a plan for achieving competitive,
integrated employment at or above the state’s minimum wage. The outcome of this service is
documentation of the participant’s stated career objective and a career plan used to guide
individual employment support.
Instructions:
•
•
•

Supplement or modify the core definition as appropriate to incorporate the specific service
elements furnished in the waiver.
Supplement the core service definition by specifying where in the community career
planning may be furnished.
If transportation between the participant's place of residence and the site where career
planning is delivered is provided as a component part of career planning services and the
cost of this transportation is included in the rate paid to providers of career planning services,
the service definition must include a statement to that effect in the definition.

Guidance:
•

For young people with disabilities transitioning out of high school or college into adult
services, it is important to have the opportunity to plan for sufficient time and experiential
learning opportunities for the appropriate exploration, assessment and discovery processes

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•

•

•

•

•

•
•

•

to learn about career options as one first enters the general workforce.
Individuals who receive career planning services may also receive educational, supported
employment, pre-vocational and/or day habilitation services. A participant’s personcentered services and supports plan may include two or more types of non-residential
habilitation services. However, different types of non-residential habilitation services may
not be billed during the same period of the day.
If a waiver participant is receiving prevocational services or day habilitation services, career
planning may be used to develop experiential learning opportunities and career options
consistent with the person’s skills and interests.
If a waiver participant is employed and receiving either individual or small group supported
employment services, career planning may be used to find other competitive employment
more consistent with the person’s skills and interests or to explore advancement
opportunities in his or her chosen career.
All prevocational and supported employment service options, including career planning,
should be reviewed and considered as a component of an individual’s person-centered
services and supports plan no less than annually, more frequently as necessary or as
requested by the individual. These services and supports should be designed to support
successful employment outcomes consistent with the individual’s goals.
Career planning furnished under the waiver may not include services available under a
program funded under section 110 of the Rehabilitation Act of 1973 or section 602(16) and
(17) of the Individuals with Disabilities Education Act (20 U.S.C. 1401(16 and 17).
Career planning may include benefits support, training and planning, as well as assessment
for use of assistive technology to increase independence in the workplace.
If a state wishes to cover “career planning” it may choose to include it as a component part
of day habilitation, pre-vocational services or supported employment small group or
individual employment support services or it may be broken out as a separate standalone
service definition.
Career planning services may be furnished to any individual who requires and chooses them.
They are not limited to persons with intellectual or developmental disabilities.

C. Extended State Plan Services
Discussion

When a service is included as an extended state plan service, the coverage parameters (e.g., nature of the
service and provider qualifications) contained in the state plan apply. The coverage of a state plan service
on an extended basis means providing the service in an amount over and above that permitted under the
state plan (e.g., if the plan limits physician visits to three per month, extended coverage may permit
additional visits). When a service is defined in a fashion that is different from the coverage under the state
plan, it is considered an “other service” that is separately defined in the application. Services that could be
covered under the state plan, but which are not are considered “other services” for the purpose of the waiver
application.

Core Service Definition

The following core service definition may be employed for each extended state plan service included in the
waiver:
Core Service Definition

Services that are provided when the limits of [state plan service] under the approved state

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plan are exhausted. The scope and nature of these services do not otherwise differ from
[state plan service] services furnished under the state plan. The provider qualifications
specified in the state plan apply. The additional amount of services that may be provided
through the waiver is as follows: (specify)
Instructions
•

Insert the name of the specific state plan service that is offered on an extended basis under
the waiver. Extended state plan services may include but are not limited to:
 Physician services
 Home health care services
 Physical therapy
 Occupational therapy
 Speech, hearing and language services
 Prescribed drugs, except drugs furnished to participants who are eligible for Medicare
Part D benefits
 Dental services
 Other services specified by the state
•

For each extended state plan service, specify the extent of the extended coverage (e.g.,
the provision of additional therapeutic treatments over and above the amount allowed in
the state plan).

D. Services in Support of Participant Direction

Discussion
Services in Support of Participant Direction are offered whenever a waiver affords participants
the opportunity to direct some or all of their waiver services. Two core service definitions are
provided: (a) information and assistance in support of participant direction and (b) financial
management services. States may propose additional types of supportive services.
1. Information and Assistance in Support of Participant Direction (Supports Brokerage)
Core Service Definition

Service/function that assists the participant (or the participant’s family or representative,
as appropriate) in arranging for, directing and managing services. Serving as the agent
of the participant or family, the service is available to assist in identifying immediate and
long-term needs, developing options to meet those needs and accessing identified
supports and services. Practical skills training is offered to enable families and
participants to independently direct and manage waiver services. Examples of skills
training include providing information on recruiting and hiring personal care workers,
managing workers and providing information on effective communication and problemsolving. The service/function includes providing information to ensure that participants
understand the responsibilities involved with directing their services. The extent of the
assistance furnished to the participant or family is specified in the service plan. This
service does not duplicate other waiver services, including case management.
Instructions

Modify or supplement the core definition to accurately reflect the scope and nature of supports
for participant direction furnished under the waiver

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Guidance
•
•

•

This service is limited to participants who direct some or all of their waiver services.
As discussed in the instructions for Appendix E (Participant Direction of Services), the scope
and nature of this service hinges on the type and nature of the opportunities for participant
direct afforded by the waiver.
Through this service, information may be provided to participant about:
 person centered planning and how it is applied;
 the range and scope of individual choices and options;
 the process for changing the plan of care and individual budget;
 the grievance process;
 risks and responsibilities of self-direction;
 free of choice of providers;
 individual rights;
 the reassessment and review schedules; and,
 such other subjects pertinent to the participant and/or family in managing and directing
services.
Assistance may be provided to the participant with:
 defining goals, needs and preferences, identifying and accessing services, supports and
resources;
 practical skills training (e.g., hiring, managing and terminating workers, problem
solving, conflict resolution)
 development of risk management agreements;
 development of an emergency backup plan;
 recognizing and reporting critical events;
 independent advocacy, to assist in filing grievances and complaints when necessary;
and,
 other areas related to managing services and supports.
• This service may include the performance of activities that nominally overlap the provision
of case management services. In general, such overlap does not constitute duplicate
provision of services. For example, a “support broker” may assist a participant during the
development of a person-centered plan to ensure that the participant’s needs and
preferences are clearly understood even though a case manager is responsible for the
development of the service plan. Duplicate provision of services generally only arises
when exactly the same activity is performed and billed on behalf of a waiver participant.
Where the possibility of duplicate provision of services exists, the participant’s service plan
should clearly delineate responsibilities for the performance of activities.

2. Financial Management Services
Core Service Definition

Service/function that assists the family or participant to: (a) manage and direct the
disbursement of funds contained in the participant-directed budget; (b) facilitate the
employment of staff by the family or participant, by performing as the participant’s agent
such employer responsibilities as processing payroll, withholding federal, state, and local
tax and making tax payments to appropriate tax authorities; and, (c) performing fiscal
accounting and making expenditure reports to the participant or family and state
authorities.
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Instructions

Supplement or modify the core definition to accurately reflect the scope and nature of financial
management services furnished under the waiver.
Guidance
•
•

•

•

•
•

This service is limited to participants who direct some or all of their waiver services.
As discussed in the instructions for Appendix E (Participant Direction of Services), the scope
and nature of this service hinges on the type and nature of the opportunities for participant
direct afforded by the waiver. In general, the functions that may be performed in conjunction
with the provision of financial management services include (but are not necessarily limited
to):
Employer Authority
 Assist the participant to verify worker citizenship status
 Collect and process timesheets of support workers
 Process payroll, withholding, filing and payment of applicable federal, state and local
employment-related taxes and insurance
Budget Authority
 Maintain a separate account for each participant’s participant-directed budget
 Track and report participant funds, disbursements and the balance of participant funds
 Process and pay invoices for goods and services approved in the service plan
 Provide participant with periodic reports of expenditures and the status of the
participant-directed budget
Additional functions/activities
 Execute and hold Medicaid provider agreements as authorized under a written
agreement with the Medicaid agency
 Receive and disburse funds for the payment of participant-directed services under an
agreement with the Medicaid agency or operating agency
 Provide other entities specified by the state with periodic reports of expenditures and
the status of the participant-directed budget
When financial management services are provided as a waiver service, entities that perform
these services may be deemed by the state to function as an Organized Health Care Delivery
System.
When entities are not deemed to be an Organized Health Care Delivery System, such entities
must have a written agreement with the Medicaid agency in order to execute and hold
Medicaid provider agreements and receive and disburse funds.
When financial management services are furnished as a waiver service, the number of
providers may not be limited.
The waiver may provide that entities which furnish financial management services undergo
a readiness review as part of the determination that such entities are qualified to furnish these
services.

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Appendix D: Participant-Centered Planning
and Service Delivery

Brief Overview

This Appendix addresses the following:
• Service plan development (Appendix D-1)
• Service plan implementation and monitoring (Appendix D-2)

Appendix D-1: Service Plan Development

Background

A well-designed process for developing and implementing waiver participant service plans is
perhaps the most critical component of the waiver program. Service planning is the process
through which each waiver participant’s needs, goals and preferences are identified, and strategies
are developed to address those needs, goals and preferences. It is the process through which the
participant exercises choice and control over services and supports and through which risks are
assessed and planned for. A well-designed process incorporates and maximizes the resources and
supports present in the person’s life and community. It is important that the planning process also
enables and supports each participant (and/or family or legal representative, as appropriate) to fully
engage in and direct the planning process to the extent he/she chooses. It is through the planning
process that roles and responsibilities are clarified for participants who direct their own services.
The service plan (plan of care) identifies the waiver services as well as other services and supports
that a person needs in order to live successfully in the community and, therefore, avoid
institutionalization. In accordance with 42 CFR §441.301 (b)(1)(i), all waiver services must be
furnished pursuant to a written service plan that is developed for each waiver participant. The
service plan must reflect the full range of a participant’s service needs and include both the
Medicaid and non-Medicaid services along with informal supports that are necessary to address
those needs. The service plan commits the state to provide the Medicaid services and supports
that are specified in the plan.
FFP may be claimed only for those waiver services that are included in the service plan and may
not be claimed for services furnished prior to the development of the service or for services not
included in the service plan.
When non-waiver services and supports are included in the service plan, the waiver administering
agency is not responsible for ensuring their availability or actual delivery. As necessary and
appropriate, activities should be undertaken to link, refer or advocate for such services. When
non-waiver services and supports are needed to meet the needs of the participant, their provision
must be monitored during the implementation of the service plan.
CMS encourages and supports the use of person/family-centered planning methods in service plan
development. Such methods actively engage and empower the participant and individuals selected
by the participant in leading and directing the design of the service plan and, thereby, ensure that
the plan reflects the needs and preferences of the participant (and/or family, if applicable).
Person/family-centered planning is an integral element of participant direction of services.

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The service plan must contain, at a minimum: the services that are furnished, the amount and
frequency of each service, and the type of provider to furnish each service. The service plan need
not identify the specific provider of each waiver service. It is not necessary to submit a copy of
the form or forms used to document the service plan along with the application. However, the
form or forms employed must be readily available to CMS upon request through the Medicaid
agency or operating agency (if applicable). The form or forms employed in conjunction with the
waiver must meet the minimum standards just described. Meeting these standards is a condition
of claiming federal financial participation in the cost of waiver services furnished to a waiver
participant.
The service plan must be revised as necessary to add or delete services or modify the amount and
frequency of services. Service plans must be reviewed at least annually or whenever necessary
due to a change in the participant’s needs.
How the waiver assures that service plans address all participants’ assessed needs (including health
and safety risk factors) and personal goals, either by the provision of waiver services or through
other means is one of the six waiver assurances and other requirements that must be addressed in
the Quality Improvement Strategy described throughout the application.

Detailed Instructions for Completing Appendix D-1
Service Plan Title

Instructions
Specify the title that the state has adopted for the service plan and, if applicable, its abbreviation (e.g.,
Individual Service Plan (ISP)).

Item D-1-a: Responsibility for Service Plan Development
Instructions

From the choices listed, select who is responsible for service plan development. As applicable,
specify the qualifications of these individuals.
Technical Guidance

Responsibility for the development of the service plan means ensuring that all applicable policies
and procedures associated with service plan development are carried out. These policies and
procedures include but are not limited to the following: (1) the participant has the opportunity to
engage and/or direct the process to the extent they wish; (2) those whom the participant wishes to
attend and participate in developing the service plan are provided adequate notice; (3) the planning
process is timely; (4) needs are assessed and services meet the needs and, (5) the responsibilities
are identified. It does not mean that the individual who is responsible for service plan development
has decision-making authority over the services included in the plan. The qualifications of
individuals who are responsible for service plan development should be reflective of the nature of
the waiver’s target population. It is not a federal requirement that medical professionals (e.g.,
physicians, nurses) must be responsible for service plan development.
CMS Review Criteria
The state has specified qualifications of the individuals responsible for service plan development that
reflect the nature of the waiver’s target groups.

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Item D-1-b: Service Plan Development Safeguards
Instructions

Indicate whether the entities and/or individuals responsible for the development of the personcentered service plan are permitted to provide other direct (non-case management) services to the
waiver participant, or whether they have an interest in or are employed by a provider of HCBS. If
such entities are permitted to furnish other services, explain how and why they are the only willing
and qualified entity to be responsible for the person-centered service plan, and describe the
safeguards that the state has established to ensure that person-centered service plan development
is conducted in the best interests of the waiver participant.
Technical Guidance

Regulations at 42 CFR 441.301(c)(1)(vi) require that providers of HCBS for the individual, or
those who have an interest in or are employed by a provider of HCBS for the individual must not
provide case management or develop the person-centered service plan, except when the state
demonstrates that the only willing and qualified entity to provide case management and/or develop
person-centered service plans in a geographic area also provides HCBS. In these cases, the state
must devise conflict of interest protections including separation of entity and provider functions
within provider entities, which must be approved by CMS. Individuals must be provided with a
clear and accessible alternative dispute resolution process.
The safeguards to mitigate and addresses the potential problems that may arise when the
individual’s HCBS provider, or an entity with an interest in or employed by a provider of HCBS,
performs service plan development (ex. self-referral) need to include, at a minimum:
a. Full disclosure to participants and assurance that participants are supported in
exercising their right to free choice of providers and are provided information
about the full range of waiver services, not just the services furnished by the entity
that is responsible for the person-centered service plan development;
b. An opportunity for the participant to dispute the state’s assertion that there is not
another entity or individual that is not that individual’s provider to develop the
person-centered service plan through a clear and accessible alternative dispute
resolution process;
c. Direct oversight of the process or periodic evaluation by a state agency;
d. Restricting the entity that develops the person-centered service plan from
providing services without the direct approval of the state; and
e. Requiring the agency that develops the person-centered service plan to
administratively separate the plan development function from the direct service
provider functions.

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CMS Review Criteria
When a state allows for an entity that is responsible for person-centered service plan
development to also provide other direct waiver services, the state has:
1. Demonstrated that the entity is the only willing and qualified provider to
develop the person-centered service plan; and
2. Described safeguards that mitigate and addresses the potential problems that
may arise, with the service providers’ influence on the person-centered
planning process (exercising free choice of providers, controlling the content
of the plan, including assessment of risk, services, frequency and duration, and
informing the participant of their rights) including:
a) Full disclosure to participants and assurance that participants are supported in
exercising their right to free choice of providers and are provided information
about the full range of waiver services, not just the services furnished by the
entity that is responsible for the person-centered service plan development;
b) An opportunity for the participant to dispute the state’s assertion that there is
not another entity or individual that is not that individual’s provider to develop
the person-centered service plan through a clear and accessible alternative
dispute resolution process;
c) Direct oversight of the process or periodic evaluation by a state agency;
d) Restricting the entity that develops the person-centered service plan from
providing services without the direct approval of the state; and
e) Requiring the agency that develops the person-centered service plan to
administratively separate the plan development function from the direct
service provider functions.

Item D-1-c: Supporting the Participant in Service Plan Development

Instructions

In the text field, specify: (a) the supports and information that are made available to the participant
(and/or family or legal representative, as appropriate) to direct and be actively engaged in the
service plan development process and (b) the participant’s authority to determine who is included
in the process.
Technical Guidance

An effective service plan development process provides the waiver participant the opportunity to
actively lead and engage in the development of the plan, including identifying individuals who
will be involved in the process. The participant should be furnished supports that are necessary to
enable the participant to actively engage in the planning process, including providing information
about the range of services and supports offered through the waiver in advance of service plan
development and engaging individuals (e.g., a support broker) to assist the participant or facilitate

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a person-centered planning process. Participants also may be offered other education/training
opportunities initially and on an ongoing basis.
CMS Review Criteria
• The participant’s authority to include individuals of his/her choice to participate in the
service plan development process is specified.
• The description identifies the meaningful information and supports that are available to
the participant (or others designated by the participant) to actively engage in and direct
the process.
Item D-1-d. Service Plan Development Process
Instructions

In four pages or less (no more than 24,000 characters), provide a comprehensive description of the
process that is used to develop the participant-centered service plan, including: (a) who develops
the plan, who participates in the process, and the timing of the plan; (b) the types of assessments
that are conducted to support service plan development, including securing information about
participant needs, preferences and goals, and health status, including who conducts the
assessments; (c) how the participant is informed of the services that are available under the waiver;
(d) how the plan development process ensures that the service plan addresses participant goals,
needs (including health care needs), and preferences; (e) how waiver and other services are
coordinated and by whom; (f) how the plan development process provides for the assignment of
responsibilities to implement and monitor the plan; and, (g) how and when the plan is updated,
including when the participant’s needs change; and, (h) how the participant engages in and/or
directs the planning process.
Technical Guidance

This item requires furnishing a comprehensive description of the dimensions of the service plan
development process, including the sequence of activities, the integration of assessment
information into service planning, and the distribution of roles and responsibilities. The next item
separately addresses how the service plan development process identifies potential risks to the
participant and how strategies to mitigate risk are incorporated into the service plan. State laws,
regulations, and policies cited in response to this item that affect the service plan development
process must be available to CMS upon request through the Medicaid agency or the operating
agency (if applicable)
When the service plan development process results in an individual being denied the services of
their choice or the providers of their choice, the state must afford the individual the opportunity to
request a Fair Hearing. The Fair Hearing process is addressed in Appendix F-1.
When the waiver provides for participant direction opportunities, the response to this item should
identify any activities that are undertaken during the service plan development process that are
specific to participant direction (e.g., furnishing information and assistance in setting up the
participant-directed budget).
When provision is made to develop a temporary interim service plan in order to initiate services
in advance of the finalization of a full-service plan, describe the procedures used to develop the
interim plan and the duration of the interim plan.

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CMS Review Criteria
The description of the service plan development process addresses:
•
•
•
•
•
•
•
•
•
•

Who develops the plan and who participates in the process;
The timing of the plan and how and when it is updated, including in response to changing
circumstances and needs (including how the planning meetings are scheduled at times and
locations convenient to the individual and the person(s) he/she wants to participate);
The types of assessments that are conducted as part of the service plan development
process, including securing information about participant strengths, capacities, needs,
preferences, and desired outcomes, health status, and risk factors;
How participant is informed of services available under the waiver;
How the process ensures that the service plan addresses participant desired outcomes,
needs and preferences;
How responsibilities are assigned for implementing the plan;
How the process addresses participants’ health care needs;
How waiver and other services (i.e., state Plan services and services furnished through
other state and federal programs) are coordinated;
The assignment of responsibility to monitor and oversee the implementation of the service
plan; and,
If the state uses temporary, interim service plans to get services initiated until a more
detailed service plan can be finalized, the state has described the procedures for
developing interim plans and the duration of not more than 60 days for such interim plans.

Item D-1-e. Risk Assessment and Mitigation
Instructions

In the text field, specify how potential risks to the participant are assessed during the service plan
development process and how strategies to mitigate risk are incorporated into the service plan,
subject to participant needs and preferences. In addition, describe how the service plan
development process addresses backup plans and the arrangements that are used for backup.
Technical Guidance

The presence of risks does not mean that an individual should not be offered waiver services, or
that they should not have decision making authority over their services. The identification of
potential risks to waiver participants and the development of strategies to mitigate such risks are
integral to enabling participants to live as they choose in the community while assuring their health
and welfare. Critical risks should be addressed during the service plan development process by
incorporating strategies into the plan to mitigate whatever risks may be present. Methods to
identify potential risks may include the use of risk assessment tools/instruments to systematically
identify risks.
Strategies to mitigate risk should be designed to respect the needs and preferences of the waiver
participant. Such strategies might include supports other than waiver services and the use of
individual risk agreements that permit the participant to acknowledge and accept the responsibility
for addressing certain types of risks. When individuals are supported in their own private residence
or other settings where staff might not be continuously available, the service plan should include
a backup plan to address contingencies such as emergencies, including the failure of a support
worker to appear when scheduled to provide necessary services when the absence of the service
presents a risk to the participant’s health and welfare. An effective back-up plan is one that is
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crafted to meet the unique needs and circumstances of each waiver participant. The response to
this item should also describe the types of back-up arrangements that are employed. Such
arrangements may include arranging for designated provider agencies to furnish staff support on
an on-call basis as necessary
CMS Review Criteria
The waiver describes:
• How risks are assessed.
• How strategies to mitigate risk are incorporated into the service plan in a manner sensitive
to the person’s preferences, including responsibilities and measures for reducing risks.
• The types of back-up arrangements that are used.
• How back-up plans are developed and incorporated into the service plan.
Item D-1-f: Informed Choice of Providers
Instructions

Describe how participants are assisted in obtaining information about and selecting from among
qualified providers of the waiver services in the service plan.
Technical Guidance

Waiver participants have the right to freely select from among any willing and qualified provider
of waiver services (except when an HCBS waiver operates concurrently with a managed care
authority that waives free choice of provider). In order to effectively exercise this right, participants
should have ready access to accessible information about the qualified waiver providers that are
available to furnish the services included in the plan. Such information may be furnished as part
of the service plan development process or by other means (e.g., making available resource
directories in printed form or via the Internet).
CMS Review Criteria
• Participants are initially provided with, and on an ongoing basis have ready access to
accessible information (in a manner consistent with their needs) about choice of qualified
providers and available service providers.
• Participants are supported in selecting providers
Item D-1-g: Process for Making Service Plan Subject to the Approval of the Medicaid Agency
Instructions

In the text field, describe the process by which the service plan is made subject to the approval of
the Medicaid agency
Technical Guidance

42 CFR §441.301(b)(1)(i) requires that waiver service plans must be subject to the approval of the
Medicaid agency. This requirement does not mean that the Medicaid agency must review and
approve each and every service plan. While the waiver operating agency or other entities (e.g.,
counties) may approve service plans as part of day-to-day waiver operations when authorized by
the Medicaid agency, the Medicaid agency must retain responsibility for service plan approval and
at a minimum must review at least a sample of service plans retrospectively or employ other

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methods that ensure that plans have been developed in accordance with applicable policies and
procedures and plans ensure the health and welfare of waiver participants. This oversight activity
is a critical element of the Medicaid agency’s responsibility to actively oversee the operation of
the waiver and ensure health and welfare of recipients.
When this oversight is conducted through an in-depth review of a sample of service plans, specify
the basis for the size of the sample, how frequently retrospective review is conducted, the methods
for conducting the review, and the persons or entities who conduct the review. Reviews may be
conducted jointly by the Medicaid agency and the operating agency as part of the operating
agency’s routine oversight. When other methods are employed to satisfy this requirement, describe
the methods that are used and how they ensure that service plans meet applicable requirements.
CMS Review Criteria
• The process described to review plans indicates that the Medicaid agency exercises
oversight of service plans on a routine and periodic basis.
• If an in-depth review of a sample of service plans is conducted, the state has specified the
basis for the sample size, the frequency of these retroactive reviews, review methodology,
and persons/entities who conduct the review.
Item D-1-h: Service Plan Review and Update
Instructions

From the choices provided, specify the minimum schedule for the review and update of the service
plan.
Technical Guidance

The service plan is the fundamental tool for assuring the participant’s health and welfare. As such,
it must be subject to periodic review and update. Such reviews determine the ongoing
appropriateness and adequacy of the services and supports identified in the plan and ensure that
the services furnished are consistent with the nature and severity of the individual's disability and
continue to be responsive to the individual’s needs and preferences. A service plan must be
reviewed and updated no less than annually.
Specify the minimum frequency for reviewing and updating service plans, so long as the frequency
is at least annual. If the frequency is other than the selections offered, specify the frequency in the
“other” selection. A state may provide that the service plans of specific types of participants are
reviewed and updated on different schedules (e.g., the service plan of a person who has significant
medical issues might be reviewed more frequently than the plans of other participants). A state
may not provide for the automatic continuation of service plans. The plan must be reviewed and
updated as necessary.
CMS Review Criteria
The waiver service plan review schedule provides for conducting reviews no less than
annually.

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Item D-1-i: Maintenance of Service Plan Forms
Instructions

In the text field, specify the location or locations where copies of the services plan are maintained.
Technical Guidance

As provided in 45 CFR § 92.42, copies of service plans must be maintained in written or electronic
facsimile form for a period of three years from their ending date (or longer when required by state
law).
CMS Review Criteria
The waiver specifies where copies of service plans are maintained for a period of at least
three years.

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Appendix D-2: Service Plan Implementation
and Monitoring

Background

In order to assure participant health and welfare and the effective delivery of waiver services,
active, continuous monitoring of the implementation of the service plan is an essential component
of the waiver. The purpose of monitoring is to ensure that waiver services are furnished in
accordance with the service plan, meet the participant’s needs and achieve their intended
outcomes. Monitoring also is conducted to identify any problems related to the participant’s health
and welfare that may require action. In addition to the on-going monitoring of service plan
implementation that most typically is conducted by case management agencies, a state may specify
that other entities perform this monitoring. In addition, states may supplement service plan
monitoring. For example, a state may perform additional monitoring of health and welfare,
satisfaction with services, and the use of behavioral interventions. The state may specify a
minimum monitoring schedule and/or provide that the monitoring schedule and methods of
monitoring are incorporated into each participant’s service plan. The frequency with which
monitoring is performed may vary based on participant risk factors.
In its Quality Improvement Strategy, the state must describe the discovery, remediation and
improvement processes that it employs to ensure that there is continuous monitoring of the health
and welfare of waiver participants and remediation actions are initiated when appropriate.

Detailed Instructions for Completing Appendix D-2
Item D-2-a: Service Plan Implementation and Monitoring
Instructions

In the text field, specify: (a) the entity (entities) responsible for monitoring the implementation of
the service plan and participant health and welfare; (b) the monitoring and follow-up method(s)
that are used; and, (c) the frequency with which monitoring is performed.
Technical Guidance

At a minimum, the description of monitoring methods and processes must address the following:
• The entity or entities responsible for monitoring service plan implementation and participant

health and welfare;
• The minimum frequency of monitoring, including the frequency of direct, in-person contact
with the participant;
• How monitoring methods determine whether:






Services are furnished in accordance with the service plan;
Participants have access to waiver services identified in the service plan (e.g., has the
participant encountered problems in securing services authorized in the service plan?);
Services meet the needs of the participant;
Back-up plans are effective;
Participant health and welfare is assured;

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CMS Review Criteria
The waiver specifies:
 entity(ies) responsible for monitoring;
The

Monitoring
methods and frequency to the target population, e.g. including the frequency

of direct, in-person contact with the participant.

Participants exercise free choice of providers; and,

have access
to non-waiver services identified in the service plan, including
• How Participants
monitoring methods
address:
access
to
health
services.
 Services furnished in accordance with the service plan;
• Methods
to ensure
prompt
follow services
up of identified
problems,
including
 Participant
access
to waiver
identified
in service
plan; problems identified
byparticipants,
providers
and others;
and,
Participantsservice
exercise
free choice
of provider;
 Services
meet
participants’
needs;
• How
information
derived
from monitoring
is compiled and reported to the state.
 Effectiveness of back-up plans;
 Participant health and welfare; and
 Participant access to non-waiver services in service plan, including health services.
• Methods for prompt follow-up and remediation of identified problems.
• Methods for systematic collection of information about monitoring results is compiled,
including how problems identified during monitoring, are reported to the state.

•
•

Item D-2-b: Monitoring Safeguards
Instructions

Indicate whether entities and/or individuals that are responsible for monitoring service plan
implementation and participant health and welfare are permitted to provide other direct (non-case
management) services to the waiver participant. If such entities and/or individuals are permitted
to furnish other direct waiver services, describe the safeguards that have been established to ensure
that monitoring is conducted in the best interests of the participant.
Technical Guidance

Safeguards should be established when entities that furnish direct waiver services have
responsibility for service plan monitoring to avoid problems (e.g., self-monitoring) that may arise
in this circumstance. The safeguards should include an option for the participant to choose a
different entity or individual to monitor the plan; direct oversight of the process; conducting an
independent assessment of the effectiveness of monitoring or periodic evaluation by a state agency;
restricting the entity that develops the plan from monitoring services without the direct approval
of the state; requiring that agency monitoring functions be administratively separate from service
provision functions.
CMS Review Criteria
When service plan monitoring is performed by entities/individuals that furnish direct services,
the safeguards described ensure that monitoring is conducted in the best interests of the waiver
participant.

Quality Improvement: Service Plan
Service Plan

The state demonstrates it has designed and implemented an effective system for reviewing
the adequacy of service plans for the waiver participants.

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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 or when warranted by changes in the
waiver participant’s needs.
Services are delivered in accordance with the service plan, including in the type, scope,
amount, duration, and frequency specified in the service plan.
CMS Revieware
Criteria
Participants
afforded choice between/among waiver services and providers.
• The discovery of compliance with this assurance and the remediation of identified
problems must address:
Instructions

1) How
the Medicaid
assures compliance
with
the following
plan
The QIS must
describe
how the agency
state Medicaid
Agency will
determine
that service
each waiver
assurance (andsubassurances:
its associated component elements) is met. The waiver assurance and
2) Service
plans above.
addressFor
alleach
participants’
assessed
(including must
health
and
component elements
are listed
component
element,needs
this description
include:
safety risk factors) and personal goals, either by waiver services or through other
• Activities ormeans.
processes that are related to discovery and remediation, i.e., review, assessment
or monitoring processes; who conducts the discovery or remediation activities and with what
3) The state monitors service plan development in accordance with its policies and
frequency. These monitoring activities provide the foundation for quality improvement by
procedures.
generating information regarding compliance, potential problems and individual corrective
plans can
are be
updated/revised
at analyzed
least annually
or when
by
actions.4)TheService
information
aggregated and
to measure
the warranted
overall system
changes
in
the
waiver
participant’s
needs.
performance in meeting the waiver assurances. The types of information used to measure
5) Services
delivered
in accordance
with the service plan, including in the type,
performance,
shouldare
include
relevant
quality measures/indicators.
scope,
amount,
duration,
and
frequency
specified
theinformation)
service plan.of discovery
• The entity or entities responsible for reviewing the results
(datainand
6) Participants
are afforded
choice:
and remediation
activities
to determine
whether the performance of the system reflects
compliance with the assurances;
7) and,
Between waiver services and institutional care; and
8)
Between/among
waiver services and providers.
• The frequency at which system performance
is measured.
Technical Guidance

This QIS element
focuses
on discovery
remediationand
activities, that is, processes to assess,
9) How
frequently
oversightand
is conducted;
review, evaluate or otherwise analyze a program, process, operation, or outcome. Specifically, the
10) The entity (or entities) responsible for the discovery and remediation activities.
evidence produced as a result of discovery and remediation activities should provide a clear picture
of the state’s compliance in meeting an assurance.

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Appendix E: Participant Direction of
Services

Brief Overview

Appendix E addresses how the waiver affords participants the opportunity to direct some or all of
their waiver services. The addition of Appendix E to the waiver application recognizes that
participant direction is an increasingly common feature of waivers. Appendix E facilitates the
incorporation of participant direction opportunities into any waiver, including waivers where
participants may elect to receive traditional provider-managed services.
There are two parts to this Appendix:
•
•

Appendix E-1 describes the waiver’s overall approach to participant direction.
In Appendix E-2, more detailed information is provided about the specific participant direction
opportunities that are available under the waiver.

Both parts of the Appendix must be completed whenever a waiver incorporates one or both of the
participant direction opportunities (i.e., the Employer Authority and/or Budget Authority) that are
described in more detail below.
CMS urges that all states afford waiver participants the opportunity to direct some or all of their
waiver services. Participant direction of services has been demonstrated to promote positive
outcomes for individuals and families, improve participant satisfaction and be a cost-effective
service delivery method.

Overview: Participant Direction of Waiver Services
Participant direction of waiver services means that the waiver participant has the authority to
exercise decision making authority over some or all of her/his waiver services and accepts the
responsibility for taking a direct role in managing them. Participant direction is an alternative to
provider management of services wherein a service provider has the responsibility for managing
all aspects of service delivery in accordance with the participant-centered service plan. Participant
direction promotes personal choice and control over the delivery of waiver services, including who
provides services and how they are delivered. For example, the participant may be afforded the
opportunity and be supported to recruit, hire, and supervise individuals who furnish daily supports
as well as to terminate an employee who is not performing in a satisfactory manner. When a waiver
service is provider-managed, a provider selected by the participant carries out these
responsibilities.
Incorporating participant direction into a waiver involves several interrelated dimensions. The
following is an overview of the main dimensions of participant direction under a waiver:
Participant Choice
A waiver may be designed to exclusively serve individuals who want to direct some or all of their
waiver services. When this is the case, there needs to be another program that is available to
individuals who do not wish to direct their services. Alternatively, a waiver may permit
participants to direct some or all of their services or opt instead to receive provider-managed
services exclusively. The Version 3.6 HCBS Waiver Application supports both basic waiver
designs. When a waiver exclusively serves persons who want to direct some or all of their waiver
services, this design must be reflected in Appendix B-1 (Item B-1-b – additional targeting criteria)
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and in Appendix E-1. In Appendix E-1, the waiver may further specify that participant direction
opportunities are limited to individuals who reside in designated types of living arrangements.
Whenever the application refers to the election of participant direction or the exercise of decision
making authority, references to the participant mean: (a) the participant acting independently on
her/his own; (b) the parent(s) of a minor child who is a waiver participant acting on behalf of the
child; (c) a legal representative when the representative has the authority to make pertinent
decisions on behalf of the participant; and, (d) when permitted by the state, a non-legal
representative who has been freely chosen by the participant to make decisions on the participant’s
behalf.
Geographic Limitation
As discussed in the instructions for Item 4-c (statewideness) in the Application Module
(statewideness), the waiver may make participant direction opportunities available in some but not
all the geographic regions where the waiver is in effect.
Service Specifications
In Appendix C-3, each service offered under the waiver may be specified as provider-managed,
participant-directed, -or both. The instructions for Appendix C-3 discuss the considerations
associated with the specification of service delivery method. In general, the exercise of the
participant direction opportunities (authorities) that are discussed below applies only to the waiver
services that have been designated as participant-directed.
Participant Direction Opportunities
Appendix E-1 provides for the selection of two basic participant direction opportunities that may
be made available through a waiver. These opportunities may be and often are used in combination
and are not mutually exclusive. The opportunities are:
•

Participant Employer Authority. Under the Employer Authority, the participant is supported
to recruit, hire, supervise and direct the workers who furnish supports. The participant
functions as the common law employer or the co-employer of these workers. When the
Employer Authority is utilized, the participant rather than a waiver provider agency carries out
employer responsibilities for workers. The dimensions of participant decision making under
the Employer Authority are specified in Appendix E-2-a of the application; and,

•

Participant Budget Authority. Under the Budget Authority, the participant has the authority
and accepts the responsibility to manage a participant-directed budget. Depending on the
dimensions of the budget authority that are specified in Appendix E-2-b, this authority permits
the participant to make decisions about the acquisition of waiver goods and services that are
authorized in the waiver service plan and to manage the dollars included in a participantdirected budget.

As noted above, these two authorities are often used in combination to promote full-featured
participant direction of waiver services.
Supports for Participant Direction
When a waiver offers participant direction opportunities, two types of supports must be made
available to facilitate participant direction. These supports may be furnished as a waiver service
(as specified in Appendix C-3) or under another Medicaid payment authority (principally as a
Medicaid administrative activity). Supports furnished as a Medicaid administrative activity must
be in accordance with the approved cost allocation plan. When one or both types of supports are
furnished under another payment authority, they are described in detail in Appendix E-1. These
supports are:

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•

Information and Assistance in Support of Participant Direction. These supports are made
available to participants to help them manage their waiver services. For example, assistance
might be provided to help the participant locate workers who furnish direct supports or in
crafting the service plan. The type and extent of the supports that must be available to
participants depends on the nature of the participant direction opportunities provided under the
waiver.

•

Financial Management Services. These services are furnished for two purposes: (a) to
address federal, state and local employment tax, labor and workers’ compensation insurance
rules and other requirements that apply when the participant functions as the employer of
workers and (b) to make financial transactions on behalf of the participant when the participant
has budget authority. There are two types of FMS services that may be employed to support
participants who exercise the Employer Authority: (1) Fiscal/Employer Agent (Government or
Vendor) where the entity is the agent to the common law employer who is either the participant
or his or her representative or (2) Agency with Choice, where the participant and the agency
function as co-employers of the participant’s worker(s).
The Internal Revenue Service and the United States Department of Labor (Wage and Hour
Division) have regulations concerning the pay of employees and tax withholding that may
differ based on self-direction program characteristics. It is highly recommended that the state
become familiar with these rules relative to self-direction and assure that Financial
Management Services providers are competent in managing these requirements. These
agencies are available to provide technical assistance to states as needed. It is the state’s
responsibility to ensure that it is operating the waiver consistently with all state and federal
requirements.

While their main purpose is to facilitate participant direction of services, these supports also
provide important protections and safeguards for participants who direct their own waiver services.
More detailed information about each of these dimensions of participant direction is contained in
the item-by-item instructions.

Detailed Instructions for Completing Appendix E
Appendix E must be completed when there is an affirmative response to Item 3-E in the
Application Module.
When a concurrent 1915(j) state plan authority authorizes self-direction in the waiver, the state’s
Appendix E should reflect this with the state referring to the 1915(j) in regard to service definitions,
supports for self-direction services and financial management services. Those services covered
solely through the 1915(j) should not be listed in Appendix E and not included in Appendices C,
I and/or J. A service that has both a 1915(j) and non-self-directed 1915(c) component should be
included in all applicable appendices, with cost information based only on that portion covered by
the 1915(c) waiver.
Appendix E: Initial Section

Item: Applicability
Instructions

Indicate whether the waiver provides for one or both of the participant direction opportunities that
are specified in the Appendix. If the response is “no,” do not complete the remainder of the
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Appendix. If “yes,” proceed to Appendix E-1. In the web-based application, this item is linked to
Item 3-E in Module 1. The responses to both items must be consistent.
Technical Guidance

As discussed in the technical guidance for item 3-E in the Application Module, this selection
should be made after carefully reviewing these instructions in order to determine the applicability
of this Appendix.

Appendix E-1: Overview

Overview of Appendix E-1

In this Appendix, the following topics are addressed:
•
•
•
•
•
•
•
•
•

The waiver’s overall approach to participant direction;
The participant direction opportunity or opportunities offered under the waiver;
Whether there are limitations on the election of participant direction;
The role of representatives in participant direction;
The waiver services that may be participant directed along with the participant direction
opportunity or opportunities that apply to each;
How the waiver provides for financial management services and information and assistance in
support of participant direction;
Whether independent advocacy is available to participants who direct their services;
The circumstances under which participant direction may be terminated; and,
The state’s goals regarding the number of participants who will direct some or all of their
waiver services.

Detailed Instructions for Completing Appendix E-1
Item E-1-a: Description of Participant Direction
Instructions

In no more than two pages (12,000 characters), provide an overview description of the participant
direction opportunities that are afforded in the waiver. This overview is intended to provide CMS
with a broad understanding of the waiver’s participant direction opportunities, including: (a) the
nature of the opportunities afforded to participants; (b) how participants may take advantage of
these opportunities; (c) the entities (e.g., support brokers, case management, financial management
services entities) that play a role in supporting individuals who direct their services and the types
of supports that they provide; and, (d) other relevant information about the waiver’s approach to
participant direction that may not be addressed elsewhere in this Appendix or the remainder of the
application.

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CMS Review Criteria
The overview contains a description of all of the following:
•
•
•
•

The participant direction opportunities afforded to waiver participants;
The process by which participants may access these participant direction opportunities;
The entities involved in supporting participant direction; and,

The types of supports that each entity provides.

Item E-1-b: Participant Direction Opportunities
Instructions

Select whether the waiver provides for the Employer Authority, the Budget Authority or both
opportunities for participant direction in combination. When the Employer Authority is selected,
Item E-2-a must be completed in Appendix E-2. When the Budget Authority is selected, Item E-2b must be completed in Appendix E-2. When the “Both Authorities” selection is made, both Items
E-2-a and E-2-b must be completed in Appendix E-2.
Technical Guidance

In brief, these two opportunities for participant direction entail the following:
•

•

Employer Authority. Under the Employer Authority, the participant exercises choice and
control over workers who furnish supports. The participant directly selects and supervises the
workers who furnish waiver services to which this authority applies (e.g., personal assistance,
attendant services). As provided in Item E-2-a, this authority may be exercised by the
participant functioning as the co-employer or the common law employer of support workers.
Item E-2-a specifies the dimensions of participant decision-making authority under this
opportunity. The Employer Authority has been used in its own right in many waivers in
conjunction with the provision of personal assistance, attendant care and similar services. The
principal defining characteristic of this authority is that the participant functions as the
employer of workers.
Budget Authority. Under the Budget Authority, the participant exercises decision-making
authority and management responsibility for a participant-directed budget from which the
participant authorizes the purchase of waiver goods and services that are authorized in the
service plan. The participant also may be afforded the flexibility to shift funds among
authorized services within the total amount of the budget without prior review and approval
(however, changes that affect the service plan must be documented). Item E-2-b specifies the
dimensions of participant decision-making authority under this opportunity, including how the
participant-directed budget is determined. The principal defining characteristic of this authority
is the establishment of a participant-directed budget. Budget authority usually means that the
participant may exercise ongoing decision making over the mix of waiver services.

Each of these authorities may stand on its own. It is increasingly common practice for waivers
to offer both authorities (i.e., the participant manages a budget and functions as the employer or
co-employer of workers).

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CMS Review Criteria
One or both opportunities must be selected.

Item E-1-c: Availability of Participant Direction by Type of Living Arrangement
Instructions
The waiver may limit participant direction by type of living arrangement. Here, by checking each choice
that applies, specify whether participant direction is available for:
•
•

•

Participants who live with their families or in their own private residence;
Participants who reside in living arrangements where services (regardless of funding source)
are furnished to fewer than four persons who are unrelated to the proprietor (e.g., supported
living or housing); and/or,
Persons who reside in other living arrangements as specified by the state. Such living
arrangements might include assisted living facilities and similar arrangements. This choice also
may be selected when the first two choices do not accurately describe the living arrangements
where participant direction is supported. For example, participant direction may be supported
in some but not all types of smaller living arrangements. Specify the other types of living
arrangements where participant direction is available in the text field, including the size of
these living arrangements (i.e., the number of individuals who are served in each type of living
arrangement).

Technical Guidance

A state has the option to limit opportunities for participant direction by type of participant living
arrangement. Participant direction is commonly associated with individuals who live on their own
or reside with their families. Participant direction may be less feasible when individuals are served
in larger, provider-controlled living arrangements such as group homes. It is up to the state to
decide whether participant direction is supported in some or all types of living arrangements.
However, if the waiver will operate with a concurrent 1915(j) authority, the person self-directing
may not reside in a provider owned or operated home.
There are two implications to limiting participant direction to some but not all types of participant
living arrangements. The first implication is that, although a participant’s service plan may include
one or more waiver services that the state has designated (in Appendix C-3) as available for
participant direction, participant direction of the service(s) will not be made available to
participants who reside in a living arrangement where opportunities for participant direction are
not supported. When participant direction is available in all types of living arrangements, then all
participants regardless of living arrangement may elect to direct any service that has been
designated in Appendix C-3 as participant-directed.
The second implication of limiting participant direction by type of living arrangements is that, in
order to direct their services, participants who reside in living arrangements where participant
direction is not supported must change their living arrangement to a type of living arrangement
where participant direction is supported.

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CMS Review Criteria
When the third choice (other living arrangement) is selected, the waiver specifies the types of
other living arrangements where participant direction is supported.
Item E-1-d: Election of Participant-Direction
Instructions

Select one and only one of the three choices. When the third choice is selected, specify the
additional criteria that are applied in determining whether a participant may direct some or all of
their waiver services. These additional criteria should not include participant living arrangement
(addressed in the foregoing item).
Technical Guidance

A waiver may be designed to serve only individuals who want to direct their services. When this
is the case, select the first choice. If a waiver only serves persons who want to direct their services
(e.g., it is expected that all waiver participants will direct at least some of their waiver services),
Item B-1-b in Appendix B (additional targeting criteria) also must specify that the waiver is limited
to individuals who want to direct some or all of their services.
The second selection applies in waivers where participants may elect to direct their waiver services
but also have the option of receiving their waiver services solely on a provider-managed basis (i.e.,
the waiver does not solely target persons who want to direct their waiver services) or a combination
of both service delivery options. The waiver must provide that there are comparable providermanaged services available for participants who elect not to direct their services. When this choice
is selected, the waiver does not impose additional criteria on the election of participant direction.
Any participant may freely elect to direct some or all of their waiver services.
If the waiver does not support participant direction in some types of living arrangements, then the
election of participant direction choice applies only to participants who reside in living
arrangements where participant direction is supported. The election of participant direction also
is affected by whether a person’s service plan includes services that may be participant-directed,
as specified in Appendix C-3.
The third selection permits specifying whether the election of participant direction is subject to
additional criteria (over and above participant living arrangement, if applicable). For example,
participant direction might not be offered to participants who have substantial cognitive
impairments and who do not have a representative or circle of support to assist in directing their
services. Alternatively, participant direction might not be offered to persons who are involved in
the criminal justice system or exhibit other challenges that require close supervision. A waiver
may reasonably require that participant direction only will be offered to participants who have
received an orientation to participant direction in advance of deciding to direct some or all of their
services.
When additional criteria are specified that have the effect of restricting the participants who may
elect participant direction, state them clearly in the text field. In general, these criteria should not
deny the choice of participant direction based on factors that can be reasonably accommodated
through the provision of information and assistance and other supports that would enable the
participant to direct his/her services. For example, a participant’s lack of experience in directing
services generally is not a reasonable criterion for not offering participant direction since training
and other supports can be offered to assist the participant to acquire the necessary skills. CMS

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urges states not to impose restrictions based on assessment of “ability” or “capacity” that have the
effect of denying opportunity to direct their services based on disability. States will also wish to
consider the Olmstead implications of such exclusions. Under this selection, participants who are
afforded the opportunity to direct their services also must have the option to receive providermanaged services exclusively. A determination not to afford a participant the opportunity to direct
waiver services is not subject to the Fair Hearing process since participant direction is a method of
service delivery and the services that the participant may receive are unaffected when the
opportunity to direct the services is denied.

CMS Review Criteria
• When the first choice is selected, the additional targeting criteria in Item B-1-b in Appendix
B-1 specify that the waiver is limited to persons who want to direct their services.
• When the third choice is selected, the additional criteria that are used to determine whether
a person may direct some or all of their services:
 Are specified and well-defined
 Do not include a blanket exclusion of individuals solely on the basis that they have
specific cognitive or other disabilities
 Do not exclude participants solely on the basis of an assessment that the individual, in
isolation, is unable to carry out some of the responsibilities associated with participant
direction

Item E-1-e: Information Furnished to Participants
Instructions

In the text field, specify: (a) the information about the participant direction opportunities (e.g., the
benefits of participant-direction, participant responsibilities, and potential liabilities) that is
provided to the participant (or the participant’s representative) to inform decision-making about
the election of participant direction; (b) the entity or entities responsible for furnishing this
information; and, (c) how and when this information is provided. If the response cites formal state
policies, procedures and/or written materials that are furnished to waiver participants to inform
their decision making, the materials cited must be readily available to CMS upon request through
the Medicaid agency or the operating agency (if applicable).
Technical Guidance

There are many potential benefits to participants in directing their services. At the same time,
participant direction entails the participant accepting many responsibilities that service providers
usually assume (e.g., recruiting, hiring, supervising and discharging workers) and shouldering
some potential liabilities (which may be mitigated through the provision of supports for participant
direction). As a result, participants should have available timely information about participant
direction to inform their decision making about whether to direct their waiver services.
Information about participant direction may be furnished to participants during the service plan
development process, through conducting separate orientations to participant direction, and/or by
other means (the availability of employer skills training).

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CMS Review Criteria
The waiver:
• Provides that participants are furnished information about the benefits and potential
liabilities associated with participant direction along with information about their
responsibilities when they elect to direct their services.
• Specifies a specific entity or entities that are responsible for furnishing this information.
• Describes the process (e.g., as part of service plan development or by other means) by which
this information is provided to individuals and/or representatives.
• Provides that information is furnished on a timely basis to permit informed decision making
by the participant – i.e., prior to or during entrance to the waiver or as part of service plan
development – allowing sufficient time for the participant to weigh the pros and cons of
participant direction and obtain additional information as necessary before electing
participant direction.
Item E-1-f: Participant Direction by a Representative
Instructions

Select whether waiver services may be directed by a representative on behalf of the waiver
participant and, if so, the type or types of representatives who may direct services. When a
representative who is not a legal guardian may direct services, provide information about the
policies that apply to the role of such representatives.
Technical Guidance

The waiver may provide that services may be directed by a representative on behalf of the
participant. In the case of child (legal minors) waiver participants, parents exercise decision
making on behalf of the child. For the purpose of the application, parents of minor children are
considered to be legal representatives.
The waiver may limit decision making to legal representatives (e.g., legally appointed guardians
of adults) and/or may provide that an individual who is not a legal representative and has been
freely chosen by the participant may direct services in consultation with the participant. With
respect to the latter, non-legal representatives could include a parent of an adult or a spouse who
is not a legal guardian or representative. A non-legal representative also could be another relative
of the participant or a friend of the participant.
When the waiver provides that a non-legal representative may direct services on behalf of the
participant, specify in the text field the state’s policies concerning the appointment of this type of
representative (e.g., a requirement that the participant assign decision-making responsibility by
executing a limited power of attorney) and the extent of the decision-making authority that these
individuals may exercise on behalf of the participant.
When a non-legal representative may serve as a decision maker, the safeguards that ensure the
representative will function in the best interests of the participant also must be specified. An
example of such a safeguard could be that such a representative may not also be paid to provide
waiver services to the participant.

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CMS Review Criteria
The use of representatives to direct waiver services on behalf of a participant is at the discretion
of the state. When waiver services may be directed by a non-legal representative:
•
•

The waiver describes the process for the appointment of this type of representative and the
extent of the decision-making authority exercised by the non-legal representative.
The waiver includes safeguards to ensure that a non-legal representative functions in the
best interests of the participant.

Item E-1-g: Participant Directed Services
Instructions

List in the table the services that are specified in Appendix C-3 as participant-directed. For each
listed service, specify whether the Employer Authority, Budget Authority or both authorities apply
to the service. In the web-based application, this table is auto-populated with the services that have
been specified as participant-directed in Appendices C-1/C-3.
Technical Guidance

See the instructions for Appendix C-3 concerning the designation of a service as participantdirected, provider-managed or both.
CMS Review Criteria
• When the Employer Authority is offered (as specified in Item E-1-b), it applies to at least
one waiver service.
• When the Budget Authority is offered (as specified in Item E-1-b), it applies to at least one
but usually to two or more waiver services.
•

Overview: Financial Management Services
The next two application items concern Financial Management Services (FMS). FMS are a critical
support for participant direction, especially under the §1915(c) HCBS waiver framework. The
§1915(c) waiver authority does not permit making payments for services directly to a waiver
participant, either to reimburse the participant for expenses incurred or enable the participant to
directly pay a service provider. Instead, payments must be made through an intermediary
organization that performs financial transactions (paying for goods and services or processing
payroll for participants’ workers included in the participant’s service plan) on behalf of the
participant.
An FMS entity plays this role when the waiver includes the Employer Authority or Budget
Authority opportunity. Under the Employer Authority, when a participant functions as the
employer of direct support workers, FMS are an important safeguard for participants and workers
alike. The provision of Fiscal/Employer Agent FMS ensures that federal, state and local
employment taxes and labor and workers’ compensation insurance rules related to household
employment and payroll are implemented in an accurate and timely manner and, if included in a
state’s Fiscal/Employer Agent FMS model, that invoices for goods and services included in the
participant’s service plan are paid appropriately and in a timely manner. The provision of Agency
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with Choice (co-employer) FMS ensures that the necessary employer-related duties and tasks,
including payroll, are carried out. FMS provided under these two models is an important safeguard
for participants because it ensures that participants are in compliance with federal and state tax,
labor, workers’ compensation insurance and Medicaid regulations. The term “Financial
Management Services” or “FMS” is used to distinguish this important participant direction support
from the activities that are performed by intermediary organizations that function as Medicaid
fiscal agents.
With respect to each participant direction opportunity, FMS entities generally perform the
following basic functions:
Budget Authority
• Act as a neutral bank, receiving and disbursing public funds, tracking and reporting on the
participant’s budget funds (received, disbursed and any balances) (Fiscal/Employer Agent
FMS);
• Process and pay invoices for goods and services in the participant’s approved service plan
(Fiscal/Employer Agent FMS); and,
• Prepare and distribute reports (e.g., budget status and expenditure reports) to participants and
other entities specified in the waiver (Fiscal/Employer Agent and Agency with Choice FMS).
Employer Authority
• Assist the participant in verifying workers’ citizenship or legal alien status (e.g., completing
and maintaining a copy of the BCIS Form I-9 for each support service worker the participant
employs) (Fiscal/ Employer Agent and Agency with Choice FMS);
• Collect and processes support worker’s timesheets; (Fiscal/ Employer Agent and Agency with
Choice FMS) and,
• Operate a payroll service, (including withholding taxes from workers’ pay, filing and paying
federal (e.g., income tax withholding, FICA and FUTA), state (e.g., income tax withholding
and SUTA), and, when applicable, local employment taxes and insurance premiums); and,
distribute payroll checks on the participant’s behalf (Fiscal/ Employer Agent and Agency with
Choice FMS).
When specified in the waiver, an FMS entity may perform additional functions, including
executing provider agreements on behalf of the Medicaid agency or brokering and paying
worker’s compensation or other types of insurance premiums on behalf of participants. A waiver
also might provide that the FMS entity furnishes orientation/skills training to participants about
their responsibilities when they function as either the common law employer or co-employer of
their direct support workers. The nature and scope of necessary financial management services
hinges on the participant direction opportunities that are available under the waiver. The scope
of FMS is necessarily broader when the waiver provides for both the Employer and Budget
Authorities.
FMS may be furnished as a waiver service. The “Core Service Definitions” attachment to the
Appendix-C instructions includes information and guidance about the coverage of FMS as a
waiver service. FMS also may be provided as a Medicaid administrative activity in accordance
with the approved cost allocation plan. The technical guidance for Item E-1-j (below) provides
more information about this option. As a general matter, under either option, an FMS entity may
furnish the same range of supports to waiver participants who direct their services. However,
there are some differences between the two ways of underwriting the costs of FMS under
Medicaid. The following table summarizes some of the key differences associated with funding
FMS under either of the payment authorities and may assist in selecting the option under which
FMS are furnished.
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FMS: Waiver Service v. Administrative Activity
Payment Authority
Feature

Waiver Service

Administrative Activity

FFP Rate

State’s Federal Medical Assistance
Percentage (FMAP) rate

Administrative FFP rate (50%)

FMS Entities

Any provider that meets qualifications specified in Appendix C-3

Administrative procurement (e.g.,
RFP) – The number of FMS entities
may be limited.

Participant selection of FMS entity

Free choice of any qualified FMS
provider

Limited to FMS entities contracted
by the state

Contractual relationship between
FMS and state

Medicaid provider agreement
between FMS entity and the state

Contract between FMS entity and the
state

Organized Health Care Delivery
System (OHCDS) [N.B., See
Appendix I-3 instructions, Item I3-g-iii for a discussion of OHCDS]

FMS entity may function as an
OHCDS by virtue of providing a
waiver service (FMS)

May function as an OHCDS when
entity meets the criteria to be
designated as OHCDS (i.e., renders
one Medicaid service directly).

Provider Agreements (for services
other than FMS)
(see also next section)

Non-OHCDS Arrangement
Medicaid provider agreements are
required for all providers.
OHCDS Arrangement
Medicaid provider agreement not
required except for OHCDS entity;
other providers must have an
agreement/contract with
FMS/OHCDS

Non-OHCDS Arrangement
Medicaid provider agreements are
required, except for vendors of nontraditional retail goods and services,
as provided in following section
entitled “Purchase of Certain Goods
and Services through an FMS Entity”
OHCDS Arrangement
Medicaid provider agreement not
required except for OHCDS entity;
other providers must have an
agreement/contract with
FMS/OHCDS

Execution of Medicaid provider
agreement

When FMS entity is not an OHCDS,
FMS may execute provider agreement when expressly authorized by
the state in accordance with the
Medicaid agency’s standards.

FMS may execute provider
agreement when expressly authorized
by the state in accordance with the
Medicaid agency’s standards (when
entity is not an OHCDS).

Flow of billings for non-FMS
waiver services

OHCDS Arrangement
FMS entity submits billings to and
receives payment from the state for
all services furnished by providers
affiliated with the OHCDS and with
which there is an agreement/
contract.
Non-OHCDS Arrangement
FMS may function as a limited fiscal
agent when authorized by the state

OHCDS Arrangement
FMS entity submits billings to and
receives payment from the state for
all services furnished by providers
affiliated with the OHCDS and with
which there is an agreement/
contract.
Non-OHCDS Arrangement
FMS may function as a limited fiscal
agent when authorized by the state

Purchase of Certain Goods and Services through an FMS Entity
In some instances, it is more economical and efficient to purchase goods and services on behalf of
participants from vendors on a retail basis. Requiring that there be a formal agreement with such
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vendors could prove to be unnecessarily burdensome and delay the acquisition of goods and
services that have been authorized in the service plan. For example, in lieu of securing the services
of a homemaker, it might be more appropriate for a participant to engage a commercial cleaning
company to perform tasks such as household cleaning. Some types of goods (e.g., household
appliances) are readily obtainable through retail establishments.
When FMS entities function as an OHCDS, the state may include the provision of goods and
services (when a covered as a service in the waiver) in its provider agreement with such entities.
The FMS may then purchase goods and services authorized in the service plan on the participant’s
behalf and bill the costs of such goods and services to the state. An agreement with a vendor is
not required but there must be documentation to verify the purchase of the good or service and the
goods and services must meet the standards specified in the waiver. Providers of the goods and
services benefit cannot be limited to those FMS entities willing to operate as an OHCDS.
When FMS entities do not function as an OHCDS (e.g., FMS is funded as an administrative
activity and that entity does not meet the criteria to operate as an OHCDS), the state may
specifically authorize in its agreement with such entities to acquire goods and services from retail
vendors on behalf of the participant. In general, this authorization should only extend to incidental,
non-routine purchases of goods and services on behalf of a waiver participant rather than services
that are regularly provided to the participant. In its agreement with the FMS entity, the state should
require the FMS entity to document such purchases by obtaining receipts or other documentation
to verify that the goods and services were delivered in accordance with the standards specified in
the waiver. The agreement must hold the FMS entity accountable for such purchases.
Item E-1-h: Financial Management Services
Instructions

Specify whether financial management services are provided. If such services are provided,
indicate whether they are provided by governmental or private entities or both (by selecting both
types). If the “no” response is selected, do not complete item E-1-i.
Technical Guidance

In almost all cases, the provision of FMS is a necessary feature of participant direction of waiver
services. A wide range of entities may furnish FMS. When the participant is the common law
employer of his or her worker, a state may choose to provide Fiscal/Employer Agent FMS directly
or use a reporting or subagent through its fiscal intermediary in accordance with Section 3504 of
the IRS code and Revenue Procedure 80-4 and Notice 2003-70 (See Attachment D to the
instructions). Or a state also may choose to provide Fiscal/Employer Agent FMS through vendor
organizations that have the capabilities to perform the required tasks in accordance with Section
3504 of the IRS code and Revenue Procedure 70-6 (either through a contract or through a Medicaid
provider agreement). When a state elects to furnish FMS solely through governmental entities,
administrative claiming must be employed to underwrite the cost of FMS.
When the participant is a co-employer of his or her worker(s), agencies that support the philosophy
of participant direction may provide Agency with Choice services acting as a co-employer with
the participant. A state may allow an FMS entity or a traditional provider organization to fulfill
such a function. In either event, the state should establish qualifications for agencies with choice.
When a state allows individuals the opportunity for a co-employer arrangement utilizing an agency
with choice model, but utilizes traditional Medicaid payment mechanisms to remit payment to the
provider (rendering a “no” response in E-1-h appropriate), or when the entity is more akin to an
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employers, the standards and qualifications that the state requires of such entities, and the
safeguards in place to ensure that individuals maintain control and oversight of the employee.
In addition, states should consider conducting initial FMS readiness reviews and ongoing
performance reviews of their FMS providers to ensure that the FMS providers are providing the
required services in accordance with federal and state requirements.
CMS Review Criteria
The selection is at the discretion of the state. However, it is expected that in nearly all instances
that the “yes” response will be selected. If the no response is selected, then the application
should be reviewed to determine that the selection is appropriate.
Item E-1-i: Provision of Financial Management Services
Instructions

Specify whether financial management services are provided as a waiver service or conducted as
a Medicaid administrative activity.
Technical Guidance

As previously noted, FMS may be furnished as a waiver service or performed as a Medicaid
administrative activity. If furnished as Medicaid administrative activity, it must be done in
accordance with the approved cost allocation plan. Cost allocation plans are not approved via the
HCBS Waiver application.
Information must be provided about the nature and scope of the activities performed by the FMS.
In particular:
i. Types of Entities. Specify the types of entities that furnish FMS (e.g., Vendor or
Government Fiscal Employer Agent or Agency with Choice provider). See the discussion
of this topic above. States should be cautious about using the Agency with Choice FMS
option to support the Budget Authority, especially with respect to ensuring that waiver
participants can exercise free choice of provider when the entity that serves as the Agency
with Choice also furnishes other waiver services. Also describe the procurement method
that is used to select entities to furnish FMS. When private entities furnish FMS, the
procurement method must meet the requirements that are set forth in 45 CFR § 92.42. The
description of the procurement method also should include whether the procurement
results in the selection of a single entity or multiple entities to furnish FMS.
ii. Payment for FMS. Specify how entities are compensated for furnishing FMS (e.g., a
per transaction fee, a monthly fee per participant, a combination of both types of fees, or
another method). FMS services may not be compensated on the basis of a percentage of
the total dollar volume of transactions that an FMS entity processes. It is not necessary
to specify the specific amount of the fees that are paid for FMS.
iii. Scope of FMS. This item provides for check offs for the FMS that are furnished in
support of participants who exercise the Employer Authority and the Budget Authority.
The first two sections lists the FMS participant-oriented supports that are related to each
participant direction opportunity as described in the overview of financial management
services above. Select the supports that are provided under each applicable authority.
The final section (“additional administrative functions/activities”) lists additional
activities/functions. As discussed in the instructions for Appendix A, the Medicaid

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agency may specifically authorize in writing that another entity (including an FMS entity)
may execute the Medicaid provider agreement. Under such an arrangement, the FMS
entity, for example, may execute the provider agreement with personal assistants selected
by the individual. The second check-off indicates that the FMS functions as a limited
fiscal agent on behalf of the Medicaid agency. That is, the entity processes billings,
receives payment from the Medicaid agency for approved claims and disburses funds to
providers. The final check-off is linked to the Budget Authority. It identifies whether the
FMS prepares and distributes reports about expenditures and the participant budget to
other entities in addition to the participant.
In each case, provision has been made for describing additional supports (e.g., training
participants in worker supervision or maintaining a roster of qualified workers) in
addition to those listed. When additional supports are specified, the activity must be
necessary for the proper and efficient administration of the waiver in order to qualify for
administrative FFP.
iv. Oversight of FMS Entities. In the text field, specify: (a) the methods that are used to
monitor and assess the performance of FMS entities, including ensuring the integrity of
the financial transactions that they perform; (b) the entity (or entities) responsible for
performing this monitoring; and, (c) how frequently performance is assessed.
Performance monitoring and assessment may include conducting periodic audits of FMS
activities, requiring that FMS entities conduct customer satisfaction surveys and
periodically report the results of such surveys to the state, conducting independent
participant satisfaction surveys, and/or using other methods/procedures.

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CMS Review Criteria
The necessary minimum scope of financial management services hinges on the participant
direction opportunities (Employer and/or Budget Authority) that are available under the waiver
and further specified in Appendix E-2. FMS may be furnished either as a waiver service (as
specified in Appendix C-3) or an administrative activity in accordance with an approved cost
allocation plan (as specified in this item). Regardless of the payment authority (service or
administrative) that is used to underwrite the costs of FMS, the minimum types of supports that
must be furnished to participants under either authority are the same. In particular:
Employer Authority
The minimum supports that must be furnished are:
•
•
•

Assist participants in verifying support worker citizenship status;
Collect and processes timesheets of support workers; and,
Process payroll, withholding, filing and payment of applicable federal, state and local
employment-related taxes and insurance.

Budget Authority
• Maintain a separate account for each participant’s budget.
• Track and report disbursements and balances of participant funds.
• Process and pay invoices for goods and services approved in the service plan.
• Provide participant with periodic reports of expenditures and the status of the participant –
directed budget.
When these supports are provided as a waiver service, the specification of FMS in Appendix
C-3 must include the foregoing supports, depending on the participant direction opportunities
available under the waiver. The service specification also must meet all other requirements
associated with service coverage (e.g., freedom of choice of provider).
Criteria Specific to Administrative Claiming
When FMS are furnished as an administrative activity, the following specific review criteria
apply:
•
•
•
•

•
•
•

The types of entities that furnish FMS are specified.
The method of procuring FMS services is specified and comports with the applicable
regulations at 45 CFR § 92.42.
The method of compensating FMS entities is specified.
The scope of the supports the FMS entities provide is specified. When supports over and
above those listed are included, the activities are necessary for the proper and efficient
administration of the waiver.
The method and frequency of assessing the performance of the FMS entities are specified.
The entities responsible for assessing performance are specified.
The CMS waiver analyst should advise the financial staff that the state has indicated that it
is using administrative claiming. This applies to all Medicaid administrative claiming
activities specified (for example, case management, financial management services and
supports broker). Medicaid administrative claiming must be in accordance with the
approved cost allocation plan. Cost allocation plans are not reviewed or approved under
the 1915(c)-waiver process.

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Information and Assistance in Support of Participant Direction: Overview
In addition to financial management services, participants must have access to information and
assistance to support their direction of services. The waiver must provide that these supports are
available to participants; however, in general, participants may elect whether to avail themselves
of these supports and may determine the extent of the support that they require (within any limits
established by the state). The supports that must be available to a participant also depend on the
extent of decision making authority that the participant elects to exercise. For example, if a
participant decides to exercise the Budget Authority but not Employer Authority, only supports
associated with the Budget Authority would pertain to the participant.
The type of information and assistance supports for participant direction that must be made
available hinges on the waiver’s participant direction opportunities and how these opportunities
have been further defined in Appendix E-2. For example, if the waiver provides only for the
Employer Authority opportunity, the types of supports that must be available will be less extensive
than when both opportunities are offered.
In general, information and assistance should be available to support participants in exercising
each of the specific decision making authorities that are specified for the Employer Authority
(Appendix E-2, Item E-2-a-ii) and/or the Budget Authority (Appendix E-2, Item E-2-b-i). For
example, if the participant has the authority to supervise staff, then support must be available to
assist the participant in exercising this authority (by, for example, making information or training
available concerning worker supervision). Other supports also may be furnished, including
supporting the participant during the service plan development process.
As is the case with FMS, federal financial participation in the costs of information and assistance
in support of participant direction may be claimed as a waiver service or as an administrative
activity. Item E-1-j is structured to identify the payment authority or authorities that are used to
underwrite the costs of these supports as well as specify the types of supports that are furnished.
Item E-1-j: Information and Assistance in Support of Participant Direction
Instructions

Select the payment authority or authorities under which information and assistance in support of
participant direction are furnished. Where required, provide the additional information that is
specified.
Technical Guidance

Information and assistance in support of participant direction may be underwritten in three ways.
More than one payment authority may be used to furnish these supports:
Case Management Activity. Information and assistance supports may be furnished as an
element of waiver case management. When case management is covered as a waiver service, its
service specifications in Appendix C-3 should specify the supports that case managers furnish to
participants who direct their services.
When the case management payment authority is employed to underwrite information and
assistance supports, specify in detail the supports that are provided with respect to each
--participant direction opportunity under the waiver. When these supports are furnished as
part of the provision of waiver case management services, it is sufficient to limit this
description to a reference to the case management service specifications contained in
Appendix C-3 so long as those specifications clearly delineate the supports that are furnished.

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When case management is provided under another authority, provide a complete description
of the supports that are provided.
Waiver Service Coverage. Information and assistance in support of participant direction may
be offered as one or more distinct waiver services. These service or services must be specified
in Appendix C-3, including the scope of supports that are furnished and provider qualifications.
Some states have covered these supports as “support broker,” “supports brokerage,” or
personal agent services. When these supports are covered as a waiver service, the participant
has free choice from among all willing and qualified providers of these supports and the state
must provide for the enrollment of all qualified providers. In addition, federal financial
participation in the costs of these supports is available at the state’s FMAP rate. When
information and assistance supports are covered as distinct waiver services, enter the title or
titles of the services. Especially with respect to the Employer Authority opportunity, such
supports may be furnished as part of financial management services. If this is the case and
financial management services also are a waiver service, specify that FMS is a source of these
supports.

•

When information and assistance supports are covered as a waiver service, they generally may
not be combined with financial management services when both are furnished as waiver
services. Usually, both types of support must be covered as distinct services. The main
exception is that Employer Authority-related supports may be included as part of the scope of
Financial Management Services. When information and assistance supports are covered as a
service distinct from FMS as a waiver service, FMS providers may furnish information and
assistance supports when they meet applicable qualifications. However, participants may not
be required to receive both FMS and information and assistance supports from the same waiver
service provider.
•

Administrative Activity. Information and assistance supports also may be furnished as a
Medicaid administrative activity, furnished either by Medicaid agency personnel or by one or
more contracted entities. Select this choice when these supports are furnished as an
administrative activity. The considerations in using the administrative payment authority
rather than a service payment authority to underwrite the costs of these supports are much the
same as those that apply to financial management services If furnished as Medicaid
administrative activity, it must be done in accordance with the approved cost allocation plan.
Cost allocation plans are not approved via the HCBS Waiver application.

When information and assistance supports are furnished as an administrative activity, specify
the types of entities that furnish these supports, how the supports are procured and
compensated; describe in detail the supports that are furnished in conjunction with each
participant direction opportunity under the waiver; and, the responsible entity (or entities),
methods and frequency of assessing the performance of entities that furnish these supports.
As noted above, the waiver may use more than one payment authority to underwrite the provision
of information and assistance supports. For example, some supports might be furnished as part of
waiver case management and other supports as a distinct waiver service. When more than one
payment authority is used, the state must have controls in place to ensure that duplicate claims for
federal financial participation are not made for supports that are furnished to waiver participants.

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CMS Review Criteria
Sufficiency of Supports
The scope of information and assistance in support of participant direction must align with the
range of participant decision-making authorities specified in Appendix E-2. This requirement
may be met by employing one or more payment authorities. Consequently, the relevant service
specifications in Appendix C-3 and the response to this item may have to be reviewed in tandem
to ascertain whether the overall scope of supports is sufficient.
Criteria Specific to the Provision of Supports as Case Management Activity
•
•

When information and assistance supports are furnished as part of waiver case management
services, the case management service specification identifies the supports.
When information and assistance supports are furnished as part of TCM services, the
supports are detailed by participant direction opportunity. The nature of the supports is
consistent with the statutory scope of TCM and the coverage of TCM contained in the state
plan.

Criteria Related to Provision of Information and Assistance Supports as an Administrative Activity
•
•
•
•
•
•
•
•

The types of entities that furnish information and assistance supports are specified.
The method of procuring information and assistance supports is specified and comports
with applicable regulations at 45 CFR § 92.42.
The method of compensating entities for furnishing information and assistance is specified;
The scope of information and assistance supports is specified by type of participant
direction opportunity.
The supports are necessary for the proper and efficient administration of the waiver.
The method and frequency of assessing the performance of entities that furnish information
and assistance are specified.
The entity (or entities) responsible for assessing performance is specified.
The CMS waiver analyst should advise the financial staff that the state has indicated that it
is using administrative claiming. This applies to all Medicaid administrative claiming
activities specified (for example, case management, financial management services and
supports broker). Medicaid administrative claiming must be in accordance with the
approved cost allocation plan. Cost allocation plans are not reviewed or approved under
the 1915(c) waiver process.

Item E-1-k: Independent Advocacy
Instructions

Select whether independent advocacy is available to participants who direct their services. If such
advocacy is available, describe the nature of such advocacy and how participants may access this
support.
Technical Guidance

Independent advocacy is advocacy that is furnished on behalf of a participant by an individual or
organization that does not provide other direct services (under either the waiver or the state plan)
to the participant, perform assessments, or conduct waiver monitoring, oversight or fiscal functions
that have a direct impact on a participant. Independent advocacy is person-specific advocacy
rather than advocacy that is performed on behalf of a group of individuals collectively. When
independent advocacy is available, participants have a source of neutral assistance available to
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them to address problems that may arise with respect to any aspect of their waiver services,
including participant direction. A state may contract for independent advocacy or enter into
agreements with individuals or organizations to furnish this advocacy as needed.
While arranging for access to independent advocacy is encouraged for all waivers, it is not a
general waiver approval requirement. When independent advocacy is available, describe its nature
(including the types of individuals and/or entities that furnish the advocacy) and how participants
may access such advocacy (e.g., by providing information to participants about how to contact
organizations that have agreed to provide such advocacy and the types of problems/issues for
which such organizations provide assistance). This function may be conducted through an
alternate dispute resolution system as specified in Appendix F-2 (if applicable) or a
grievance/complaint system specified in Appendix F-3 (if applicable) provided that the system is
independent
•

Blank

Item E-1-l: Voluntary Termination of Participant Direction
Instructions

In the text field, describe how the state accommodates a participant who voluntarily terminates
participant direction in order to receive services through an alternate service delivery method,
including how the state assures continuity of services and participant health and welfare during the
transition from participant direction to the alternative service delivery method.
Technical Guidance

Participants who elect to direct some or all of their services may decide to switch to providermanaged services instead. When a waiver includes participant direction, a state should establish
policies and procedures to accommodate this choice, including processes that ensure the continuity
of the participant’s services and assure the participant’s health and welfare during the transition
period. Such policies and procedures are important participant safeguards. Transition may be
accommodated by timely revision of the service plan and quickly linking the participant with
alternate waiver providers so that there is no break in the delivery of vital services.
When a waiver program targets only individuals who want to direct their services, describe how
individuals who decide to terminate participant direction will be accommodated (e.g., by providing
for their timely transition to another waiver for which they are eligible or by arranging for alternate
services). In this instance, provision may be made for the use of provider-managed services during
the transition period.
CMS Review Criteria
The waiver describes how:
• The choice to voluntarily terminate participant direction and receive provider-managed
alternative services is accommodated.
• Service continuity is ensured and participant health and welfare is assured during the
transition period.

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Item E-1-m: Involuntary Termination of Participant Direction
Instructions

In the text field, specify the circumstances under which the state will involuntarily terminate the
use of participant direction and require the participant to receive provider-managed services
instead, including how continuity of services and participant health and welfare is assured during
the transition.
Technical Guidance

The waiver may provide for the involuntary termination of participant direction of services.
Involuntary termination may be necessary when the participant does not carry out his/her
responsibilities under participant direction. Involuntary termination of participant direction also
may be necessary in order to assure the participant’s health and welfare. The provision of
additional supports may prevent involuntary termination of participant direction. Involuntary
termination of participant direction is not a basis for terminating the person from the waiver except
when a waiver targets only individuals who elect to direct their services. When termination from
the waiver is necessary, the person must be informed of the opportunity to request a Fair Hearing
in accordance with the procedures specified in Appendix F-1.
In this item, specify in detail the circumstances (if any) when participant direction will be
involuntarily terminated and process for transitioning the person to provider-managed services
(e.g., by revising the service plan). Also specify the steps that are taken to ensure continuity of
services that are vital to the participant’s well-being and assure the participant’s health and welfare
during the transition period.
If the waiver targets only persons who elect to self-direct, then provision should be made to
transition the person to another waiver for which the person is eligible or by arranging for
alternate services. In this instance, provision may be made for the use of provider-managed
services during the transition period.
CMS Review Criteria
When participant direction is terminated involuntarily, the waiver specifies:
•
•

The circumstances under which participant direction is terminated.
The safeguards that ensure continuity of services and assure participant health and welfare
during the transition period.

Item E-1-n: Goals for Participant-Direction
Instructions

In Table E-1-n, specify the state’s goal for the unduplicated number of waiver participants who are
expected to avail themselves of the waiver’s participant direction opportunities. In the case of a
new waiver, numeric goals should be provided for Years 1-3, or Years 1-5 if applicable, that the
waiver is in effect. In the case of a renewal, a goal for each of the five years that the waiver will
be in effect should be provided.
Technical Guidance

The information that is provided in this table will aid CMS in understanding the expected extent
of the use of the waiver’s participant direction opportunities. The use of the term “goal” is
intentional – it recognizes that the use of participant direction opportunities depends on many
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factors, including primarily the choices that are made by waiver participants themselves. Over the
duration of the waiver, the goal may be over or underachieved. The goals that a state establishes
are not to be interpreted as a limit on how many individuals may elect to direct their services
(except in the case of waivers that only serve participants who want to self-direct). Approval of
the waiver is not contingent on a minimum number of waiver participants electing to direct their
services.
The “Employer Authority Only” column is used when the waiver provides only for the Employer
Authority. The second column is used when a waiver provides for only the Budget Authority or
the combination of the Budget Authority and the Employer Authority. If the waiver provides
only for the Budget Authority, enter the number of participants who are expected to use that
authority. When a waiver provides for both authorities, enter the number of participants who are
expected to use one or both authorities.

Appendix E-2: Opportunities for Participant
Direction

Overview of Topics Addressed in Appendix E-2

Appendix E-2 specifies the dimensions of the Employer Authority and Budget Authority opportunities for
participant direction in the waiver. Item E-2-a is completed when the waiver offers the Employer Authority
opportunity. Item E-2-b is completed when the waiver offers the Budget Authority opportunity.

Detailed Instructions for Completing Appendix E-2
Item E-2-a: Participant – Employer Authority

Instructions
This item must be completed whenever the waiver offers the Employer Authority participant direction
opportunity, as indicated in Appendix E-1, Item E-1-b.

Item E-2-a-i: Participant Employer Status
Instructions
Select the Co-Employer or Common Law Employer choice or both.
Technical Guidance

There are two ways in which to position the participant to direct staff who provide supports to the
participant:
• Co-Employment. Under this approach, the participant is supported by an agency that
functions as the common law employer of workers recruited by the participant. The participant
directs the workers and is considered their co-employer (a.k.a., “managing employer”). This
approach is sometimes termed the “Agency with Choice FMS model.” The Agency with
Choice FMS provider conducts all necessary payroll functions and is legally responsible for
discharging the employment-related functions and duties for participant-selected workers with
the participant based on the roles and responsibilities identified for the two co-employers. The
agency performs financial management services tasks that are related to the Employer
Authority. Under this option, the Agency with Choice provider must hold a provider agreement
with the state in order to submit billings and receive payments for the waiver services furnished
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by participant-selected workers or enter into an administrative services agreement/contract to
function as a limited fiscal agent. An Agency with Choice FMS provider may function solely
to support participant employment of workers or it may provide other employer-related
supports to the participant, including providing traditional agency-based support workers.
When the Agency with Choice FMS option is selected, specify the types of agencies that
support co-employment, the standards and qualifications that the state requires of such entities,
and the safeguards in place to ensure that individuals maintain control and oversight of the
employee.
Common Law Employer. Under this approach, the participant is considered the legally
responsible employer (common law employer) of workers whom he or she (or his or her
representative) hires, supervises and discharges directly. The participant or his or her
representative is liable for the performance of necessary employment-related tasks and uses a
Government or Vendor Fiscal/Employer Agent. When this approach is used, a financial
management services entity is engaged to support the participant by performing necessary
payroll and other employment related functions as the participant’s agent in order to ensure
that employer-related legal obligations are fulfilled. This entity must be an IRS-approved
Fiscal/Employer Agent.
Indicate which of these approaches are used in the waiver. A waiver may use both approaches.
•

CMS Review Criteria
•

When the co-employer option is selected, the types of agencies that serve as co-employers
are specified as Agency with Choice FMS.

•

The state has mechanisms in place to ensure that individuals maintain authority and control
over employees when opting for a co-employer arrangement, and that the agency with
choice service delivery model truly reflects the key elements of self-direction.

Item E-2-a-ii. Participant Decision Making Authority
Instructions

Indicate how the participant exercises decision making authority over workers by checking off the
employment-related functions that the participant may perform under the Employer Authority in
the list provided (additional functions may be indicated in text box associated with the “other”
selection).
Technical Guidance

The employer functions listed are generally self-explanatory. The selection of an employer-related
function means that the participant may conduct the function. The waiver may provide that the
performance of any of the selected functions is a matter of participant choice.
Four of the listed functions warrant additional discussion:
•

Criminal History and/or Background Checks. A state’s policies concerning the performance
of criminal history and/or background checks are described in Appendix C-2, Item C-2-a.
When the participant is the common law employer, responsibility for conducting necessary
background checks devolves to the participant whenever a participant-selected worker is
subject to such a check under state law. However, a FMS or other entity may arrange for the
background check on behalf of the participant. Under the Agency with Choice model, the
agency is generally responsible for conducting necessary background checks. In either case,
when workers are subject to mandatory background checks, this item should be checked. When

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participant-selected workers are not subject to such mandatory checks, the participant may
request that such checks be conducted.
The costs of conducting criminal history and/or
background checks may be compensated as part of the payment to a financial management
services entity. In general, when such checks are mandated under state law, the costs of
conducting these checks should not be deducted from the participant-directed budget unless the
cost is incorporated into the budget. Describe how the costs of criminal history and/or
background checks are compensated.
•

Additional Staff Qualifications. In Appendix C-3, the provider qualifications for each service
are specified. These qualifications are controlling – that is, providers must meet these
qualifications regardless of whether a service is provider-managed or participant-directed.
However, the waiver may provide that the participant may establish additional staff
qualifications based on her/his needs and preferences. For example, if a participant is hearingimpaired, the participant may specify that workers must be able to sign. So long as the
additional participant-specified qualifications do not contravene the qualifications set forth in
Appendix C-3, they are permissible. See the instructions for Appendix C-3 for a discussion of
policies concerning staff qualifications.

•

Staff Duties. Under the Employer Authority, the participant – like any employer – exercises
authority over workers by specifying their duties – i.e., the specific tasks that the worker will
perform on behalf of the participant. These duties must fall within the scope of the pertinent
service specifications contained in Appendix C-3. For example, the participant may determine
the specific tasks that a personal assistant will perform. These tasks must fall within the scope
of personal assistance services as specified in Appendix C-3 in order to be considered eligible
for Medicaid payment. Tasks that are outside the scope of a service’s specifications may not
be billed to Medicaid.

Staff Compensation. The waiver may provide that the participant has the authority to
determine worker wages and benefits. In general, making provision for participant-determined
wages and benefits implies that the participant also has Budget Authority. When this selection
is made, the waiver may make participant decisions regarding worker wages and benefits
subject to applicable state policies. For example, a state may establish a maximum hourly
compensation amount but permit participants to negotiate hourly compensation rates that are
lower than the maximum. Also, a state may provide that participant-determined worker wages
comport with applicable federal and state wage laws. When this selection is not made, worker
wages and benefits are subject to the rates that the state establishes for each service.
The selections that are made for this item have important implications for the range of supports
that the waiver makes available to participants who exercise Employer Authority. In general, the
waiver must make support available to participants for each employer-related function that a
participant may perform. This support may take the form of financial management services and/or
information and assistance in support of participant direction.
•

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CMS Review Criteria
In order for the waiver to be considered to offer Employer Authority to participants, the
participant must have the authority to conduct the following functions at a minimum:
•
•
•
•
•
•
•
•

Recruit workers
Hire and discharge staff (common law employer)
Refer for hire and discharge from providing services (co-employer)
Specify staff qualifications including
method used to conduct background checks, if the method varies from the Appendix C-2aDetermine staff duties
Schedule staff
Supervise staff
Evaluate staff performance

Item E-2-b: Participant – Budget Authority

Instructions
This item must be completed whenever the waiver offers the Budget Authority participant direction
opportunity, as indicated in Appendix E-1, Item E-1-b.

Item E-2-b-i: Participant Decision Making Authority
Instructions

Indicate how the participant exercises control over a participant-directed budget by checking the
decision-making authorities that the participant may exercise under the Budget Authority in the
list provided (additional functions may be indicated in text box associated with the “other”
selection).
Technical Guidance

The selection of a budget control authority means that the participant may exercise decision
making over a wide range of service delivery elements. The waiver may provide that the exercise
of decision making authority for any particular element is a matter of participant choice. The
budget control authorities are generally self-explanatory. With respect to the participant’s
determining the amount paid for a service, specifying additional provider qualifications, or
specifying how services are provided, the considerations are parallel to those identified in the
foregoing instructions for the Employer Authority.
As is the case with the Employer Authority, the selections that are made for this item have
implications for the range of supports that the waiver makes available to participants who exercise
Budget Authority. In general, the waiver must make support available to participants for each
decision-making authority that a participant may exercise. This support may take the form of
financial management services and/or information and assistance in support of participant
direction.

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CMS Review Criteria
In order for the waiver to be considered to offer Budget Authority to participants, the participant
must at a minimum have the authority to:
• Determine the amount paid for each service in accordance with the state's policies
• Schedule when services are provided
• Identify service providers and refer for enrollment
• Review and approve provider invoices
Item E-2-b-ii: Participant-Directed Budget
Instructions

In the text field, describe in detail the method(s) that are used to establish the amount of the
participant-directed budget for waiver goods and services over which the participant has authority,
including how the method makes use of reliable cost estimating information and is applied
consistently to each participant. Information about these method(s) must be made publicly
available.
Technical Guidance

The exercise of Budget Authority requires that the participant have a budget in hand to manage.
The participant-directed budget (sometimes termed the individual budget) may encompass all the
services included in a participant’s service plan or only include the services that may be
participant-directed (as provided in Appendix C-3) and that the participant decides to direct. In
the case of the latter, services that fall outside the participant-directed budget are controlled by the
authorizations in the service plan. The description of the budget methodology should clearly spell
out the scope of the participant-directed budget.
The amount of the participant-directed budget may be determined in a variety of ways. For
example, if prospective budget amounts are uniquely assigned to each participant or by level of
support as provided in Appendix C-4, then the participant-directed budget may be based on the
methods that are used to determine those budget amounts. Alternatively, the amount of the
individual budget may be based on the amounts that are authorized in the service plan for the
services that the participant has elected to direct. Other methods can be employed so long as they
are based on reliable cost-estimating methodology that is described in detail. Whatever method is
employed, the waiver must describe how it is applied consistently to each participant who elects
to direct a budget. In addition, the waiver must provide that information about how the budget
methodology is publicly available.

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CMS Review Criteria
The state has specified:
•
•

•
•
•

The basis of the method of determining participant-directed budget.
How the method is rooted in the participant’s service plan, the budget determination method
spelled out in Appendix C-4 (if applicable), or an alternative approach that is based on
reliable cost-estimating techniques.
When the method provides that the budget may vary based on additional factors, the factors
that are used and how they affect the budget.
How the method is applied consistently to each waiver participant.
How information about the budget methodology is made publicly available.

Item E-2-b-iii. Informing Participant of Budget Amount
Instructions

In the text field, describe the process by which the participant is informed of the amount of the
participant-directed budget and the procedures by which the participant may request an adjustment
in the budget amount.
Technical Guidance

The participant must be informed of the amount of his/her budget. This may be done during the
service plan development process or through an alternate means. This information should be
provided to the participant before the service plan is finalized. In addition, the waiver should
include procedures by which the participant may request an adjustment in the budget amount (e.g.,
by requesting a review of the service plan). The procedures should be described in this item,
including (if applicable) the policies that the state follows in considering an adjustment to the
budget. When the budget functions as a limit on the amount of waiver goods and services that a
participant may receive, the participant must be offered the opportunity to request a Fair Hearing
when the participant’s request for an adjustment to the budget is denied or the amount of the budget
is reduced.
CMS Review Criteria
The waiver describes:
• How the participant is informed of the budget amount before the service plan is finalized.
• How the waiver provides for procedures for the participant to request an adjustment in the
budget.
• How participants are afforded the opportunity to request a Fair Hearing when the
participant’s request for a budget adjustment is denied or the amount of the budget is
reduced.
Item E-2-b-iv. Participant Exercise of Budget Flexibility
Instructions

Select whether participants who exercise Budget Authority may modify the services included in
the participant-directed budget without advance approval of a change in the service plan.
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Technical Guidance

The waiver service plan is the official authorization for the provision of waiver services to a
participant. The service plan specifies the services that are furnished to the participant, including
their amount, frequency and duration. The Budget Authority gives the participant control over a
participant-directed budget. Such control implies the ability to reallocate funds among services.
However, the waiver service plan and the participant-directed budget must be kept in alignment.
This may be accomplished in one of two ways:
•

The waiver may permit participants to reallocate funds among services without a prior change
to the service plan so long as the reallocation of funds is documented in the service plan. If
the waiver follows this policy, specify how changes in the participant-directed budget are
documented, including updating the service plan. The waiver also may provide that, under
specified circumstances (e.g., the participant wants to make a major change in the distribution
of funds), a change in the budget is subject to prior review before it takes effect. If so, specify
the circumstances when a budget change is subject to prior review.

•

Alternatively, the waiver may provide that all changes in the participant budget must be
preceded by a change in the service plan. In this instance, the waiver’s procedures for updating
or modifying the service plan are followed.

Budget flexibility may not be employed to permit the purchase of waiver goods and services that
have not been authorized in the service plan. When a participant wishes to purchase waiver goods
and services that are not included in the service plan, the service plan must be modified to include
the desired goods and services, as specified within the waiver’s parameters.
CMS Review Criteria
When the waiver provides that participants have the authority and flexibility to modify the
distribution of funds in the participant-directed budget without prior change to the service plan,
the waiver specifies:
• How the changes to the budget and service plan are documented.
• If applicable, the circumstances when changes are subject to prior review and the entity
responsible for conducting this review
Item E-2-b-v: Expenditure Safeguards
Instructions

In the text field, describe the safeguards that are in effect for the timely prevention of the premature
depletion of the participant-directed budget or to address potential service delivery problems that
may be associated with budget underutilization and the entity (or entities) responsible for
implementing these safeguards
Technical Guidance

The waiver must provide safeguards to prevent the premature depletion of the participant-directed
budget. Similarly, there should be safeguards to identify potential service delivery problems that
might be associated with budget underutilization (e.g., the participant is unable to arrange for
waiver services). These safeguards may take various forms, including the monitoring of
expenditures by a case manager or support broker; requiring the FMS entity to flag significant
budget variances (over and under expenditures) and bring them to the attention of the participant,

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case manager or support broker; and, allocating the budget on a monthly or quarterly basis. The
safeguards should be designed so that budget problems are identified on a timely basis so that
corrective action may be taken, if necessary.
CMS Review Criteria
The waiver describes:
•
•
•
•

Safeguards to prevent the premature depletion of the participant budget or address potential
service delivery problems that may be associated with budget underutilization.
Identifies the entity (or entities) responsible for ensuring the implementation of safeguards.
How the safeguards ensure that potential budget problems are identified on a timely basis.
Safeguards that include flagging potential budget over expenditures or budget
underutilization.

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Appendix F: Participant Rights

Brief Overview

Appendix F addresses the following:
•
•
•

How participants are afforded the opportunity to request a Fair Hearing (Appendix F-1);
Whether there is an alternate dispute resolution process available to participants to appeal
decisions that adversely affect their services (Appendix F-2); and,
The system (if any) that is available to participants to register grievances and complaints
about their services (Appendix F-3)

Appendix F-1: Opportunity to Request a Fair
Hearing

Detailed Instructions for Completing Appendix F-1

Process for Offering Opportunity to Request a Fair Hearing
Instructions

In the text field, describe the policy and procedures under the waiver for informing individuals of
the opportunity to request a Fair Hearing under the provisions of 42 CFR 431, Subpart E. The
description must include how, when and by whom individuals are informed of Fair Hearing
procedures during entrance to the waiver. Procedures for notifying individuals of the opportunity
to request a Fair Hearing must encompass the following adverse actions: (a) not providing an
individual the choice of home and community-based services as an alternative to institutional care;
(b) denying an individual the service(s) of their choice or the provider(s) of their choice; and, (c)
actions to deny, suspend, reduce or terminate services. Include in the description how notice of an
adverse action is given to individuals (e.g., by written notice only or verbally along with formal
written notice). Specify the entity or entities responsible for notifying individuals and the extent
of assistance that is provided to individuals affected by an adverse action to request a Fair Hearing.
Also specify where documentation concerning Fair Hearing notification is maintained and include
references to the notice forms that are employed. As appropriate, include in the description
references to applicable state laws, regulations and policies.
Technical Guidance

The opportunity to request a Fair Hearing is a fundamental protection that is afforded Medicaid
beneficiaries under the provisions of §1902(a)(3) of the Act. Federal Fair Hearing regulations are
located in 42 CFR §431, Subpart E (included in Attachment C to the Instructions) and are further
detailed in Section 2900 of the State Medicaid Manual (also included in Attachment D). Medicaid
Fair Hearing requirements apply to HCBS waivers. Individuals must be afforded the opportunity
to request a Fair Hearing in all instances when they: (a) are denied the service(s) of their choice or
the provider(s) of their choice; and/or, (b) their services are denied, suspended, reduced, or
terminated.

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Individuals must be informed in writing of the procedures for requesting a Fair Hearing as part of
the waiver entrance process. If entrance to the waiver is denied, the person must be given formal
written notice of the denial and information about how to request a Fair Hearing to appeal the
denial of entrance to the waiver. In order to ensure that the participant is fully informed of their
right to Fair Hearing, it may be appropriate and even necessary to supplement the written
information with a verbal explanation of the Right to Fair Hearing.
Whenever an action is taken that adversely affects a waiver participant post-enrollment (e.g.,
services are denied, reduced or terminated), the participant must be notified of the action in writing
on a timely basis in advance of the effective date of the action in accordance with 42 CFR
§431.211. In accordance with 42 CFR §431.210, the notice must include information about how
the participant may appeal the action by requesting a Fair Hearing. Services may not be terminated
or reduced pending hearing, except as permitted under 42 CFR §431.230. Copies of notices must
be maintained in the person’s record. It is up to the participant to decide whether to request a Fair
Hearing.
Ultimate responsibility for compliance with Fair Hearing requirements is vested with the Medicaid
agency. However, the Medicaid agency may elect to delegate aspects of the Fair Hearing process
to the operating agency as provided in 42 CFR §431.10. This is often the case when waiver
administration is delegated to counties or local authorities. For example, a state may offer
beneficiaries the option of first pursuing an evidentiary hearing at the local level. In the event the
outcome of that hearing is not satisfactory to the participant, the participant must be afforded the
opportunity to pursue the Fair Hearing process at the state level. The participant cannot be required
to pursue evidentiary hearing at the local level before requesting a Fair Hearing.
Concurrent Managed Care/§1915(c) Waiver. When a HCBS waiver operates concurrently with
a concurrent Medicaid managed care authority, access to the Fair Hearing process may be affected
by whether the state has provided that individuals must first avail themselves of the internal
grievance process that an MCO or PIHP must operate. Indicate in the response to the item if this
is the case and include a reference to the appropriate section of the managed care authority
application.

CMS Review Criteria
• The description must specify how individuals are informed about the Fair Hearing process
during entrance to the waiver, including how, when and by whom this information is
provided to individuals to ensure that the participant is knowledgeable about their right to
fair hearing.
• The description must address all instances when notice must be made to an individual of
an adverse action: choice of provider or service; and denial, reduction, suspension or
termination of service. The description must specify: (a) how notice is made; (b) the entity
or entities responsible for issuing the notice; and, (c) the assistance (if any) that is provided
to individuals in pursuing a Fair Hearing.
• The description must specify how the participant is informed that services will continue
during the period while the participant’s appeal is under consideration unless the state is
not required to continue the services in accordance with 42 CFR §431.230
• The description must specify where notices of adverse actions and the opportunity to
request a Fair Hearing are kept.

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Appendix F-2: Additional Dispute Resolution
Process

Overview

Many states operate an additional dispute resolution process in addition to the Fair Hearing
process. This is permissible so long as an individual is not required to use this process as a prerequisite to accessing the Medicaid Fair Hearing process or the process operates in lieu of the Fair
Hearing process. To be acceptable, the mechanism must preserve the individual’s right to pursue
a Fair Hearing. In this Appendix, indicate whether there is an additional dispute resolution process
available to individuals and, if so, provide information about the process.
This item only applies to dispute resolution processes operated by a state agency. In some cases,
dispute resolution processes are entirely local or provider-based. In these cases, it is required that
participants be informed that the right to a Medicaid Fair Hearing is preserved when they elect to
make use of the process.

Detailed Instructions for Completing Appendix F-2
Item F-2-a: Availability of Additional Dispute Resolution Process
Instructions

Select whether there is an additional dispute resolution process. If “yes” is selected, complete Item
F-2-b. If “no,” do not complete Item F-2-b
Technical Guidance

§1915(c) Waivers. Select the “yes” response only if the additional dispute resolution process
operates under the aegis of a state agency (e.g., a state agency operates the process or the process
includes provision for referring disputes from the local level to the state for resolution). Do not
select “yes” if additional dispute resolution processes are entirely local or provider-based. Also,
do not select “yes” if the additional dispute resolution process only involves offering a person the
opportunity for a local evidentiary hearing under the Fair Hearing process. Offering such hearings
should be addressed in Item F-1-b instead.
Managed Care/1915(c) Concurrent Waivers. Select “yes” when the state contracts with
Managed Care Organizations (MCOs) or Prepaid Inpatient Hospital Plans (PIHPs) for the
provision of waiver services to reflect the requirement that such entities have an internal grievance
system as required by 42 CFR §438 Subpart H. Also, select “yes” when the state contracts with
Prepaid Ambulatory Health Plans (PAHPs) for the provision of waiver services and the state elects
to operate an optional PAHP grievance procedure as specified in the managed care authority
application.

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Item F-2-b: Description of Additional Dispute Resolution Process
Instructions

Describe the additional dispute resolution process, including: (a) the state agency that operates the
process; (b) the nature of the process (i.e., procedures and timeframes), including the types of
disputes addressed through the process; and, (c) how the right to a Medicaid Fair Hearing is
preserved when a participant elects to make use of the process. State laws, regulations, and policies
referenced in the description must be available to CMS upon request through the Medicaid agency
or the operating agency (if applicable).
In the case of managed care/§1915(c) concurrent waivers that includes an internal grievance
system or optional grievance procedure, the description may simply reference the Medicaid
managed care authority application.
Technical Guidance

The operation of an additional dispute resolution process over and above the Fair Hearing process
is not a federal requirement except in the case of certain managed care service delivery models.
This item is included in the application in order to provide a complete picture of the procedural
protections afforded to waiver participants. From a Medicaid perspective, the operation of an
additional dispute resolution process must not impede in any way a person’s opportunity to request
a Fair Hearing.
CMS Review Criteria
When there is an additional dispute resolution process:
• The state agency that operates the dispute mechanism is identified.
• The state describes the types of disputes that can be addressed, including the process and
timelines.
• When a participant elects to make use of the dispute mechanism, the participant is
informed that the dispute resolution mechanism is not a pre-requisite or substitute for a
Fair Hearing.

Appendix F-3: State Grievance/Complaint
System

Overview

States often operate grievance and complaint systems that afford waiver participants the
opportunity to identify and seek the resolution of problems and issues with the services that they
receive and/or accessing services that they have been authorized to receive. The operation of such
a system is not mandated under federal regulations. These systems typically address problems that
are outside the scope of the Fair Hearing process (e.g., issues with provider performance in
furnishing a waiver service). The operation of such a system may not in any fashion undermine
the opportunity of a participant to request a Fair Hearing to address problems that fall under the
scope of the Fair Hearing process. Sometimes these systems are multi-tiered (e.g., designed to
resolve a problem at the local level before the problem is referred to a state agency). In this Appendix,
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indicate whether there is a grievance and complaint system available to individuals and, if so, provide
information about the process.
This item only applies to a grievance/complaint system operated by a state agency. In some cases, there
are grievance/complaint systems that are entirely local or provider-based. When this is the case, participants
must be informed that the right to a Medicaid Fair Hearing is preserved when a participant elects to make
use of the process.

Detailed Instructions for Completing Appendix F-2
Item F-3-a: Operation of Grievance/Complaint System
Instructions

Select whether there is a grievance/complaint system that affords participants the opportunity to
register grievances or complaints concerning the provision of services under this waiver. When
there is such a system, complete the remaining two items. If there is not a system, do not complete
the remainder of Appendix F-3.
Technical Guidance

Only select “yes” when the grievance/complaint system is operated by the state (i.e., grievances
or complaints are registered directly with the state) or, if operated at the local or provider agency
level, the system provides for state involvement when the complaint or grievance cannot be
satisfactorily resolved at the local or provider level). Do not select the affirmative response if
grievance/complaint mechanisms are operated entirely locally or by providers with no direct
involvement by a state agency.
Item F-3-b: Operational Responsibility
Instructions

Specify the state agency that is responsible for the operation of the grievance/complaint system.
Technical Guidance

The agency that operates the grievance/complaint system may be the Medicaid agency, the
operating agency, or another state agency (e.g., a state ombudsman office). If more than one state
agency is involved in addressing complaints and grievances, specify each and, in the response to
the next item, distinguish the roles and responsibilities of these agencies in resolving grievances
and complaints.
Item F-3-c: Description of System
Instructions

Describe the grievance/complaint system, including (a) the types of grievances/complaints that
participants may register; (b) the process and timelines for addressing grievances/complaints; and,
(c) the mechanisms that are used to resolve grievances/complaints. When multiple entities are
involved in the system, identify the role that each plays. Also, specify how the system is structured
to preserve the participant’s opportunity to request a Fair Hearing. State laws, regulations, and
policies that are referenced in the description must be available when requested by CMS through
the Medicaid agency or the operating agency (if applicable).

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In the case of a managed care/1915(c) concurrent waiver that includes an internal grievance system
or optional grievance procedure, the description may simply reference the Medicaid managed care
application.
CMS Review Criteria
When there is a grievance/complaint system:
• The state agency that operates the grievance/complaint system is identified.
• The state describes the types of complaints that can be addressed, the process and
timelines.
• When a participant elects to file a grievance or make a complaint, the participant is
informed that doing so is not a pre-requisite or substitute for a Fair Hearing.

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Appendix G: Participant Safeguards

Brief Overview

Appendix G addresses the following safeguards to assure the health and welfare of waiver
participants:
•
•
•

Response to Critical Events or Incidents (Appendix G-1)
Safeguards Concerning Restraints and Restrictive Interventions (Appendix G-2)
Medication Management and Administration (Appendix G-3)

Appendix G-1 and Appendix G-2 Item C-2-c-ii apply to all waivers. Appendices G-2 (except for
Item C-2-c-ii) and G-3 may not apply to some waivers. See the instructions for these
Appendices for a discussion of their applicability.

Appendix G-1: Response to Critical Events
or Incidents

Overview

This appendix applies to all waiver programs. It focuses on the identification and follow-up to
critical events or incidents (e.g., abuse, neglect and exploitation) that bring harm, or create the
potential for harm, to a waiver participant. Effective incident management is essential to assuring
the health and welfare of waiver participants. In this appendix, the state describes the operational
features of managing incidents at the individual and provider level as well as its activities to assure
that reports are filed and incidents investigated in a timely fashion and to analyze incident data
(e.g., about specific types of incidents, providers, participant characteristics, results of
investigations, the timeliness of reports and investigations) in order to develop strategies to reduce
the risk and likelihood of the occurrence of incidents in the future.

Detailed Instructions for Completing Appendix G-1

Item G-1-a: Critical Event or Incident Reporting and Management Process.
Instructions

Indicate whether the state operates Critical Event or Incident Reporting and Management Process
that enables the state to collect information on sentinel events occurring in the waiver program
Item G-1-b: State Critical Event or Incident Reporting Requirements
Instructions

List and briefly define the types of critical events or incidents (including alleged abuse, neglect
and exploitation) that the state requires to be reported for review and follow-up action (e.g., a
follow-up investigation) by an appropriate authority (e.g., child or adult protective services). Also
identify the individuals and/or entities (e.g., waiver providers) that must report such events and
incidents and the reporting method or methods that are employed. Specify the time-frames for
reporting critical events and incidents. The response to this item may include citations of relevant

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state laws, regulations, and other published policies. Referenced documents must be available
through the Medicaid agency or the operating agency (if applicable) upon request by CMS.
Technical Guidance

This item focuses on critical events or incidents that the state itself deems as sufficiently serious
to warrant near-term review and follow-up by an appropriate authority. Such incidents may
include but are not limited to: (a) abuse and neglect as defined by the state; (b) the unauthorized
use of restraint, seclusion or restrictive interventions; (c) serious injuries that require medical
intervention and/or result in hospitalization; (d) criminal victimization; (e) death; (f) financial
exploitation; (g) medication errors; and, (h) other incidents or events that involve harm or risk of
harm to a participant. In general, the types of critical events and incidents that must be reported to
and monitored by an appropriate authority are specified in state law, regulations or policies. When
the waiver serves both children and adults, specify whether different reporting requirements apply
to children and adults, including who has responsibility to report critical events or incidents.

CMS Review Criteria
•
•

The state provides for the reporting and investigation of major and serious incidents
(abuse, neglect, and exploitation at a minimum).
The description includes:
 Definitions of the types of critical events or incidents that must be reported;
 Identification of the individuals/entities that must report critical events and incidents;
and,
 The timeframes within which critical events or incidents must be reported; and,
 The method of reporting (e.g., phone, written form, web-based reporting system)

Item G-1-c: Participant Training and Education
Instructions

Describe how training and/or information is provided to participants (and involved family or other
unpaid caregivers, as appropriate) concerning the state’s protections from abuse, neglect, and
exploitation, including how participants (or their informal caregivers) can notify appropriate
authorities or entities when the participant may have experienced abuse, neglect or exploitation.
Identify the entity or entities that are responsible for providing this training and/or information and
how frequently training and education are furnished.
Technical Guidance

This item focuses on how participants (and involved family or other unpaid caregivers, as
appropriate) are informed about abuse, neglect and exploitation protections. This might involve
formal training concerning whom to contact when the participant believes that she/he has
experienced abuse, neglect or exploitation. Alternatively, information about reporting might be
furnished verbally and/or in written form to the participant and other involved individuals. The
scope of the item does not include training/education that might be furnished to providers or direct
support workers about identifying and reporting abuse, neglect, and exploitation.

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CMS Review Criteria
The waiver describes:
• How training and/or information are furnished to participants or their informal caregivers
concerning protections from abuse, neglect and exploitation, including how to notify the
appropriate authorities.
• The entities responsible for providing training and/or information are specified.
• The frequency of providing training and/or information is specified.

Item G-1-d: Responsibility for Review of and Response to Critical Events or Incidents
Instructions

Identify the entity (or entities) to which reports are made of each type of critical event or incident
specified in Item G-1-a above. Describe the methods employed to evaluate critical incident reports
(e.g., determine that follow-up action is required), and the processes and time frames for
responding to critical events or incidents, including conducting investigations.
Technical Guidance

The purpose of this item is to describe how reports of critical events or incidents are reviewed and
how follow-up of reports is performed when warranted. The response must:
•

For each type of critical incident or event identified in Item G-1-a, specify the entity or
entities to which reports are submitted. Such entities might include the state’s adult protective
services agency, the child protective services agency, a licensing authority and/or a program
authority (e.g., the state developmental disabilities agency);

•

Identify the entity that is responsible for evaluating reports (e.g., making a determination that
follow-up is necessary) and how reports are evaluated (e.g., the criteria that are applied in
deciding whether follow-up action is warranted);

•

Identify the entity that is responsible for follow-up investigations and how investigations are
conducted (e.g., whether methods are determined based on severity according to a prescribed
protocol, accommodations that are made for participant interviews);

•

The timeframe for conducting and completing an investigation (i.e., how promptly an
investigation is initiated) and the time-frame for completing an investigation (e.g., within 48hours, 7-days, 30-days depending on severity and criticality); and,

The process and time frames for informing the participant (or the participant’s family or legal
representative as appropriate) and other relevant parties (e.g., the waiver provider, licensing
and regulatory authorities, the operating agency) of the investigation results.
The description may be structured in any appropriate manner so long as it addresses each of the
elements listed above.
•

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CMS Review Criteria
The waiver specifies:
•
•
•
•
•

The entity (or entities) that receives reports of each type of critical event or incident.
The entity that is responsible for evaluating reports and how reports are evaluated.
The entity that is responsible for conducting investigations and how investigations are
conducted.
The timeframes for conducting an investigation and completing an investigation.
The process and timeframes for informing the participant including the participant (or the
participant’s family or legal representative as appropriate) and other relevant parties (e.g.,
the waiver providers, licensing and regulatory authorities, the waiver operating agency)
of the investigation results.

Item G-1-e. Responsibility for Oversight of Critical Incidents and Events
Instructions

In the text field, identify the state agency (or agencies) responsible for overseeing the reporting of
and response to critical incidents or events, how this oversight is conducted and how frequently.
Technical Guidance

An effective incident management system entails conducting oversight to make sure that
applicable policies and procedures are being followed for the reporting of critical incidents or
events and that necessary follow-up is being conducted on a timely basis. A critical element of
effective oversight is the operation of data systems that support the identification of trends and
patterns in the occurrence of critical incidents or events in order to identify opportunities for
improvement and thus support the development of strategies to reduce the occurrence of incidents
in the future.
The response to this item must specify the following:
•

The state agency or agencies responsible for overseeing the operation of the incident
management system. When this responsibility is not carried out directly by the Medicaid
agency and/or the operating agency (if applicable), indicate how the information and findings
from oversight activities are communicated to the Medicaid agency and/or the operating
agency by the state agency (or agencies) responsible for oversight. Since addressing critical
incidents or events is an integral component of assuring the health and welfare of waiver
participants, it is critical that the Medicaid agency and/or the operating agency (if applicable)
play an active role in the oversight of the operation of the incident management system. For
example, if the state’s adult protective services (APS) agency has primary oversight
responsibility for incident management, there should be processes whereby the APS agency
regularly furnishes the Medicaid agency and/or operating agency with information about
critical incidents that involve waiver participants and that the agencies work together to
identify strategies to reduce the occurrence of critical incidents.

•

How oversight is conducted. System-wide oversight methods should include gathering
information about types of incidents, participant characteristics, providers, how quickly
reports are reviewed and investigated, how promptly follow-up takes place, the results of
investigations, and whether participants are informed of the investigation results. Oversight
includes using information to reduce the occurrence of incidents in the future. The response
should describe

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1) How information about critical incidents and events is collected and compiled so that
it can be analyzed to enable the identification of trends/patterns and the development
of quality improvement strategies to reduce future occurrence of critical incidents or
events. For example, reports may be filed by phone, in written form, or through the
use of information technology, each of which requires specific practices to collect,
compile and analyze the information.
2) How information from critical incident reports is used to identify issues within the
waiver population, specific providers at a system-wide level, and how that information
is used to develop strategies to reduce occurrences in the future.
3) The frequency of oversight activities.
CMS Review Criteria
The waiver specifies:
•
•
•
•

The state entity or entities responsible for overseeing the operation of the incident
management system.
When oversight is not performed by the Medicaid agency or the operating agency (if
applicable), the process for the oversight agency to communicate information and findings
to the Medicaid agency and/or operating agency.
The methods for overseeing the operation of the incident management system, including
how data are collected, compiled, and used to prevent re-occurrence.
The frequency of oversight activities.

Appendix G-2: Safeguards Concerning
Restraints and Restrictive Interventions

Overview

This Appendix concerns the use of restraints and/or restrictive interventions during provision of
waiver services. When either is permitted, the state must specify the safeguards that it has
established concerning their use and how the state ensures that such safeguards are followed.
Providing effective safeguards in the use of restraints and/or restrictive interventions is integral to
assuring the health and welfare of waiver participants. When restraints and/or restrictive
interventions are not permitted, the state must have a means to detect unauthorized use. The terms
used in this Appendix are defined in the Glossary.

Detailed Instructions for Completion of Appendix G-2
Item G-2-a: Use of Restraints
Instructions

Select one of the two main choices. If the state does not permit the use of restraints as part of the
provision of waiver services and/or their use is prohibited under state policy, select the first choice.
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Also, identify the state agency or agencies that are responsible for detecting the unauthorized use
of restraints and how oversight is performed to ensure that unauthorized use does not take place.
If the use of restraints by a paid caregiver is permitted during the course of providing waiver
services, including in the participant’s private residence, select the second choice and complete the
next two items. Use of restraints must comport with the home and community-based setting
requirements at Section 42 CFR 441.301(c)(4)(iii) and (vi)(F), and person-centered service
planning and plan requirements at 42 CFR 441.301(c)(1) and (c)(2).
Technical Guidance

For the purposes of this item, restraints include personal restraints (e.g., holds), drugs used as
restraints, and mechanical restraints. When a state prohibits the use of restraints during the delivery
of waiver services, it still must have processes that are designed to detect their unauthorized use.
Such processes may include regular monitoring of participant health and welfare, the performance
of periodic provider quality reviews, and an incident management system in which unauthorized
restraint is a reportable incident.
CMS Review Criteria
• When the first choice is selected, the response is consistent with the remainder of the
waiver application.
• When the first choice is selected, the state provides specific methods to detect
unauthorized use of restraints and specifies the state agency (or agencies) responsible for
conducting this oversight.
•

Use of restraints must comport with the home and community-based setting requirements
at Section 42 CFR 441.301(c)(4)(iii) and (vi)(F), and person-centered service planning
and plan requirements at 42 CFR 44.301(c)(1) and (c)(2).

Item G-2-a-i: Safeguards Concerning the Use of Restraints
Instructions

Specify the safeguards that have been established concerning the use of each type of restraint (i.e.,
personal restraints, drugs used as restraints, mechanical restraints). If state laws, regulations, and
policies are referenced in the response to this item, they must available upon request to CMS
through the Medicaid agency or the operating agency (if applicable).
Technical Guidance

When the use of restraints is permitted, identify the types of restraints (i.e., personal restraints,
drugs used as restraints, mechanical restraints) that are allowed and describe in detail the
safeguards that the state has established concerning the use of each type of restraint that is
permitted. If the use of specific types of restraint is explicitly prohibited in policy, identify the
restraints that are not allowed. For example, personal restraints may be permitted but the use of
mechanical restraints prohibited.
For each type of restraint that is allowed, the safeguards should address:
1) Requirements concerning the use of alternative strategies to avoid the use of restraints;
2) Methods for detecting the unauthorized use of or misapplication of restraints;

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3) The protocols that must be followed when restraints are employed (including the
circumstances when their use is permitted and when they are not) and how their use is
authorized;
4) The practices that must be employed in the administration of a restraint to ensure the health
and safety of individuals;
5) Required documentation (record keeping) concerning the use of restraints; and,
6) The education and training requirements that provider agency personnel must meet who
are involved in the administration of a restraint.
CMS Review Criteria
For each type of restraint permitted, the state has identified safeguards that address:
• The use of alternative methods to avoid the use of restraints;
• Methods for detecting the unauthorized use of restraints;
• The protocols that must be followed when restraints are employed (including the
circumstances when their use is permitted) and how their use is authorized;
• The practices that must be employed to ensure the health and safety of individuals;
• Required documentation concerning the use of restraints; and
• Education and training requirements that personnel who are involved in the administration
of restraints must meet.
Item G-2-a-ii: State Oversight Responsibility
Instructions

Specify the state agency (or agencies) responsible for overseeing the use of restraints and ensuring
that state safeguards concerning their use are followed. Describe how this oversight is conducted
and its frequency
Technical Guidance
•

•

Identify the state agency (or agencies) responsible for overseeing the use of restraints
and ensuring that state safeguards concerning their use are followed. When the Medicaid
agency or the operating agency (if applicable) does not conduct this oversight, describe how
the results of monitoring the use of restraints are regularly communicated to the agency that
operates the waiver. Since the use of restraints has potential implications for the health and
welfare of waiver participants, it is important that the agency that administers the waiver be
informed and aware of potential violations of state policies concerning the use of restraints in
order for them to undertake appropriate remedial and system improvement activities.
How oversight is conducted. Oversight methods include monitoring the use of restraints to
ensure that all applicable state requirements are followed and to detect unauthorized,
inappropriate/ineffective use or over use. Oversight methods should include gathering
information about frequency, length of time of each use and the duration of use over time as
well as the impact of restraints on the individual. Oversight also includes using information
to assure proper use and to reduce the use of restraints in the future. The response should
include
1) How information about restraints is collected and compiled so that it can be analyzed
to enable the identification of trends/patterns and the development of quality

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improvement strategies. For example, reports may be filed by phone, in written form,
or through the use of information technology, each of which requires specific practices
to collect and then compile and analyze the information
2) How information about the use of restraints is used to identify issues related to the
waiver populations, providers at the system-wide level and how that information is
used to develop strategies to ensure the proper use and achieve a reduction in the use
of restraints.
3) The frequency of oversight activities
CMS Review Criteria
The response specifies:
• The state agency (or agencies) responsible for overseeing the use of restraints and
ensuring that the state’s safeguards are followed.
• When oversight is not performed by the Medicaid agency or the operating agency (if
applicable), the process for the oversight agency to communicate information and findings
to the Medicaid agency and/or operating agency.
• Methods for detecting unauthorized use, over use or inappropriate/ineffective use of
restraints and ensuring that all applicable state requirements are followed.
• How data are analyzed to identify trends and patterns and support improvement strategies.
• The methods for overseeing the operation of the incident management system including
how data are collected, compiled, and used to prevent re-occurrence.
• The frequency of the oversight activities.
Item G-2-b: Use of Restrictive Interventions

Instructions

Select one of the two main choices. If the state does not permit the use of restrictive interventions
during the provision of waiver services and/or their use is prohibited under state policy, select the
first choice. Also, identify the state agency or agencies that are responsible for detecting the
unauthorized use of restrictive interventions and how oversight is performed to ensure that
unauthorized use does not take place. If the use of restrictive interventions by a paid provider is
permitted during the course of providing waiver services, including in the participant’s private
residence, select the second choice and complete the next two items. Use of restrictive
interventions must comport with the home and community-based setting requirements at Section
42 CFR 441.301(c)(4)(iii) and (vi)(F), and person-centered service planning and plan requirements
at 42 CFR 44.301(c)(1) and (c)(2).
Technical Guidance

Restrictive interventions limit an individual’s movement; a person’s access to other individuals,
locations or activities, or restrict participant rights. Restrictive interventions also include the use
of other aversive techniques (not including restraint or seclusion) that are designed to modify a
person’s behavior.
When a state prohibits the use of restrictive interventions during the delivery of waiver services, it
still must have specific processes that are designed to detect their unauthorized use.

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CMS Review Criteria
• The response is consistent with the remainder of the waiver application.
• When the first choice is selected, the state specifies methods to detect unauthorized use
of restrictive intervention, and the state agency (or agencies) responsible for conducting
this oversight.
•

Use of restrictive interventions must comport with the home and community-based setting
requirements at Section 42 CFR 441.301(c)(4)(iii) and (vi)(F), and person-centered
service planning and plan requirements at 42 CFR 44.301(c)(1) and (c)(2).

Item G-2-b-i: Safeguards Concerning the Use of Restrictive Interventions
Instructions

Specify the safeguards that the state has in effect concerning the use of interventions that restrict
participant movement, participant access to other individuals, locations or activities, restrict
participant rights or employ aversive methods (not including restraints or seclusion) to modify
behavior. State laws, regulations, and policies referenced in the specification must be available to
CMS upon request through the Medicaid agency or the operating agency.
Technical Guidance

The use of restrictive interventions has potential adverse ramifications for the health and welfare
of waiver participants. Consequently, when their use is permitted during the course of the
provision of waiver services, it is important that there be effective safeguards in place to ensure
that such interventions are only used when necessary and are carried out in a manner that avoids
harm to the waiver participant.
When the use of restrictive interventions is permitted during the course of the provision of waiver
services, identify the types of interventions that are allowed (including the circumstances under
which they are allowed) and the types of restrictive interventions that are specifically prohibited.
For example, a state may prohibit the use of aversive methods altogether. Do not include here
restraints or seclusion that already have been addressed in Item G-2-a and G-2-c.
Describe in detail the safeguards that have been established for each type of permitted restrictive
intervention. These safeguards should address:
1) First use of non-aversive methods (i.e., a requirement that aversive methods may only be
employed as a last resort);
2) Methods to detect the unauthorized use of restrictive interventions;
3) Protocols for authorizing the use of restrictive interventions, including treatment planning
requirements and review/reauthorization procedures (including, as applicable the use of
Human Rights Committees);
4) Required documentation (record keeping) when restrictive interventions are used; and,

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5) Required education and training of personnel involved in the authorization and
administration of restrictive interventions.

CMS Review Criteria
The response specifies:
•
•

•

The types of restrictive interventions that are permitted, the circumstances under which
they are allowed, and the types of restrictive interventions that are not allowed.
For each type of restrictive intervention that is permitted, the state’s safeguards address:
 First use of non-aversive methods;
 Methods to detect the unauthorized use of restrictive interventions;
 Protocols for authorizing the use of restrictive interventions, including treatment
planning requirements and review/reauthorization procedures;
 Required documentation when restrictive interventions are used; and
Required education and training of personnel involved in authorization and administration
of restrictive interventions.

Item G-2-b-ii: State Oversight Responsibility
Instructions

Specify the state agency (or agencies) responsible for monitoring and overseeing the use of
restrictive interventions, how this oversight is conducted, and its frequency. When the state does
not permit the use of restrictive interventions, the response to this item should focus on how the
state detects the unauthorized use of restrictive interventions.
Technical Guidance
•

Identify the state agency (or agencies) responsible for overseeing the use of restrictive
interventions and ensuring that state safeguards concerning their use are followed.
When this oversight is not carried out by the Medicaid agency or the operating agency (if
applicable), describe how the results of monitoring the use of restrictive interventions are
regularly communicated to the agency that operates the waiver. Since use of restrictive
interventions has potential implications for the health and welfare of waiver participants, it is
important that the agency that administers the waiver be aware of potential violations of state
policies concerning the use of restrictive interventions in order for them to undertake
appropriate remedial and system improvement activities..

•

How oversight is conducted. Oversight methods include monitoring the use of restrictive
interventions to ensure that all applicable state requirements are followed and detecting their
unauthorized, inappropriate/ineffective use or over use. Oversight methods should include
gathering information about frequency, length of time of each use and the duration of use over
time as well as the impact of restrictive interventions on the individual. Oversight also includes
using information to assure proper use and to reduce the use of restrictive interventions in the
future. The response should include;
1) How information about restrictive interventions is collected and compiled so that it can
be analyzed to enable the identification of trends/patterns and the development of

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quality improvement strategies . For example, reports may be filed by phone, in written
form, or through the use of information technology, each of which requires specific
practices to collect, compile and analyze the information.
2) How information about the use of restrictive interventions used to identify issues
related to the waiver populations, providers and at the system-wide level and how that
information is used to develop strategies to ensure the proper use and achieve a
reduction in the use of restrictive interventions in the future.
3) The frequency of oversight activities.
CMS Review Criteria
The waiver specifies:
• The state agency (or agencies) responsible for overseeing the use of restrictive procedures
and ensuring that the state’s safeguards are followed.
• When oversight is not performed by the Medicaid agency or the operating agency (if
applicable), the process for the oversight agency to communicate information and findings
to the Medicaid agency and/or operating agency.
• Methods for detecting unauthorized use, over use or inappropriate/ineffective use of
restrictive procedures and ensuring that all applicable state requirements are followed.
• How data are analyzed to identify trends and patterns and support improvement strategies.
• The methods for overseeing the operation of the incident management system including
how data are collected, compiled, and used to prevent re-occurrence.
• The frequency of oversight activities.
Item G-2-c: Use of Seclusion
Instructions

Select one of the two main choices. If the state does not permit the use of seclusion as part of the
provision of waiver services and/or their use is prohibited under state policy, select the first choice.
Also, identify the state agency or agencies that are responsible for detecting the unauthorized use
of seclusion and how oversight is performed to ensure that unauthorized use does not take place.
If the use of seclusion by a paid caregiver is permitted during the course of providing waiver
services, including in the participant’s private residence, select the second choice and complete the
next two items. Use of seclusion must comport with the home and community-based setting
requirements at Section 42 CFR 441.301(c)(4)(iii) and (vi)(F), and person-centered service
planning and plan requirements at 42 CFR 44.301(c)(1) and (c)(2).
Technical Guidance

For the purposes of this item, seclusion means involuntarily isolating an individual as a means of
controlling the person’s behavior. Seclusion is distinguished from “time out” which does not
involve preventing a person from leaving an area and which is considered to be a restrictive
intervention. Consult the Glossary for the definition of the terms used in this item.
When a state prohibits the use of seclusion during the delivery of waiver services, it still must have
processes that are designed to detect their unauthorized use. Such processes may include regular
monitoring of participant health and welfare, the performance of periodic provider quality reviews,
and an incident management system in which unauthorized seclusion is a reportable incident.

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CMS Review Criteria
• When the first choice is selected, the response is consistent with the remainder of the
waiver application.
• When the first choice is selected, the state provides specific methods to detect
unauthorized use of seclusion, and specifies the state agency (or agencies) responsible for
conducting this oversight.
•

Use of restrictive interventions must comport with the home and community-based setting
requirements at Section 42 CFR 441.301(c)(4)(iii) and (vi)(F), and person-centered
service planning and plan requirements at 42 CFR 44.301(c)(1) and (c)(2).

Item G-2-c-i: Safeguards Concerning the Use of Seclusion
Instructions
Specify the safeguards that have been established concerning the use of seclusion. If state laws,
regulations, and policies are referenced in the response to this item, they must available upon
request to CMS through the Medicaid agency or the operating agency (if applicable).
Technical Guidance
When the use of seclusion is permitted, describe in detail the safeguards that the state has
established concerning the use of seclusion that is permitted. The safeguards should address:
1) Requirements concerning the use of alternative strategies to avoid the use of seclusion;
2) Methods for detecting the unauthorized use of or misapplication of seclusion;
3) The protocols that must be followed when seclusion is employed (including the
circumstances when it is permitted and when it is not) and how its use is authorized;
4) The practices that must be employed in the administration of seclusion to ensure the
health and safety of individuals;
5) Required documentation (record keeping) concerning the use of seclusion; and,
6) The education and training requirements that provider agency personnel must meet who
are involved in the administration of seclusion.
CMS Review Criteria
For each type of seclusion permitted, the state has identified safeguards that address:
• The use of alternative methods to avoid the use of seclusion;
• Methods for detecting the unauthorized use of seclusion;
• The protocols that must be followed when seclusion is employed (including the
circumstances when its use is permitted) and how its use is authorized;
• The practices that must be employed to ensure the health and safety of individuals;
• Required documentation concerning the use of seclusion; and
• Education and training requirements that personnel who are involved in the administration
of seclusion must meet.

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Item G-2-c-ii: State Oversight Responsibility
Instructions
Specify the state agency (or agencies) responsible for overseeing the use of seclusion and ensuring
that state safeguards concerning its use is followed. Describe how this oversight is conducted and
its frequency.
Technical Guidance
•

•

Identify the state agency (or agencies) responsible for overseeing the use of seclusion and
ensuring that state safeguards concerning its use is followed. When the Medicaid agency
or the operating agency (if applicable) does not conduct this oversight, describe how the
results of monitoring the use of seclusion are regularly communicated to the agency that
operates the waiver. Since the use of seclusion has potential implications for the health and
welfare of waiver participants, it is important that the agency that administers the waiver be
informed and aware of potential violations of state policies concerning the use of seclusion in
order for them to undertake appropriate remedial and system improvement activities.
How oversight is conducted. Oversight methods include monitoring the use of seclusion to
ensure that all applicable state requirements are followed and to detect unauthorized,
inappropriate/ineffective use or over use. Oversight methods should include gathering
information about frequency, length of time of each use and the duration of use over time as
well as the impact of seclusion on the individual. Oversight also includes using information
to assure proper use and to reduce the use of seclusion in the future. The response should
include
1) How information about seclusion is collected and compiled so that it can be analyzed
to enable the identification of trends/patterns and the development of quality
improvement strategies. For example, reports may be filed by phone, in written form,
or through the use of information technology, each of which requires specific practices
to collect and then compile and analyze the information
2) How information about the use of seclusion is used to identify issues related to the
waiver populations, providers at the system-wide level and how that information is
used to develop strategies to ensure the proper use and achieve a reduction in the use
of seclusion.
3) The frequency of oversight activities.

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CMS Review Criteria
The response specifies:
• The state agency (or agencies) responsible for overseeing the use of seclusion and
ensuring that the state’s safeguards are followed.
• When oversight is not performed by the Medicaid agency or the operating agency (if
applicable), the process for the oversight agency to communicate information and findings
to the Medicaid agency and/or operating agency.
• Methods for detecting unauthorized use, over use or inappropriate/ineffective use of
seclusion and ensuring that all applicable state requirements are followed.
• How data are analyzed to identify trends and patterns and support improvement strategies.
• The methods for overseeing the operation of the incident management system including
how data are collected, compiled, and used to prevent re-occurrence.
• The frequency of the oversight activities.

Appendix G-3: Medication Management and
Administration

Overview

This section addresses two distinct topics: (a) medication management, which means the review
of waiver participant medication regimens (e.g., the appropriateness of the medications that a
person receives) and (b) medication administration (the administration of medications to
participants who are unable to administer their own medications by waiver providers). Both of
these topics have potential ramifications for the health and welfare of waiver participants.

Detailed Instructions for Completing Appendix G-3
Item G-3-a: Applicability
Instructions

Select whether this section applies to the waiver. If it applies, then complete the remainder of the
section. If not, do not complete the rest of the section.
Technical Guidance

This question must be completed when waiver services are furnished to participants who are served
in licensed or unlicensed living arrangements where a provider has round-the-clock responsibility
for the health and welfare of residents. The question does not need to be completed when waiver
participants are served exclusively in their own private residences or in the home of a family
member. However, a state may include this Appendix if it wishes. This may be the case when
supporting waiver participants who live in their own private residences or the home of a family
member entails the involvement of waiver providers in the management and/or administration of
their medications.

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Item G-3-b: Medication Management and Follow-Up
Medication management means the review of a participant’s full medication regimen to ensure its
appropriateness. When individuals receive medications for the purpose of modifying or controlling
behavior, the state is expected to have policies and procedures concerning the effective use and
management of such medications. Medication management also is relevant when a participant
receives multiple medications in order to guard against over or inappropriate medication.
Item G-3-b-i: Responsibility
Instructions

Specify the entity (or entities) that have ongoing responsibility for monitoring participant
medication regimens, the methods for conducting monitoring, and the frequency of monitoring.
Technical Guidance

First-line responsibility for monitoring participant medication regimens resides with the medical
professionals who prescribe medications. The response to this item should identify the entity or
entities that conduct second-line monitoring.
This second-line monitoring may or may not be conducted by a state agency. Entities responsible
for second-line monitoring may include licensing agencies, case or care managers, or others.
Monitoring also might include the review of medication regimens by Medicaid agency utilization
review staff or contractors. When behavior-modifying medications are employed, second line
monitoring responsibility must be specified. It is not expected that in-depth monitoring will be
conducted in the case of medications that are prescribed for the short-term treatment of an illness.
The response must describe how second-line monitoring is conducted, by whom and how
frequently (e.g., periodic review of medication regimens by a care manager or nurse). Monitoring
methods should be designed to detect potentially harmful practices and provide for follow-up to
address such practices. Specify whether monitoring has been designed to focus on waiver
participants who have especially complex medication regimens or who are prescribed behaviormodifying medications as part of their treatment programs. Monitoring may be conducted as part
of the periodic monitoring of participant health and welfare.
CMS Review Criteria
The waiver specifies:
• The entity or entities responsible for ongoing monitoring of participant medication
regimens.
• The scope of monitoring (i.e., whether monitoring is designed to focus on certain types of
medications or medication usage patterns).
• Methods for conducting monitoring.
• Frequency of monitoring.
• How monitoring has been designed to detect potentially harmful practices and follow-up
to address such practices.
• How second-line monitoring is conducted on the use of behavior modifying medications.

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Item G-3-b-ii: State Oversight and Follow-up
Instructions

Describe how the state oversees or monitors second-line medication management processes to
ensure that participant medications are managed appropriately, including: (a) the identification of
potentially harmful practices (e.g., the concurrent use of contraindicated medications); (b) the
method(s) for following up on potentially harmful practices; and, (c) the state agency (or agencies)
responsible for follow-up.
Technical Guidance

Provide an overview of how the state oversees the performance of second-line medication
monitoring processes to ensure that potentially harmful practices are identified and addressed.
Specify the state agency (or agencies) responsible for this oversight and how frequently oversight
is performed. If the Medicaid agency or operating agency (if applicable) does not directly conduct
this oversight, describe how oversight results are regularly shared with the agency that administers
the waiver program.
If improvements in oversight are planned during the period that the waiver is in effect, such
improvements should be briefly identified here and described in more detail in Appendix H.
CMS Review Criteria
The waiver specifies:
• The state agency (or agencies) responsible for oversight
• When oversight is not conducted by the Medicaid agency or the operating agency (if
applicable), the process to communicate information and findings from monitoring are
regularly communicated to the Medicaid agency and the operating agency (if applicable).
• How state monitoring is performed and how frequently
• How the state monitoring program gathers information concerning potentially harmful
practices and employs such information to improve quality.

Item G-3-c: Medication Administration by Waiver Providers

This item concerns the administration of medications by waiver providers to waiver participants who are
not able to self-administer their medications or the oversight by waiver providers of participant selfadministration of medications.

Item G-3-c.i: Provider Administration of Medications
Instructions
Select the “yes” response when waiver providers administer medications or oversee the self-administration
of medications by waiver participants. Complete the remainder of the item. If waiver providers do not
administer medications or oversee self-administration, select the second response. Do not complete the
remainder of the item.

Item G-3-c.ii: State Policy
Instructions
Summarize the state policies that apply to administration of medications by waiver providers or waiver
provider responsibilities when participants self-administer medications, including (if applicable) policies
concerning medication administration by non-medical personnel. State laws, regulations, and policies
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that are referenced in the summary must be available to CMS upon request through the Medicaid
agency or the operating agency (if applicable).
Technical Guidance

When waiver providers administer medications to participants who are unable to self-administer,
states typically have adopted formal policies (in law and/or regulation) that govern this practice.
The response to this item should summarize the applicable policies, including whether
administration is restricted to licensed medical personnel or may be performed by non-medical
waiver provider personnel. In the case of the latter, the summary should identify the
training/education that such personnel must have in order to administer medications and the extent
of oversight by licensed medical professionals that is performed. The summary also should
describe the state’s policies with respect to waiver providers overseeing the self-administration of
medications by waiver participants.
CMS Review Criteria
The waiver specifies:
•
•

Policies concerning the administration of medications to individuals who are unable to
self-administer and the responsibilities of providers for overseeing self-administration.
If applicable, the training/education that non-medical waiver providers must have in order
to administer medications to participants who cannot self-administer and the extent of the
oversight of these personnel by licensed medical professionals.

Item G-3-c.iii: Medication Error Reporting
Instructions

Select whether providers who administer medications to waiver participants who are unable to
self-administer must both record and report medication errors to a state agency. If this choice is
selected, specify the state agency to which errors are reported and the types of medication errors
that providers must: (a) record and (b) report. If providers are required to record errors but not
report them to a state agency, select the second choice and specify the types of errors that providers
must record. If providers are not required to record and/or report errors or waiver providers do not
administer medications but only oversee their self-administration by waiver participants, select the
“not applicable” choice.
Technical Guidance

Medication error recording and reporting are important medication administration quality
assurance/improvement tools. In some states, providers are required to record medication errors
and report some or all errors to a state agency. In other states, providers are required to record but
not report errors (in this instance, recorded errors may be reviewed during a periodic provider
quality review). Medication errors include such errors as wrong dose, wrong time, wrong route,
wrong medication or missed medication.

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CMS Review Criteria
If applicable, the waiver specifies:
•
•

The types of medication errors that providers must record and/or report.
When reporting is required, the agency to which errors must be reported is specified

Item G-3-c.iv: State Oversight Responsibility
Instructions

Specify the state agency (or agencies) responsible for monitoring the performance of waiver
providers in the administration of medications to waiver participants who are unable to selfadminister, how monitoring is performed and its frequency.
Technical Guidance

Here, describes how the performance of waiver providers in administering medications is
monitored. If monitoring is not performed by the Medicaid agency or the operating agency (if
applicable), describe how monitoring results are regularly communicated to the agency that is
responsible for administering the waiver.
Monitoring may take the form of reviewing provider records or analyzing provider-reported errors.
The response should indicate how frequently monitoring of medication administration is
conducted. A state also may have linked the reporting of specific types of medication errors to its
critical incident management system. Describe how this monitoring is designed to identify
problems in provider medication administration, support remediation as appropriate and contribute
to quality improvement efforts in this arena.
The response should describe how information about medication monitoring is compiled and
explain how the collection of these data supports the identification of trends/patterns and the
development of quality improvement strategies.
CMS Review Criteria
The waiver specifies:
• The state agency (or agencies) responsible for the on-going monitoring of waiver provider
agencies’ performance in administering participant medications.
• When oversight is not conducted by the Medicaid agency or the operating agency (if
applicable), the process to communicate information and findings to the Medicaid agency
or the operating agency.
• Monitoring methods include the identification of problems in provider performance and
support follow-up remediation actions and quality improvement activities.
• How data are acquired to identify trends and patterns and support improvement strategies.

Quality Improvement: Health and Welfare
Health and Welfare
The state demonstrates it has designed and implemented an effective system for assuring
waiver participant health and welfare.
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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.
Instructions

The QIS must describe how the state Medicaid Agency will determine that each waiver assurance
(and its associated component elements) is met. The waiver assurance is listed above. For each
assurance, this description must include:

•

•
•

Activities or processes that are related to discovery and remediation, i.e., review, assessment
or monitoring processes; who conducts the discovery or remediation activities and with what
frequency. These monitoring activities provide the foundation for quality improvement by
generating information regarding compliance, potential problems and individual corrective
actions. The information can be aggregated and analyzed to measure the overall system
performance in meeting the waiver assurances. The types of information used to measure
performance, should include relevant quality measures/indicators.
The entity or entities responsible for reviewing the results (data and information) of discovery
and remediation activities to determine whether the performance of the system reflects
compliance with the assurances; and,
The frequency at which system performance is measured.

Technical Guidance
This QIS element focuses on discovery and remediation activities, that is, processes to assess, review,
evaluate or otherwise analyze a program, process, operation, or outcome. Specifically, the evidence
produced as a result of discovery and remediation activities should provide a clear picture of the state’s
compliance in meeting an assurance.

CMS Review Criteria
• The discovery of compliance with this assurance and the remediation of identified
problems must address:
1) How the Medicaid agency assures compliance with the following health and
welfare assurance:
The state, on an on-going basis, identifies, addresses, and seeks to
prevent the occurrence of abuse, neglect and exploitation.
2) How frequently oversight is conducted; and
3) The entity (or entities) responsible for the discovery and remediation activities.

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Appendix H: Systems Improvement

Detailed Instructions for Completing Appendix H
Quality Improvement Strategy

The initial QIS is submitted as part of the waiver application. When the waiver is renewed, an
updated QIS is submitted as part of the waiver application. Modifications or updates to the QIS
are submitted to CMS as part of the state’s Annual Report on Home and Community-Based
Services Waivers (HCFA 372(S) form), required under the provisions of 42 CFR §441.302(h).
The state has been asked to provide components of a Quality Improvement Strategy (QIS) in the
Appendices of the application as follows:
The measures and processes the state will use to determine that each waiver assurance is met
during the period that the waiver is in effect (discovery);
• The measures and processes employed to correct identified problems (remediation);
• The roles and responsibilities of the parties involved in measuring performance and making
improvements;
• The processes employed to aggregate and analyze trends in the identification and remediation
of problems,
• The processes employed to establish priorities, develop strategies for, and assess
implementation of system improvements (system improvement);
• The process and timelines for compiling the information and communicating to waiver
participants, families, service providers, other interested parties, and the public; and,
• The frequency and processes used to evaluate and revise the QIS.
Additionally, Appendix H asks the state to describe:
• How information about performance is used to identify and prioritize areas for system
improvement;
• How quality improvement information is compiled and communicated; and,
• The process that the state will follow to assess the effectiveness of both the system
improvement and the QIS and revise it as necessary and appropriate.
•

General Instructions
Instructions

Planned Quality Improvements. A state may not have a fully developed QIS when the waiver
application is submitted. For example, a state may not have a system to compile information about
the occurrence of and response to critical incidents but may plan to design and implement such a
system during the period the waiver is in effect. Or a state may plan to create a Quality
Improvement Council to identify and prioritize quality improvement activities but does not expect
the Council to be established prior to the effective date of the waiver renewal. When elements of
the QIS are not in place in a submitted application but will be developed and implemented during
the period the waiver is in effect, the QIS should include a detailed work plan with specific steps
and timelines for addressing the gap(s). The work plan should describe at minimum the specific
tasks to be undertaken, major milestones associated with completing each task, estimated timeline
for completion, and the entity (or entities) responsible for completing the tasks.

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Multiple Waivers. It may be more efficient and effective for a QIS to span multiple HCBS
waivers and other related long-term care services, especially when a state operates more than one
waiver that serves the same or similar waiver target groups or multiple waivers employ similar
quality improvement methods. While the QIS may span multiple waivers and/or other Medicaid
long-term services, it must be designed to ensure it encompasses all requirements and assurances
specific to each waiver. Unless the state has requested and received approval from CMS for the
consolidation of multiple waivers for the purpose of reporting, then the state must stratify
information for each approved waiver program, i.e., employ a representative sample for each
waiver. Also include: (a) the control numbers for the other waivers and (b) the other Medicaid
long-term services to which the QIS applies.
Concurrent Managed Care/§1915(c) Waivers. When a §1915(c) waiver operates concurrently
with a Medicaid managed care authority, the quality-related requirements under each authority
must be met in their own right. The managed care quality requirements do not supplant the
§1915(c) requirements and vice versa. In general, the §1915(c) waiver assurances are not
addressed in the managed care authority application and, hence, must be addressed in the QIS.
However, if there is information in the managed care authority application that is pertinent to
addressing a waiver assurance, include a reference to that section/item that is in the managed care
authority application.
CMS Review Criteria
When the state does not have a fully developed Quality Improvement Strategy, there is a work
plan that addresses each element where improvements will take place during the waiver period
including the following:
• Specific tasks associated with the improvement.
• Major milestones and dates for completing the improvements.
• The entity (or entities) responsible for completing these tasks.
When the QIS spans more than one waiver and/or other types of long-term care services
under the Medicaid state Plan, the QIS:
• Stratifies information for each respective waiver.
• Provides control numbers of the other waivers.
• Provides the other long-term care services addressed in the QIS.

Quality Improvement Strategy: Systems Improvement
The initial QIS is submitted as part of the waiver application. When the waiver is renewed, an
updated QIS is submitted as part of the waiver application. Modifications or updates to the QIS
are submitted to CMS as part of the State’s Annual Report on Home and Community-Based
Services Waivers (CMS 372(S) form), required under the provisions of 42 CFR §441.302(h).
In its application the state has been asked to provide components of a Quality Improvement
Strategy (QIS) in the appendices of the application as follows:
•
•
•

The measures and processes the state will use to determine that each waiver assurance is met
during the period that the waiver is in effect (discovery);
The measures and processes employed to correct identified problems (remediation);
The roles and responsibilities of the parties involved in measuring performance and making
improvements;

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•

The processes employed to aggregate and analyze trends in the identification and remediation
of problems,

Appendix H specifically asks the state to identify:
o The processes employed to establish priorities, develop strategies for, and assess
implementation of system improvements (system improvement);
o The process and timelines for compiling the information and communicating to waiver
participants, families, service providers, other interested parties, and the public; and,
o The frequency and processes used to evaluate and revise the QIS.
o How and by whom information about performance is used to identify and prioritize
areas for system improvement;
o How quality improvement information is compiled and communicated; and,
o The process that the state will follow to assess the effectiveness of both the system
improvement and the QIS and revise it as necessary and appropriate.
o Information that the state gathers on participants’ experience of care, if any.

Detailed Instructions for Completing Appendix H
Instructions

The Quality Improvement Strategy must describe roles and responsibilities of the parties
involved in discovery, remediation, and improvement activities. In other appendices, the state has
described the roles and responsibilities of parties involved in discovery and remediation. In
Appendix H, 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 effectuating 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 Appendix H is on identifying who is involved in appraising the state’s 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 revolves
around 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.

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CMS Review Criteria
The QIS describes the roles and responsibilities of entities and persons involved in collecting
and analyzing information derived from discovery and remediation activities (described in
other appendices), recommending system improvements, and analyzing the effectiveness of the
improvement initiatives.

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

The QIS must describe the processes employed to review findings from its discovery and
remediation activities, to establish priorities for system improvement, and to evaluate the
effectiveness of the improvements.
Technical Guidance

The purpose of state performance appraisal is to identify areas that warrant improvement. While
remediation often addresses correction of individual situations, system improvements result from
the analysis of the discovery and remediation activities. Often, the appraisals identify many
potential opportunities for system improvement. CMS recognizes that it may be necessary to
prioritize the design and implementation of system improvement strategies.
Appendix H asks for a description of how the state will identify, prioritize and develop strategies
for system improvements. This is likely to involve multiple approaches, including the use of
researchers, special advisory consultants, research organizations, and consumer and/or provider
focus groups. The focus here is on describing the process the state will follow during the waiver
period, to identify the improvement initiatives it will pursue. The results of these initiatives will
be reported in the CMS annual report.
CMS Review Criteria
The QIS describes the processes that are employed to review findings, establish priorities,
develop strategies, and assess effectiveness of system improvements.

Compilation and Communication of Quality Improvement Information
Instructions

In Appendix H, the Quality Improvement Strategy must describe how the state compiles quality
improvement information and the frequency with which the state communicates this information
(in report or other forms) to waiver participants, families, waiver services providers, other
interested parties and the public.
Technical Guidance

List and briefly summarize the major types of quality improvement information that will be
prepared during the period the waiver is in effect. Indicate for each source of information, the
topic addressed, the frequency with which it is developed and communicated, and the primary
audience (i.e. the groups for which the report(s) are prepared). Quality improvement information
may be designed to focus on specific areas of concern; may be related to a specific location, type
of service or subgroup of participants; may be designed as administrative management reports;
and/or may be developed to inform stakeholders and the public. Describe how quality
improvement results are communicated to other agencies, participants, families, waiver providers,

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other interested parties, and the public. Results may be posted to a website. Not all sources of
information need be disseminated to each stakeholder group.
Reports may be targeted to specific entities for the purpose of ongoing quality improvement such
as routine incident management summary reports issued to providers for response and action or
reports issued to Medicaid agency by the operating agency on compliance with assurance
requirements.
CMS Review Criteria
The QIS describes
• The types of quality improvement reports that are compiled.
• The frequency with which such reports are compiled.
• How results are communicated, and with what frequency, to agencies, waiver providers,
participants, families and other interested parties, and the public.

Periodic Evaluation and Revision of the QIS
Instructions

Describe the process to periodically evaluate and revise, as appropriate, the Quality Improvement
Strategy.
Technical Guidance

Quality Improvement Strategies are dynamic. They can and do change over time in response to
changing needs and conditions in the waiver program/state. Because of this dynamic nature, it is
important for states to periodically evaluate their QI strategies. The results of the evaluation might
demonstrate the need to change priorities, use different approaches to measure progress, modify
roles and responsibilities of key entities, and modify data sources in order to retrieve the
information needed for measurement.
In this section, briefly describe the process that will be used to periodically evaluate the QIS and
the frequency with which the evaluation/re-evaluation will occur. The description should also
identify the key entities involved in the evaluation. It is up to the state to determine the frequency
for evaluating the QIS. However, the QIS should be evaluated at least once during the waiver
period and evaluated in advance of the submission of the waiver renewal application.
If the result of the evaluation process is revision of the QIS, the revised QIS should be
communicated to CMS as part of the submission of the annual waiver report.
CMS Review Criteria
The QIS describes the process and frequency for evaluating and updating the QIS (i.e., once
during the waiver period and prior to renewal).

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Appendix I: Financial Accountability

Brief Overview

This Appendix addresses the following financial elements of HCBS waiver operations:
• Financial Integrity and Accountability (Appendix I-1)
• Rates, Billings and Claims (Appendix I-2)
• Payments (Appendix I-3)
• Non-Federal Matching Funds (Appendix I-4)
• Exclusion of Medicaid Payment for Room and Board (Appendix I-5)
• Payment for Rent and Food Expenses of an Unrelated Live-In Caregiver (Appendix I-6)
• Participant Co-Payments for Waiver Services and Other Cost Sharing (Appendix I-7)
NOTE: When a HCBS waiver operates concurrently with a Medicaid managed care authority
and waiver services are furnished through managed care entities (e.g., MCOs, PIHPs or PAHPs),
the responses to several items in Appendices I-1, I-2 and I-3 are affected. The instructions
contain guidance about how responses to the certain items are affected when there is a concurrent
waiver.

APPENDIX I-1: Financial Integrity and
Accountability

Detailed Instructions for Completing Appendix I-1
Instructions

In the text field, describe the methods that are employed to ensure the integrity of payments that
have been made for waiver services, including: (a) requirements concerning the independent audit
of provider agencies; (b) the post-payment review program that the state conducts to ensure the
integrity of provider billings for Medicaid payment of waiver services, including the methods,
scope and frequency of reviews that are conducted; and, (c) the agency (or agencies) responsible
for conducting the periodic independent audit of the waiver program as required by the Single
Audit Act.
Technical Guidance

This item focuses on how the state assures the integrity of payments made for waiver services. It
concentrates on post-payment review activities rather than on the methods of ensuring the validity
of provider billings prior to payment (those methods are addressed in Item 2-d below).
The description must address each of the following:
•
•

State requirements concerning the independent audit of provider agencies. Specify
whether waiver providers are required to secure an independent audit of their financial
statements.
The state’s own post-payment review program to ensure the integrity of provider
billings for Medicaid payment of waiver services. Describe the post-payment review
activities that are used for each waiver service. The same review activities may be used for
several waiver services. When this is the case, the description may group the services to

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which the same methods apply. In instances in which post-payment review activities differ
by service type, states must clearly describe the differences. If the state documents fiscal
integrity measures for self-directed services elsewhere in the application, it is not necessary
to repeat that information if a reference to the appropriate appendix is provided. For each
post-payment activity, the waiver application should address:
1) Methods for reviewing paid claims. A post-payment review program might include
testing a sample of provider billings to ensure that they are properly supported by
documentation of the actual provision of waiver services or the review of provider
cost accounting systems to ensure that, when rates are based on provider costs, costs
have been properly recorded and do not include unallowable expenses.
2) Methods for addressing findings. Describe how the results of reviews are
communicated to providers. If the state requires corrective action plans from
providers, specify how the state ensures corrective action plans are followed. When
post-payment reviews identify retractable claims, the state must remove the claim
from its FFP calculation and recoup the inappropriate payment.
3) Scope of the review. Describe how claims or records are selected for review. For
example, the scope of a post-payment review might be the last six months of claims
for a representative sample of providers, or a representative sample of claims for
providers identified through a risk analysis.
4) Frequency of the review. Define how often post-payment activities are conducted.
If the state does not perform post-payment activities at specific intervals, explain
specific reasons and thresholds that would initiate a post-payment review.
•

The state agency (or agencies) responsible for conducting the state’s post-payment review
activities. If post-payment reviews are conducted by contractors, specify the state agency
responsible for overseeing contractor performance. If multiple agencies and/or contractors
are performing post-payment reviews, then describe each agencies’ method, scope, and
frequency of the post-payment reviews and ways to prevent any duplicative, unnecessary
efforts during the review process.

•

The state agency (or agencies) responsible for conducting the state’s independent financial
audit in accordance with the Single Audit Act. HCBS waivers (like other Medicaid services)
also are subject to requirements of the Single Audit Act (31 U.S.C. 7501-7507) as amended
by the Single Audit Act Amendments of 1996 (P.L. 104-146). If the financial audit program
is conducted by contractors, specify the state agency responsible for overseeing contractor
performance.

If the description cites applicable state laws, regulations, and policies, the documents cited must
be readily available through the Medicaid agency or the operating agency (if applicable) when
requested by CMS.
§1915(c) Waivers that Operate with Concurrent Medicaid Managed Care
When the HCBS waiver operates concurrently with a Medicaid managed care authority, such as a §1915(b)
waiver, and waiver services are furnished through managed care entities (e.g., MCOs, PIHPs or PAHPs),
the managed care authority financial accountability requirements apply. Under such arrangements, the state
does not make payments directly to waiver providers but instead pays a capitated payment rate to the
managed care entity for the delivery of waiver services and the entity in turn pays other providers (except,
if applicable, services that are furnished on a fee-for-service basis outside the capitated rate). Alternative
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methods are used to ensure financial accountability, including ensuring that payments are only
made to a managed care entity only for eligible persons who have been properly enrolled in the
waiver. Therefore, the description of the methods to ensure payment integrity should only briefly
address the methods to ensure the integrity of payments to managed care entities unless payments
are also made on a fee-for-service basis for some waiver services outside the capitation rate. The
summary may include references to the managed care authority application or provisions of the
state’s contract with managed care entities.
CMS Review Criteria
The waiver:
• Specifies whether providers are required to secure an independent audit of their financial
statements.
• Describes the state’s post-payment review program, including the methods, frequency,
and scope of reviews.
• Provides for a post-payment review program that is adequate to assure the integrity of
payments.
• Specifies responsibilities for conducting post-payment review activities.
• Identifies the entity responsible for conducting the periodic independent audit of the
waiver program under the provisions of the Single Audit Act.
In the case of §1915(c) waivers that operate with a concurrent Medicaid managed care
authority, the foregoing criteria apply only to services not included in the capitation rate.
Managed care requirements and criteria apply to ensuring financial accountability of
payments made to managed care entities and this information is included under the
appropriate managed care authority.

Quality Improvement: Financial Accountability

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.
Instructions

The QIS must describe how the state Medicaid agency will determine that each waiver
assurance (and its associated component elements) is met. The waiver assurance and
component elements are listed above. For each component element, this description must include:
•

Activities or processes that are related to discovery and remediation, i.e., review, assessment
or monitoring processes; who conducts the discovery or remediation activities and with what
frequency. These monitoring activities provide the foundation for quality improvement by
generating information regarding compliance, potential problems and individual corrective
actions. The information can be aggregated and analyzed to measure the overall system

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•
•

performance in meeting the waiver assurances. The types of information used to measure
performance, should include relevant quality measures/indicators.
The entity or entities responsible for reviewing the results (data and information) of discovery
and remediation activities to determine whether the performance of the system reflects
compliance with the assurances; and,
The frequency at which system performance is measured.

Technical Guidance

This QIS element focuses on discovery and remediation activities, that is, processes to assess,
review, evaluate or otherwise analyze a program, process, operation, or outcome. Specifically, the
evidence produced as a result of discovery and remediation activities should provide a clear picture
of the state’s compliance in meeting an assurance.
CMS Review Criteria
• The discovery of compliance with this assurance and the remediation of identified
problems must address:
1) How the Medicaid agency assures compliance with the following assurance:
2) State financial oversight exists to assure that claims are coded and paid for in
accordance with the reimbursement methodology specified in the approved
waiver.
3) How frequently oversight is conducted; and
4) The entity (or entities) responsible for the discovery and remediation activities.

APPENDIX I-2: Rates, Billing and Claims

Overview

This Appendix addresses the following topics: (a) waiver service rate determination methods; (b)
the flow of provider billings (a.k.a., provider claims for payment for services furnished to waiver
participants) to the state; (c) the practice of certifying public expenditures; (d) processes for
validating provider payments; and, (e) billing maintenance requirements.

Detailed Instructions for Completing Appendix I-2
Item I-2-a: Rate Determination Methods
Instructions

In the text field and in two pages or less (no more than 12,000 characters), describe the methods
that are employed to establish provider payment rates for waiver services and the entity or entities
that are responsible for rate determination. Indicate any opportunity for public comment in the
process for establishing rates. Describe the state’s rate review process to ensure that payment rates
remain in compliance with §1902(a)(30)(A) of the Act (i.e., “payments are consistent with
efficiency, economy, and quality of care and are sufficient to enlist enough providers”). If different
methods are employed for various types of services, the description may group services where the
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same method is employed. If the state discusses rate-setting information specific to participant
directed services in other appendices of the application, provide a reference to this information, or
describe the rate setting methodology in detail in this section.
Technical Guidance
Waiver payment rates may be determined in a variety of ways and frequently the methods that are
employed vary by type of service. While rate determination methods may vary, payments for
waiver services (like other Medicaid services) must be consistent with the provisions of
§1902(a)(30)(A) of the Act and the related federal regulations at 42 CFR §447.200-205. The state
should have a monitoring process to ensure that these requirements are met. States must review
their rate setting methodology, at minimum, every five years to ensure that rates are adequate to
maintain an ample provider base and to ensure quality of services. This rate review process can
encompass a variety of rate review methods. For example, a state could elect to rebase their
existing rate setting methodology. Rate rebasing would involve evaluating an existing fee schedule
rate setting methodology and adjusting or updating individual rate components with more current
data. States must describe their rate review process. The state’s description of the rate review
process should include:
• When rates were initially set and last reviewed;
•

How the state measures rate sufficiency and compliance with §1902(a)(30)(A) of the Act;

•

The rate review method(s) used; and

•

The frequency of rate review activities.

Rates may be prospective or provide for retrospective cost settlement of interim rates. Rates may
be established by maintaining a state established fee-for-service schedule. If the state uses a feefor-service schedule, the rate model (i.e., underlying cost factors and assumptions) must be readily
available through the Medicaid agency or operating agency (if applicable) when requested by
CMS. The state may submit this information to CMS under ”Additional Needed Information
(Optional)” under the Main Module Section of the application if there is not a space available in
the Appendix I-2-a. CMS may request the rate model from the state during the informal or formal
RAI process. Rates may incorporate “difficulty of care” factors to take into account the level of
provider effort associated with serving individuals who have differing support needs; rates may
also include geographic adjustment factors to reflect differences in the costs of furnishing services
in different parts of a state. If state-established rates vary for different providers of a waiver
service, indicate the basis for the variation. The same rate determination method may be used for
several waiver services. When this is the case, the description may group the services to which
the same method applies. When a service is available for participant direction, the state must
expressly state whether the rate determination method differs from the methodology used when
the service is provider-managed. If the rate determination method differs, the state must document
how it differs. State laws, regulations or policies cited in this description must be readily available
through the state Medicaid agency or the operating agency (if applicable) when requested by CMS.
Participant Direction. When a service may be participant directed, describe whether the method
of rate determination in any way differs from the methodology that is utilized when service is
provider managed.
A state must have uniform rate determination methods or standards that apply to each waiver
service. Rates may be established by the operating agency so long as they are in accordance with
methods or standards that have been adopted or approved by the Medicaid agency. The same
methods or standards must be applied in all jurisdictions where waiver services are furnished.

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When local government agencies establish provider payment rates, the rates must be determined
employing the uniform methods or standards that have been adopted by the state in order to ensure
that payments across all areas of the state are equivalent (differences in rates are based on factors
specified in the methodology or formula – e.g., difficulty of care or geographic adjustment factors).
The description of rate determination methods must clearly identify the entity (or entities) that
perform the rate determination function and the oversight process that is employed to assure the
integrity of the rate setting activity (i.e., the methodology is adhered to and any differences in rates
for a waiver service are consistent with the methodology). Also, describe the extent to which
public comment is solicited concerning rate determination methods.
Also, describe how the state makes information available about payment rates available to waiver
participants so that they are aware of the costs of waiver services.
§1915(c) Waivers that Operate with Concurrent Managed Care

When the HCBS waiver operates concurrently with a managed care authority (§1915(b), §1932(a),
§1115) and waiver services are furnished through managed care entities (e.g., MCOs, PIHPs or
PAHPs), the state establishes a capitation (per member per month) payment rate that it makes the
managed care entity. The managed care entity then establishes the payments it makes to waiver
providers who furnish services to waiver participants. For these managed long-term services and
supports (MLTSS) programs, or for programs that include MLTSS as part of an integrated care
delivery system, the managed care capitation rates are actuarially certified and approved by the
CMS Division of Managed Care Plans, Regional Offices and Office of the Actuary. When such
arrangements are in effect, only describe the rate setting methods that are employed for the waiver
services that are not included in the capitation rate (i.e., services that will continue to be furnished
on a fee-for-service basis). Do not describe how the capitation rate is established. Instead, simply
make reference to the concurrent managed care authority application and associated materials.
Administrative Claiming

Some services such as case management, supports broker, and financial management services may
be provided as a Medicaid administrative activity rather than as a waiver service. The state must
assure that the administrative costs, necessary for the efficient administration of the Medicaid state
plan, are in accordance with the approved cost allocation plan. Please note that cost allocation
plans are not approved via approval of the HCBS waiver application.

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CMS Review Criteria
The waiver:
• Describes the rate setting method that it used for each waiver service. If rates are not
uniform for every provider of a waiver service, the waiver describes the basis for the
variation.
• Describes the rate setting methodology for self-directed services, if applicable.
• Specifies the entity (or entities) responsible for rate determination and how oversight of
the rate determination process is conducted.
• Specifies the year rates were set and the year in which rates were last reviewed.
• Describes how the Medicaid agency solicits public comments on rate determination
methods.
• Describes how information about payment rates is made available to waiver participants.
• Describes the state’s rate review methods and processes.
In the case of waivers with approved concurrent managed care authority (e.g. 1915(b), 1932(a),
1115), the foregoing criteria apply only to services not included in the capitation rate. The
method of determining the capitation rate is subject to managed care requirements and criteria.
Item I-2-b: Flow of Billings
Instructions

Describe the flow of billings for waiver services, specifying whether provider billings flow directly
from providers to the state’s claims payment system or whether billings are routed through other
intermediary entities. If billings flow through other intermediary entities, specify the entities.
Technical Guidance

Indicate whether billings for waiver services flow directly from service providers to the state’s
Medicaid claims processing system (MMIS) or pass through intermediate entities (e.g., an
Organized Health Care Delivery System, a Financial Management Services entity, a local
government agency (e.g., county), a state agency or via another route). If the flow of billings
differs among types or classes of waiver services, describe each flow of billings. The description
should provide a clear picture of how a provider invoice becomes a claim for Medicaid payment.
There is no federal requirement that all waiver provider billings must flow directly from the waiver
provider to the state. Alternative arrangements may be made to flow billings through intermediate
entities (e.g., public or private local management entities or a limited fiscal agent). The various
types of alternative arrangements that may be employed are subject to other federal requirements.
A state must provide that a provider may bill Medicaid directly rather than require that all billings
flow through an intermediate entity such as an OHCDS, a county or local government, etc.
§1915(c) Waivers that Operate with Concurrent Managed Care

When the HCBS waiver operates concurrently with a managed care authority and waiver services
are furnished through managed care entities (e.g., MCOs, PIHPs or PAHPs), provider billings flow
to the managed care entity except for services that are furnished on a fee-for-service basis outside
the capitation (per member per month) payment to the managed care entity. Only describe the
flow of billings for services that are furnished on a fee-for-service basis. Indicate that managed
care entity billings to the state are made in accordance with the provisions of the managed care
authority and provider billings to the managed care entity are made in the terms of the provider’s
contract with the managed care entity.

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CMS Review Criteria
The waiver:
• Describes the flow of billings from the waiver service provider to the state so that it is
clear how a provider invoice becomes a claim to Medicaid.
• Provides for the direct provider billing of waiver services to the state, or the option of
direct provider billing of waiver services to the state.
In the case of §1915(c) waivers that operate with a concurrent Medicaid managed care
authority, the foregoing criteria apply only to services not included in the capitation rate.
Otherwise, flow of billings is subject to managed care requirements and criteria.
Item I-2-c: Certifying Public Expenditures
Instructions

Select whether Certified Public Expenditures (CPEs) are made for waiver services and, if so,
whether the CPEs are made by state and/or local government agencies, specifying: (a) the local
government agencies that make the CPEs; (b) how it is assured that the CPE is based on the total
computable costs for waiver services; and, (c) how the state verifies that the CPEs are eligible for
federal financial participation in accordance with 42 CFR §433.51(b).
Technical Guidance

In some instances, a state or local government agency directly incurs the costs of furnishing waiver
services and submits its costs (termed “certified public expenditures” or CPEs) to the Medicaid
agency in lieu of providers billing the services directly to the Medicaid agency. For example, a
state agency or county that contributes part or all of the cost of service may directly pay provider
billings for waiver services on behalf of the Medicaid agency and then submit the total amount it
paid for waiver services to the Medicaid agency via a CPE. The CPE serves as the basis for the
Medicaid agency’s claim to CMS for federal financial participation (FFP). The Medicaid agency
would submit the CPE to CMS and FFP would be available as a percentage of the total cost
incurred/payments made by the state or local government agency. The Medicaid agency payment
to the state or local government agency would be the federal share of waiver costs. [N.B., CPEs
also are addressed in Appendix I-4 where the sources of funds that underlie the CPEs must be
detailed.]
When CPEs are made as part of the state’s claim for FFP, the state must have a process to assure
that the CPE is based on total computable costs for waiver services. This means the CPE represents
the total costs incurred/payments made by the state or local government agency and that FFP is
available as a percentage of these total costs incurred/payments made. In addition, the CPE is net
of any third party recoveries for the cost of services and/or waiver participant financial liability
computed under post-eligibility treatment of income requirements). This process must be
described in the response to this item. Finally, the state must have a process to verify that the CPEs
are eligible for FFP in accordance with 42 CFR §433.51(b). This process also must be described
in the response to this item.

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CMS Review Criteria
When CPEs are made, the waiver specifies:
• The state and/or local government agencies that certify the expenditures.
• The processes used to ensure that CPEs are based on total computable waiver costs.
• The processes to verify that the CPEs are eligible for federal financial participation.
Item I-2-d: Billing Validation Process
Instructions
In the text field, describe the process or processes that are employed to validate provider billings
that are included in the state’s claim for federal financial participation.
Technical Guidance
“Billing validation” means pre-payment and other processes that are designed to ensure that the
provider’s billing for waiver services meets essential tests and that only valid billings are included
in the state’s claim for federal financial participation. The essential tests are: (a) the individual was
eligible for the Medicaid waiver payment on the date of service; (b) the service billed was included
in the participant’s approved service plan; and, (c) the services were provided. Billing validation
is essential for ensuring the integrity of payments for Medicaid services.
Billing validation may entail using the MMIS to validate claims (e.g., verifying that the individual
for whom the billing was made was eligible for Medicaid on the date of service) and/or additional
pre-payment audit activities conducted by other entities (e.g., verifying that the service billed was
included in the participant’s service plan). States have many pre-payment billing validation
options, including:
Predictive modeling;
Pre-payment reviews;
Visit verification systems;
Third party liability processes; and
Case management systems that interface eligibility, service plan and claims data.

•
•
•
•
•

Some billing validation processes may be conducted post-payment (e.g., surveillance and
utilization review), including verification that the service billed was actually rendered. When a
validation process that is conducted post-payment reveals a problem with a billing, the state must
remove the problem billing from its claim for FFP and recoup the inappropriate payment. For
post-payment activities, the state may reference its response to Appendix I-1 of the waiver
application.
CMS Review Criteria
The billing validation methods address the three essential tests (below):
•
•
•

The individual was eligible for Medicaid waiver payment on the date of service;
The service was included in the participant’s approved service plan; and,
The services were provided.

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Item I-2-e: Billing and Claims Record Maintenance Requirement
Instructions
No response required.
Technical Guidance
Adequate records and information must be maintained to support financial accountability. In
accordance with 45 CFR §75.361, records and additional documentation to support financial
accountability must be maintained, at a minimum, 3 years from the submission of each CMS372(S) report. These records must be sufficient to ensure that there is an audit trail documenting
payments made to providers for waiver services. The audit trail must begin at the point of service
to the participant (and, thereby, include sufficient documentation that the service was actually
rendered on the date shown on the provider billing) and continue through to the claim for FFP.

Overview

APPENDIX I-3: Payment

This section concerns processes for the payment of provider billings (i.e., the transmittal of funds
from the state to the waiver provider who furnished the service). Item I-3-g also provides for the
identification of other payment arrangements (e.g., reassignment of payments to a governmental
agency) that are recognized under federal law.

Detailed Instructions for Completing Appendix I-3
Item I-3-a: Method of Payment -- MMIS
Instructions

Indicate whether payments to providers for waiver services are made exclusively through the
state’s Medicaid Management Information System (MMIS). If not, then select one of the other
choices. Also, select the first choice because the Medicaid agency must always retain the capability
to make direct payment to a provider whether or not it has other methods for making payment.
Technical Guidance

Usually, direct state payments to providers of waiver services are made through the state’s MMIS.
Use of the MMIS to make payments permits employing MMIS sub-systems to validate claims
(e.g., ensuring that the individual for whom the payment is made was eligible on the date of
service). Use of the MMIS provides a direct linkage between provider payments and the claim for
FFP.
When payments to providers for some or all waiver services are made outside the MMIS, a
complete description of the process that is employed must be provided, clearly identifying the
entities that make payments and how the audit trail is maintained to ensure the integrity of
payments (i.e., the payment for each waiver service can be directly linked to the original validated
provider billing for the service). In the case of some waivers, an operating agency receives
provider billings, processes the billings, and makes payment to providers. When this is the case,
the arrangement should be further specified in Item I-3-b (limited fiscal agent) or Item I-3-g-i
(reassignment to a governmental entity) as the case may be. Participant-directed services can give
rise to another instance when payments to providers are made outside the MMIS when a financial

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management services entity makes payments to participant-employed workers under an agreement
with the Medicaid agency.
§1915(c) Waivers that Operate with Concurrent Managed Care

In the case a §1915(c) waiver that operates with a concurrent Medicaid managed care authority,
payments to providers are made by the managed care entity which receives a capitated payment
from the state. Describe how payments are made to managed care entities, including how such
payments are made through the MMIS.
CMS Review Criteria
When payments to providers are made outside the MMIS, the waiver specifies:
• The processes that are used to make payment.
• How the processes ensure the maintenance of a proper audit trail
• Providers may receive payment directly from the Medicaid agency.
• When payments for waiver services are made by a managed care entity or entities, the
waiver describes how the monthly capitated payments are made to the managed care entity
or entities.
Item I-3-b: Direct Payment
Instructions

Check each applicable mechanism that is employed to make payments to waiver providers.
Technical Guidance

§1902(a)(32) of the Act requires payments to be made directly by the Medicaid agency to the
actual providers of waiver and state plan services. This requirement is satisfied when the Medicaid
agency itself makes the payment or the payment is made by the same state fiscal agent that makes
payments on behalf of the Medicaid agency for other Medicaid services. As a general matter, the
Medicaid agency must always retain the capability to make direct payment to a provider and, thus,
the first choice always should be selected.
In the alternative, payments may be made by a limited fiscal agent that is subject to Medicaid
agency oversight. If a limited fiscal agent is used, identify the agent, describe the functions that
the limited agent performs, and describe how the Medicaid agency exercises oversight of this
agent. A limited fiscal agent might be a waiver operating agency or a financial management
services entity. This selection should be made when payments for some or all waiver services are
made outside the MMIS, as indicated in Item I-3-b.
§1915(c) Waivers that Operate with Concurrent Managed Care

In the case of a §1915(c) waiver that operates with a concurrent Medicaid managed care
authority, only describe how payments are made for services that are not included in the
capitation rate that is paid to the managed care entity. If no services are paid outside the
capitation rate, simply respond “not applicable.”

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CMS Review Criteria
•

The waiver specifies that the Medicaid agency makes payments directly to providers of
waiver services.

•

When a limited fiscal agent is employed, the waiver specifies:
 The entity or entities that serve as a limited fiscal agent.
 The payment functions performed by the limited fiscal agent.
 How providers are informed about the process for billing Medicaid directly.
 How the Medicaid agency exercises appropriate oversight of the limited fiscal
agent.

•

When providers are paid by a managed care entity or entities for services that
are included in the state’s contract with the entity, the waiver specifies how
providers are paid for the services (if any) not included in the state’s contract
with managed care entities.

Item I-3-c: Supplemental or Enhanced Payments
Instructions

Indicate whether supplement or enhanced payments are made to the providers of waiver services.
If they are, then provide the additional information specified.
Technical Guidance

A supplemental or enhanced payment is a payment for waiver services that is in addition to the
amount billed by the provider for a service. §1902(a)(30)(A) of the Act requires that payments for
Medicaid services be consistent with efficiency, economy, and quality of care. §1903(a)(1) of the
Act provides for FFP to states for expenditures for services under an approved state plan/waiver.
If any additional payments are made, describe (a) the nature of the supplemental or enhanced
payments that are made and the waiver services for which these payments are made; (b) the types
of providers to which such payments are made; (c) the source of the non-federal share of the
supplemental or enhanced payments; and, (d) whether providers eligible to receive the
supplemental or enhanced payment must be able to retain 100% of the total computable
expenditure claimed by the Medicaid agency to CMS. An example of a type of payment that might
be classified as a supplement or enhanced payment is the payment of a performance incentive. For
the purpose of this item, payments that are made to providers as adjustments to interim payment
rates or for reconciliation purposes are not considered supplemental or enhanced payments. When
supplemental or enhanced payments are made, the state must furnish CMS upon request detailed
information about the total amount of supplemental or enhanced payments to each provider type
in the waiver
§1915(c) Waivers that Operate with Concurrent Managed Care

In the case of a §1915(c) waiver that operates with a concurrent Medicaid managed care authority,
the managed care authority might provide for payments in addition to the monthly capitation rate
based on performance or other factors. If so, select the “yes” response and reference the applicable
provisions of the managed care authority.

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CMS Review Criteria
When supplement or enhanced payments are made:
•
•
•
•
•

The waiver specifies the nature of the payments that are made and the waiver services for
which these payments are made;
The types of waiver providers that receive such payments.
The waiver specifies the source of the non-federal share of the supplemental or enhanced
payments.
The waiver specifies that providers eligible to receive the supplemental or enhanced
payment must be able to retain 100% of the total computable expenditure claimed by the
Medicaid agency to CMS.
The basis of such payments is transparent (i.e., it is clear to the public which providers
would receive the additional payments and under what circumstances).

Item I-3-d: Payments to State or Local Government Providers
Instructions

Indicate whether payment is made to state or local government providers for the provision of
waiver services. If so, specify the state or local government providers that receive payment and
the waiver services that they furnish. Also, complete Item I-3-e.
Technical Guidance

State or local governmental entities may furnish waiver services, provided that they meet the
pertinent provider qualifications. A state may not limit the provision of any waiver service
solely to state or local government providers.
CMS Review Criteria
When state or local government providers furnish waiver services, the waiver specifies the
types of entities that furnish services and the services that they furnish.
Item I-3-e: Amount of Payment to State or Local Government Providers
Instructions
When payment is made to state or local government providers for the provision of waiver services,
indicate whether state or local government providers are paid the same amount as other providers
of the same service. If not, then indicate whether payments to state or local government providers
in the aggregate exceed their reasonable costs of providing waiver services. States must describe
in this section how the state recoups the excess and returns the federal share of the excess to CMS
using the quarterly expenditure report.
Technical Guidance
Medicaid payments to state or local government providers are subject to an additional test when
the amount paid to a state or local government provider differs from the amount paid to other
providers of the same service. Specifically, the aggregate payments to state or local government
providers (including regular and supplemental or enhanced payments) that exceed their reasonable
costs of furnishing a service would be an area of significant interest during CMS’ review and
would likely require additional information.
Payments to state or local government providers may differ from payments to other providers when
the payment amount itself is based on the reasonable costs that state or local government providers
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incur in furnishing the service. Select the second choice when payments are based on a
determination of reasonable costs.
Otherwise, the state must have in effect mechanisms to determine whether the aggregate payments
made to state or local government providers exceed their reasonable costs in furnishing waiver
services. When it is determined that aggregate payments exceed reasonable costs, the state must
recoup the excess payment and return the federal share of the excess payment to the federal
government within 60-days. Federal Medicaid funds may not be diverted to underwrite the costs
of state or local providers furnishing non-approved services or providing services to ineligible
individuals.
CMS Review Criteria
When the third choice is selected (when state or local government providers receive payments
that in the aggregate exceed the cost of waiver services), the waiver specifies:
• How the state recoups the excess and returns the federal share of the excess to CMS on
the quarterly expenditure report; and
• A satisfactory recoupment process.
Item I-3-f: Provider Retention of Payments
Instructions

Indicate whether providers receive and retain 100 percent of the total computable expenditure
claimed by the Medicaid agency to CMS for waiver services. In the case of a §1915(c) waiver
that operates with a concurrent managed care authority, select the second choice and indicate
whether managed care entities receive and retain 100 percent of the amount that the state claims
for capitation payments to such entities.
Technical Guidance

The amount claimed to CMS for waiver services must match the amount paid to waiver providers
less the application of any third party (e.g., Medicare) recoveries and additional adjustment
adjustments for co-pays or participant financial liability as determined through the post-eligibility
treatment of income process. In other words, the computable costs of waiver services must match
adjudicated provider billings less the foregoing adjustments. A state may not claim an amount that
exceeds the computable costs of waiver services. Provider payments may not be claimed but then
reduced in a manner that has the effect of reducing the non-federal share of waiver services,
including requiring that providers return some portion of their payments to the state. Claims to
CMS for FFP for waiver services must represent actual expenditures of public funds.
§1915(c) Waivers that Operate with Concurrent Managed Care

In the case of a §1915(c) waiver that operates with a concurrent Medicaid managed care authority,
indicate in the text field whether the capitation payments that are made to managed care entities
are reduced or returned to the state in a fashion that results in a disparity between the amount that
is claimed to CMS and the amounts actually paid to managed care entities. If so, describe the
methodology for reduced or returned payments and specify the use of the funds retained or returned
to the state.

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CMS Review Criteria
Waiver providers must receive and retain 100 percent of the total computable expenditure
claimed by the Medicaid agency to CMS.
Item I-3-g: Additional Payment Arrangements

This item addresses additional payment arrangements that may be employed for waiver services. Two of
these arrangements (reassignment of payment to a governmental agency and Organized Health Care
Delivery System) are recognized exceptions to the requirement contained in §1902(a)(32) of the Act that
prohibits state payments for Medicaid services to any entity other than the provider of the service.

Item I-3-g-i: Voluntary Reassignment of Payments to a Governmental Agency
Instructions

Indicate whether the state provides for the voluntary reassignment of payments for waiver services
and, if so, specify the governmental agency or agencies to which such reassignments may be made.
Technical Guidance
Under the provisions of 42 CFR §447.10(e), a provider may reassign the payment for waiver
services to a governmental agency. This provision is a recognized exception to the requirement
contained in §1902(a)(32) of the Act that prohibits state payments for Medicaid services to any
entity other than the provider of a service. Reassignment is typically employed when a
governmental agency pays a provider for a service and reassignment is used to permit the
governmental agency to recover its outlay. Reassignment arrangements must be voluntary on the
part of the provider and the state must provide for the payment to providers who elect not to
reassign payment. Reassignment is described further in the December 20, 1993 State Medicaid
Director included in Attachment D to the Instructions.
Item I-3-g-ii: Organized Health Care Delivery System
Instructions

Indicate whether the waiver employs OHCDS arrangements. If so, in the text field provide the
additional information specified in the item.
Technical Guidance

Waiver services may be provided by an Organized Health Care Delivery System (OHCDS), as
defined in 42 CFR §447.10. An OHCDS must provide at least one Medicaid service directly
(utilizing its own employees) and may contract with other qualified providers to furnish other
waiver services. When an OHCDS arrangement is used, the required Medicaid provider agreement
is executed between the state and the OHCDS. Since the OHCDS acts as the Medicaid provider,
it is not necessary for each subcontractor of an OHCDS to sign a provider agreement with the
Medicaid agency. However, subcontractors must meet the standards under the waiver to provide
waiver services for the OHCDS. The use of an OHCDS arrangement does not alter fundamental
waiver requirements with respect to provider qualifications or service standards.
When an OHCDS arrangement is used to provide waiver services, payment is made directly to the
OHCDS and the OHCDS reimburses its subcontractors. Waiver providers may not be required to
affiliate with an OHCDS. Such an arrangement must be voluntary and the state must provide for
entering into a provider agreement with providers that elect not to affiliate with an OHCDS.
Moreover, waiver participants may not be required to secure services exclusively through an
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OHCDS. Additional information concerning OHCDS arrangements is contained in the December
20, 1993 State Medicaid Director letter located in Attachment D to these instructions.
When a waiver provides for participant direction of services and financial management services
are furnished as a waiver service (rather than as an administrative activity), entities that furnish
financial management services may be designated as an OHCDS (by virtue of the fact that their
employees furnish a waiver service). Designation of financial management services providers as
OHCDS entities may facilitate contracting for and purchase of participant-directed services.
When OHCDS arrangements are employed, the waiver must specify:
• The entities that are or may be designated as an OHCDS and how these entities qualify for
designation as an OHCDS;
• The procedures for direct provider enrollment when a provider does not voluntarily agree
to contract with a designated OHCDS. Again, it is important to keep in mind that providers
may not be mandated to contract with an OHCDS;
• The method(s) for assuring that participants have free choice of qualified providers when
an OHCDS arrangement is employed. Participants must be able to select any qualified
provider that has contracted with the OHCDS or select a provider that has not contracted
with the OHCDS;
• The method(s) for assuring that providers that furnish services under contract with an
OHCDS meet applicable provider qualifications under this waiver. The use of an OHCDS
arrangement does not in any way negate the requirement that providers meet applicable
qualifications;
•
•

How the state assures that OHCDS contracts with subcontracted providers meet applicable
Medicaid requirements (e.g., the maintenance of necessary documentation for the services
furnished by the subcontractor); and
How the state assures financial accountability when an OHCDS arrangement is used. That
is, how the state ensures that the billings made by the OHCDS are valid. In addition,
describe how the flow of billings and payments between the state and the OHCDS and its
subcontractors must not result in excessive payments to the OHCDS.

When an OHCDS arrangement is employed, it may not be structured in a fashion that has the effect
of claiming administrative expenses as service expenses. For example, when an OHCDS entity
performs administrative activities, a state may compensate the OHCDS for such activities and
claim such costs at the appropriate administrative claiming rate and in accordance with the
approved cost allocation plan. In other words, the amount that the OHCDS is paid for the provision
of waiver services may not be diverted to administrative activities.
Similarly, the amount that an OHCDS bills for waiver services must match in the aggregate the
amount that it expends to provide services plus the amount that it pays its subcontractors. An
OHCDS may not retain excess payments and divert those payments to other uses.

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CMS Review Criteria
When a waiver employs OHCDS arrangements:
•
•
•
•
•
•

The state describes the types of entities that are designated as an OHCDS.
The state’s methods of designating entities to function as OHCDS are specified, and these
entities meet the regulatory definition of an OHCDS.
OHCDS arrangements preserve participant free choice of providers.
Waiver providers are not required to contract with an OHCDS in order to furnish services
to participants.
There are adequate safeguards to ensure that OHCDS subcontractors possess the required
qualifications.
The OHCDS arrangement provides for appropriate financial accountability safeguards.

Item I-3-g-iii: Contracts with MCOs, PIHPs or PAHPs
Instructions

Indicate whether the state contracts with MCOs, PIHPs, or PAHPs to furnish waiver services. If
so, specify whether such contracts fall under the authority of §1915(a)(1) of Act or are entered into
under the provisions of a managed care/§1915(c) concurrent waiver. When the state does not
contract with managed care entities to furnish waiver services, select “not applicable.”
Technical Guidance

When a state contracts with managed care entities under the provisions of §1915(b)/§1915(c)
concurrent waiver, the §1915(b) waiver application will be reviewed by CMS to obtain
information about the types of entities with which the state contracts. In addition, state contracts
with managed care entities are subject to Regional Office review.
Under the provisions of §1915(a)(1) of the Act, a state may contract with a Managed Care
Organization (MCO), a prepaid inpatient health plan (PIHP) or prepaid ambulatory health plan
(PAHP) organizations (as defined in 42 CFR §438.2) to furnish waiver and other services to waiver
participants. Such organizations may furnish not only waiver services but also other services under
the state plan. Contracts with these organizations may be risk-based, provide for shared risk, or
be no-risk arrangements. The state may make capitated prepayments to these organizations.
Absent a concurrent §1915(b) waiver, waiver participants may not be required to obtain waiver
services through these organizations. Participants must have free choice in electing to enroll with
a health plan to obtain waiver or other services or to obtain services from other waiver providers
not affiliated with the health plan.
MCO, PIHP and PAHP contracts entered into under the provisions of §1915(a)(1) are subject to
separate CMS review. This 1915(c) waiver application itself does not provide the authority for a
state to contract with such organizations. When managed care entities are used to furnish waiver
services under the provisions of §1915(a)(1), specify (a) the geographic areas served by these
organizations; (b) the waiver and other services furnished by these organizations; and, (c) how
payments are made to organizations.

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CMS Review Criteria
When waiver services are furnished by managed care entities under the provisions of
§1915(a)(1) that provide for the voluntary enrollment of waiver participants, the waiver
specifies:
•
•
•

The geographic areas served by these organizations.
The services furnished by these organizations.
How payments are made to organizations.

APPENDIX I-4: Non-Federal Matching
Funds

Overview

In this section, the sources of the non-federal share (e.g., matching funds) of computable waiver
costs must be delineated. “Computable waiver costs” means adjudicated payments that have been
made to waiver providers less any adjustments that change the cost of the service to Medicaid
(e.g., the liability by another party for part of the cost of care, such as co-pays indicated in
Appendix I-7, or third party (e.g., Medicare) obligations). Only computable waiver costs may be
claimed for federal financial participation. The non-federal share of computable waiver costs must
be provided exclusively by the state or by the state and local governmental entities (e.g., counties),
as provided in 42 CFR §433.51.
The Appendix requires the identification of the sources of the non-federal share provided by the
state and, if applicable, localities. In each case, the sources are broken down into various
subcategories. Terms used in this Appendix are defined as follows:
Intergovernmental Transfer (IGT) means funds are transferred from another state agency or a local
government entity to the Medicaid agency to be utilized as the non-federal share. For example, if
funds are appropriated to a state’s developmental disabilities agency that operates the waiver but
provider billings are paid using the MMIS system at the Medicaid agency, the developmental
disabilities agency may make an intergovernmental transfer to the Medicaid agency to provide the
non-federal share. Similarly, if local government entities are obligated to provide all or a portion
of the non-federal share, they may meet this obligation by transferring funds to the Medicaid
agency.
Certified Public Expenditure (CPE) means that a state or local government agency expends funds
(i.e., pays providers for waiver services or directly incurs expenses for services furnished by the
entity) and submits the total amount expended to the state Medicaid agency. For example, a county
may be responsible for 20% of the costs of waiver services. The county pays providers of waiver
services using county funds and submits the amount of its total computable payments to the state
Medicaid agency. The Medicaid agency would submit the CPE to CMS and FFP would be
available as a percentage of the total computable cost of the service. The Medicaid agency payment
to the county would be the federal share of the county waiver costs funded through CPEs. The
state Medicaid agency would make payment to the county for the remaining 80% of the
computable costs of waiver services whereby the non-federal share is derived from other state
sources (e.g., appropriations to the state Medicaid agency or an IGT from another state agency).

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It is permissible for local government resources to constitute a portion of the non-federal share of
waiver computable costs, as provided in 42 CFR §433.53(b). However, in accordance with 42
CFR §433.53(c)(2), whenever a state provides for local financial participation in the costs

Detailed Instructions for Completing Appendix I-4

Item I-4-a: State Government Level Source(s) of the Non-Federal Share of Computable Waiver Costs
Instructions

Select the applicable state sources of the non-federal share of computable waiver costs. Where
specified, provide the additional information about these sources.
Technical Guidance

State sources of the non-federal share may include:
• The direct appropriation of state tax revenues to the State Medicaid agency;
• State tax revenues appropriated to another state agency that are transferred to the state
Medicaid agency via IGT or are certified as expenditures (CPE). When the source of the
non-federal share is another state agency, specify the state agency or entity to which the
appropriation is made, the underlying sources of revenue of the funds that are transferred
(e.g., state tax revenues), and describe in detail the mechanism (IGT or CPE) that is utilized
to transfer the funds to the Medicaid agency; and,
• If there are other state level source(s) of funds other than the appropriation of state tax
revenues, specify in detail: (a) the source of funds (e.g., program revenues, provider fees
(but not taxes)); (b) the state entity or agency that receives the funds; and, (c) the
mechanism (IGT or CPE) that is employed to transfer and/or certify the funds to the
Medicaid agency. Also specify any matching arrangement (e.g., whether the funds fully
provide for the non-federal share or only a portion of the non-federal share).
CMS Review Criteria
When the non-federal share is from sources other than the direct appropriation of state tax
revenues to the Medicaid agency:
• The state-level sources of the non-federal share of computable waiver costs are specified.
• When funds are transferred from another state agency or other funds are used for the nonfederal share, the underlying sources of these funds meet applicable federal requirements.
• When IGTs or CPEs are used, the mechanism used to transfer funds to the state Medicaid
agency or verify the expenditures are specified and meet federal requirements.
• When CPEs are utilized, the criteria must be consistent with I-2-c.
Item I-4-b: Local Government or Other Source(s) of the Non-Federal Share of Computable Waiver
Costs
Instructions

If local government entities do not provide any part of the non-federal share through IGT or CPE,
select not applicable. If local governments provide a portion of the non-federal share, select one
or both of the next two responses and provide the information requested.
Technical Guidance

When local government entities provide a portion of the non-federal share, provide the following
as applicable:
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•

•

Appropriation of Local Government Revenues. When the funds provided by local
government are local tax revenues, specify the governmental body that levies taxes that
underwrite the non-federal share, the sources of revenue that are utilized as the non-federal
share, and the mechanism (IGT) or (CPE) for transferring and/or certifying funds to the
Medicaid agency. Include a citation for any applicable state laws concerning the provision
of local funds to the state to meet the non-federal share of computable waiver costs.
Other Local Government Sources. If there are local government sources of funds other
than local tax revenues that are used to meet the non-federal share of computable waiver
costs, specify the source(s) of these funds, the local government entity or agency that
receives these funds, and the mechanism (IGT or CPE) used to transfer and/or certify funds
to the Medicaid agency.

CMS Review Criteria
When there are local government sources of the non-federal share:
• The local government sources of the non-federal share of computable waiver costs are
specified.
• When local tax funds are transferred by local governments or other funds are used for the
non-state federal share, the underlying sources of these funds meet applicable federal
requirements.
• When IGTs or CPEs are used, the mechanism used to transfer funds to the state Medicaid
agency or verify the expenditures are specified and meet federal requirements.
• When CPEs are utilized, the criteria must be consistent with I-2-c.
Item I-4-c: Information Concerning Certain Sources of Funds
Instructions

Indicate whether any of the sources of funds listed make up any part of the non-federal share of
computable waiver costs. If any are used, describe the source of funds in detail.
Technical Guidance

Health Care-Related Taxes. The levying of health care-related taxes to meet the non-federal
share of Medicaid costs is controlled by the regulations at 42 CFR §433.55 et seq. Waiver services
are not among the classes of services for which a broad-based provider tax may be levied.
Provider-Related Donations. Provider-related donations are considered a permissible source of
the non-federal share of the computable costs of waiver services to the extent that such donations
comply with the provisions of 42 CFR §433.54 concerning bona fide provider-related donations.
Federal Funds. In general, federal funds regardless of source may not be used to meet the nonfederal share of computable waiver costs. One exception has been the CMS- approved use of Real
Choice Systems Change grant funds in some instances to meet the non-federal share of Medicaid
services furnished under the auspices of a grant. Only when there is specific authorization in
federal law may federal funds be used for the non-federal share.

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CMS Review Criteria
Only permissible sources may be utilized to fund the non-federal share.

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

Overview

42 CFR §441.310(a)(2) prohibits making Medicaid payments for room and board (i.e., housing,
food, and utility costs) except when the participant is receiving respite outside of a private
residence in a facility approved by the state or when the participant requires a live-in caregiver
(addressed in Appendix I-6). For purposes of this provision, the term “board” means three meals
a day or any other full nutritional regime. Medicaid payments may be made for a meal provided
to a person in a day activity such as adult day health services. The state must assure CMS that
payments are not made for room and board except as explicitly allowed in 42 CFR §441.310(a)(2).
When waiver services are provided in residential settings that are not the participant’s own home
or the family home, the state must describe the methodology that is employed to exclude the costs
of room and board from the payments for the services furnished in such living arrangements (i.e.,
ensure that payment is only made for the service component).

Detailed Instructions for Completing Appendix I-5
Item I-5-a: Services Furnished in Residential Settings

Instructions
Select whether waiver services are furnished in residential settings other than the participant’s own private
residence. If so, complete Item I-5-b. Otherwise, do not complete I-5-b.

Item I-5-b: Method for Excluding the Cost of Room and Board Furnished in Residential Settings
Instructions
In the text field, describe the methodology that is used to exclude Medicaid payment for room and board in
residential settings.
Technical Guidance
Acceptable methods to exclude the costs of room and board may include separating room and board costs
from service costs in determining payment rates or basing payments solely on service costs.

CMS Review Criteria
The methodology that is employed assures that the costs of room and board have been isolated and
excluded from payments for services in applicable residential settings.

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APPENDIX I-6: Payment for Rent and Food
Expenses of an Unrelated Live-In Caregiver
Overview
Section 4741(a) of the Omnibus Budget Reconciliation Act of 1990 amended §1915(c)(1) of Act
to provide that the room and board exclusion does not include an amount established by the state
to reflect the portion of costs of rent and food attributable to an unrelated personal caregiver who
resides in the same household with a participant who requires a live-in caregiver. Regulations
concerning this provision are located at 42 CFR §441.310(a)(2)(ii). Unrelated is defined as
someone who is unrelated by blood or marriage to any degree. A personal caregiver provides a
covered waiver service (as specified in the waiver) to meet the participant’s physical, social, or
emotional needs (as opposed to services not directly related to personal care giving, i.e.,
housekeeping or chore services). When a waiver service is provided by an unrelated, live-in
personal caregiver, FFP is available to compensate the waiver recipient for the additional costs
he/she may incur for the rent and food for such caregiver. Under Medicaid and §1634 and SSI
criteria rules, in order for the payment not to be considered income to the recipient, payment for
the portion of the costs of rent and food attributable to an unrelated live-in personal caregiver must
be routed through the provider specifically for the reimbursement of the waiver participant. FFP
for live-in caregivers is not available in situations when the participant lives in the caregiver's home
or a residence owned or leased by the provider of waiver services.
This provision does not provide an exception to other Medicaid requirements resulting in a change
in the way an individual's income may be counted in determining Medicaid eligibility or allow
payment to a participant rather than a provider of service.
In the application, live-in caregiver is treated as a waiver service and must be included in the list
of services contained in Appendix C-1 and specified in Appendix C-3. The costs of live-in
caregiver must be broken out separately in Appendix J-2 in the computation of Factor D.

Completion of Appendix I-6
Instructions
Select whether the waiver provides for the payment of the rent and food expenses of an unrelated caregiver.
If so, explain: (a) the method that is used to apportion the additional costs of rent and food attributable to
the unrelated live-in personal caregiver that are incurred by the individual served on the waiver and (b) the
method used to reimburse these costs that routes payment through the provider.
Technical Guidance
Any reasonable method may be employed to apportion the cost of rent and food, subject to CMS review
and approval, so long as the method is based on the costs incurred by the participant. Reimbursement to
the participant must be made by the provider (e.g., passed along by the provider to the participant).

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CMS Review Criteria
When payment is made for the rent and food expenses of an unrelated caregiver:
• The apportionment method used should provide that only the additional rent and food
costs to the participant associated with having a live-in caregiver are reimbursed.
• Only costs incurred by the participant are reimbursed.
• The method of making payment for live-in caregiver must route the payment through the
provider but clearly provide for the reimbursement of the participant.

APPENDIX I-7: Participant Co-Payments
for Waiver Services and Other Cost Sharing
Overview
In this Appendix, the state specifies whether it imposes co-payments on waiver services (in Item
I-7-a) or imposes other cost-sharing arrangements associated with participation in a waiver (in
Item I-7-b). The imposition of co-payments or other cost sharing are governed by the provisions
of §1916 and §1916A of the Social Security Act. The amount of these charges that may be
imposed is subject to federal limits. As described at 42 CFR 447.51 through 447.57, states have
flexibility to impose cost sharing for most covered services. In general, cost sharing is limited to
nominal amounts (approximately $4 or less), but states have flexibility to charge higher cost
sharing to individuals with income above 100% of the federal poverty level.
Any nominal cost sharing is generally applicable to all Medicaid beneficiaries, except those
specifically exempted by statute or regulation. States have the option to exempt HCBS waiver
recipients from all cost sharing, if they are subject to the post-eligibility treatment of income
requirements. And because section 1915(c) of the Social Security Act provides for a waiver of
comparability, states may exempt additional individuals beyond those specifically exempted in
statute and regulation.
When co-payments are imposed, no provider may deny services to an individual who is eligible
for the services on account of the individual's inability to pay the cost sharing unless the person’s
income exceeds 100% of poverty and the state elects to permit the provider to enforce the costsharing. In addition, when a co-payment is imposed, the amount of the co-payment must be
deducted in determining the amount of the computable claim for FFP regardless of whether the
participant actually made the co-payment. Co-payments are considered to have been collected by
the provider regardless of whether the participant makes an actual payment to the provider.
The post eligibility treatment of income process which determines the individual’s patient liability
(if any) does not fall under the cost sharing requirements specified at §1916 and §1916A of the
Social Security Act. Therefore, post eligibility is not included in Appendix-I. Post eligibility
treatment of income is included in Appendix B-5 of the waiver application.

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Detailed Instructions for Completing Appendix I-7
Both items I-7-a and I-7-b must be completed.

Item I-7-a: State Requirement for Co-pays
Instructions
Indicate whether co-payments or similar charges are imposed on waiver participants for one or more waiver
services. If no co-payments are charged, proceed to Item I-7-b. If co-payments are charged, complete the
remaining items before proceeding to Item I-7-b.

Item I-7-a-i: Co-Pay Arrangement
Instructions
Specify the type of charge that is imposed on waiver participants.
Technical Guidance
Charges may include a nominal deductible, co-insurance, co-payment or other similar charge. If another
type of charge is imposed, it must be described in detail. Typically, if a charge is made, it usually takes the
form of a co-payment (i.e., a fixed charge per unit of service).

Item I-7-a-ii: Participants Subject to Co-pay Charges for Waiver Services
Instructions
Specify the groups of waiver participants who are subject to co-payment.
Technical Guidance
As described at 42 CFR §447.56 specific groups of individuals are exempt from all cost sharing charges.
For example, children up to the age of 18 (or up to age 19, 20 or 21 at the option of the state) are excluded
from all cost sharing, with certain exceptions. Because section 1915(c) of the Social Security Act allows
for a waiver of comparability, states may exempt additional groups of waiver participants.

Item I-7-a-iii: Amount of Co-Pay Charges for Waiver Services
Instructions
Specify each waiver service for which a co-payment charge is made, the amount of the charge, and the basis
of the charge.
Technical Guidance

In the case of waiver participants with incomes less than 100% of federal poverty level, the amount
of the co-payment charge may not exceed the maximum amounts described in 447.52(b) . Express
the amount of the charge on a per-unit basis (e.g., $1.50/ visit). Persons with incomes in excess of
100% of federal poverty level may be charged cost sharing of up to 10% of the cost of the service
and those with incomes above 150% of federal poverty level may be charged cost sharing of up to
20% of the cost of the service. If different charges are made to one or both of these higher income
groups, specify those charges and specify the basis of the charge. The basis may be the waiver’s
standard, fixed fee payment schedule for the services subject to co-payment.
Item I-7-a-iv: Cumulative Maximum Charges
Instructions

Specify whether there is a cumulative maximum amount of co-payments that may be charged to a
waiver participant. When there is a maximum, specify the amount and the period (e.g., month,
quarter) to which the maximum applies.
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Technical Guidance

Per 42 CFR §447.54(d), the waiver may specify a cumulative maximum amount of co-payments
(e.g., no more than $10 per month). When the participant is subject to co-payments for other state
plan services, the state may apply the maximum amount provided under the state plan for all
Medicaid services.
Item I-7-b: Other State Requirement for Cost Sharing
Instructions
Select whether the state imposes a premium, enrollment fee, or similar charge on waiver
participants. If so, describe the arrangement in detail.
Technical Guidance
42 CFR §447.55 allows states to impose premiums, enrollment fees or other similar charges on
individuals with income above 150% of poverty. Under a premium arrangement, the recipient must
make a fixed, periodic payment (as opposed to a co-payment which is imposed on a per service
basis). Indicate whether there is such an arrangement associated with the waiver. If so, specify in
detail:
•
•
•

•

The type of arrangement;
The amount of the charge;
The groups of participants who are subject to the charge and the groups excluded in
compliance with 42 CFR §447.56.
The groups who are excluded must
include all individuals described in 42 CFR §447.56; and may include additional groups of
waiver participants,
The mechanisms for the collection of charges and reporting the amount collected on the
CMS 64. Premium and cost sharing amounts must be applied to reduce the computable
claim for federal financial participation.

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CMS Review Criteria
The cost sharing arrangement complies with the applicable requirements contained in 42 CFR
§447.50 et seq.
When the state imposes a premium, enrollment fee, or similar charge on waiver participants,
the state has specified:
• The type of charge
• The amount of the charge
• The groups of participants who are subject to the charge and the groups excluded- this
must comply with 42 CFR 447.56.
• For each waiver service for which a co-payment is made, the amount and basis of the
charge. The amount of the co-payment charge may not exceed the schedule of
allowable charges contained in 42 CFR §447.54(a)(3) that establishes maximum
charges based on the cost of a service.
• Whether there is a cumulative maximum amount of co-payments that may be charged
to a waiver participant?
• The mechanisms for the collection of charges and reporting the amount collected on
the CMS 64. Premium and cost sharing amounts must be applied to reduce the
computable claim for the federal financial participation.

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Appendix J: Cost Neutrality Demonstration
Brief Summary
In order for a waiver to be approved, the state must demonstrate to the satisfaction of CMS that
the waiver is cost neutral during each year that the waiver is in effect. In this Appendix, the cost
neutrality of the waiver is demonstrated. The Appendix has two components:
• Appendix J-1 provides a composite overview of the demonstration that the waiver is cost
neutral
• Appendix J-2 contains the basis of the estimates of the factors that make up the cost
neutrality demonstration

Cost Neutrality Formula
§1915(c)(2)(D) of the Act requires that the state assure that the average per capita expenditure
under the waiver during each waiver year not exceed 100 percent of the average per capita
expenditures that would have been made during the same year for the level of care provided in a
hospital, nursing facility, or ICF/IID under the state plan had the waiver not been granted.
42 CFR §441.302(e) requires that the expenditures upon which the cost neutrality demonstration
is based be reasonably estimated and well documented and that the estimate must be annualized
and cover each year of the waiver period.
The equation set forth in 42 CFR §441.303(f)(1) specifies the components of the cost neutrality
demonstration. This equation is:
D+D′ ≤ G+G′.
Where:
• The symbol ‘‘≤’’ means that the result of the left side of the equation must be less than or
equal to the result of the right side of the equation.
• D = the estimated annual average per capita Medicaid cost for home and community-based
services for individuals in the waiver program.
• D′ = the estimated annual average per capita Medicaid cost for all other services provided to
individuals in the waiver program.
• G = the estimated annual average per capita Medicaid cost for hospital, NF, or ICF/IID
care that would be incurred for individuals served in the waiver, were the waiver not
granted.
• G′ = the estimated annual average per capita Medicaid costs for all services other than those
included in factor G for individuals served in the waiver, were the waiver not granted.
This equation takes into account both waiver services (factor D) and institutional costs (factor G)
as well as the costs of furnishing other Medicaid services to waiver participants (factor D′) and the
non-institutional Medicaid costs for persons receiving institutional care (factor G′). For purposes
of the equation, the prime factors (D′ and G′) include the average per capita cost for all state plan
services and expanded Early & Periodic Screening, Diagnosis and Treatment (EPSDT) services
(when the waiver covers children) that have been utilized but not accounted for in other formula
values. Costs associated with the waiver that are claimed for administrative FFP, are not
included in the formula.
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Also, for purposes of this equation the term “per capita cost” means estimated expenditures during
each year of the waiver divided by the number of unduplicated service recipients during each
waiver year. The estimates of per capita costs may not be based on an estimate of the number of
“full year equivalents” who will be served each year.
Factor D in the equation is derived from the estimates of service utilization and costs in Appendix
J-2-d (discussed below). Factor D′ is estimated using experience from previous waiver periods
(renewal applications) or other sources of information (in the case of a new waiver application).
Factor G is estimated based on the costs of institutional services for the specific level(s) of care
specified in the waiver. Factor G′ is estimated based on the costs of other Medicaid services
furnished to individuals who receive institutional services for the specific level(s) of care specified
in the waiver. The basis for the estimates of each of these factors were derived is described out in
Appendix J-2-c.
For waivers that cover individuals with a particular diagnosis or condition, states may utilize
target-group specific data. For example, in estimating cost for waiver participants, a state may
estimate the average per capita expenditure for the targeted individuals without including
expenditures of other individuals (not meeting targeting criteria) who are inpatients of the
institutional comparison group. If target-group specific data is used, cost/utilization data
documenting how the state’s estimates were derived must be included with the waiver application
(i.e., a claims summary listing to document the average per capita institutional expenditure for the
target population). This documentation is provided in Appendix J-2-c.
Once the waiver is approved, the state must annually submit financial and statistical information
to CMS concerning each equation factor and, in the case of factor D, detailed information
concerning service utilization and costs for each service included in the waiver. This information
is submitted via Form CMS-372(S). Instructions for this form are located in the State Medicaid
Manual (At 2700.6: Annual Report on Home and Community-Based Services Waivers). Please
note that functions that are provided as an administrative activity must be done so in accordance
with the approved cost allocation plan. The cost allocation plan is not approved via the 1915(c)
application.

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

This Appendix provides an overview of the cost neutrality demonstration for each waiver year.

Detailed Instructions for Completion of Appendix J-1
Instructions

In the row captioned “level(s) of care,” specify the level or levels of care for which the waiver
serves as an alternative (as specified in Item 1-F of the Application). For each year the waiver will
be in effect, insert the appropriate values for each cost neutrality formula factor into the table.

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Technical Guidance

When a waiver serves individuals at more than one level of care (e.g., nursing facility and hospital),
the estimates of Factors D', G, and G' that are inserted into the table are the weighted average of
each factor (Note: Factor D is estimated across all waiver participants and, thereby, already is a
weighted average). A weighted average is calculated as follows:
•

•
•

For each level of care, calculate the total estimated expenditures associated with each factor
for each waiver year. Total estimated expenditures are calculated by multiplying the levelof-care estimate of the formula value for the waiver year by the unduplicated number of
individuals who are expected to utilize the services associated with the formula factor;
Sum the total estimated expenditures for the formula factor for the waiver year; and,
Divide the sum of total expenditures by the sum of the total unduplicated number of
individuals who are expected to utilize the services associated with the formula factor.

Level of Care

Factor G Estimate

# of Users

Total Expenditures

Level of Care 1

$30,000

100

$3,000,000

Level of Care 2

$60,000

100

$6,000,000

N/A

200

$9,000,000

Weighted Average ($9,000,000/200)

$45,000

Total

The underlying calculations of the weighted averages of the formula factors are not submitted with
the waiver application. However, the work sheets containing these calculations must be available
to CMS upon request through the Medicaid agency and/or the operating agency (if applicable).
When a waiver encompasses more than one level of care, it is not required that the waiver be cost
neutral at each level of care so long as it is cost-neutral on a composite basis.
The CMS-372(S) report requires reporting each cost neutrality formula factor by level of care and
on a composite, weighted average basis.

CMS Review Criteria
• The data makes sense and aligns across the waiver years.
• The waiver is cost neutral each waiver year.

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Appendix J-2 - Derivation of Estimates
Overview

In this Appendix, information is provided about how the estimate for each cost neutrality formula factor
has been derived. The Appendix also provides for showing the detailed estimate of Factor D.

Detailed Instructions for Completing Appendix J-2
Item J-2-a: Number of Unduplicated Participants Served
Instructions

In Table J-2-a, insert the total number of unduplicated individuals who will receive waiver services
during each year the waiver is in effect. This number must match the corresponding figures in
Table B-3-a in Appendix B-3. In the web-based application, the two tables are linked to ensure
consistency. When a waiver serves individuals at more than one level of care, show the breakdown
of waiver participants by level of care in the table, noting each level of care in the column heading.
Technical Guidance

The total number of unduplicated waiver participants who will be served each year the waiver is
in effect is an essential element in calculating Factor D in the cost neutrality formula. The figures
included in this table must match the corresponding figures in the year-by-year estimates of Factor
D that are derived in Item J-2-d. When a waiver serves individuals at more than one level of care,
the sum of the two right hand columns must equal the total in column headed “total unduplicated
number of waiver participants.”
CMS Review Criteria
The unduplicated count aligns and makes sense across the waiver years.

Item J-2-b: Average Length of Stay
Instructions

In the text field, describe the basis of the estimate of the average length of stay on the waiver by
participants in Item J-2-d.
Technical Guidance

Average length of stay (ALOS) is a statistic that describes the number of days on average during
a waiver year that an individual participates in the waiver. ALOS can be affected by a variety of
factors, including participant turnover (the entry and exit of individuals from the waiver) and the
phase-in or phase-out of the waiver. ALOS is calculated by dividing the total number of “enrolled
days” of all waiver participants by the unduplicated number of participants. In the case of an
approved waiver, ALOS information is reported on CMS-372(S) report.
As noted previously, ALOS usually affects the calculation of Factor D in the cost neutrality
equation. For example, 220 daily units of a service such as adult day health would be provided to
participants who are continuously enrolled throughout the entire waiver year. However, if the
ALOS length of stay on the waiver is 292 days, then the expected utilization rate of adult day
health services per unduplicated participant would be 176 daily units (292/365 = O.8; 0.8 x 220 =

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176). As a general matter, ALOS must be factored in when estimating the utilization of each
waiver service in the calculation of Factor D.
In response to this item, describe the basis of the ALOS estimate that is included in the estimate
of Factor D tables in item J-2-d. The basis of the estimate may be based on:
CMS 372(S) Data. In the case of a waiver renewal, the ALOS estimate may be based on
actual prior year experience. Indicate whether the estimate is based on CMS-372(S) data and
the year of the report. In the case of a waiver renewal, when the estimate departs from the
CMS-372(S) baseline data, explain the basis of the alternate estimate.
• Phase-In/Phase-Out Schedule. When waiver capacity is being phased-in or phased out,
ALOS is affected. For example, if capacity is being phased in, the ALOS estimate will
increase each waiver year until the phase-in is completed. If a phase-in/phase out schedule
is submitted along with the application (as Attachment #1 to Appendix B-3), that schedule
may serve as the basis of the ALOS estimate for the years affected by phase-in/phase-out.
Once the phase-in is completed, explain the basis of the ALOS estimate for the subsequent
waiver years.
• Experience in Similar Waivers. In the case of a new waiver, the ALOS estimate may be
based on experience in another waiver that the state (or another state) operates which serves
a similar target population.
• Alternative Basis. Especially in the case of a new waiver, the estimate may be based on the
experience of a state-funded program that serves a similar target group or from other data
sources. Provide a complete description of the information that was employed to estimate
the ALOS.
However, the ALOS estimate is derived, provide a complete description of the basis of the
estimate.
•

CMS Review Criteria
The state provided a complete description of the basis of the ALOS estimate.

Item J-2-c: Derivation of Estimates of Each Factor
In this item, the derivation for the estimates of each factor in the cost-neutrality formula is
specified. In the case of a renewal waiver (or a new waiver to replace an approved waiver), as a
general matter it is expected that the basis of the derivation of each factor will be the data that the
state has reported via the CMS-372(S) trended forward to reflect inflation adjustments. Departures
from the CMS -372(S) baseline must be explained and justified. For each factor derivation,
describe the source of baseline data used to calculate the factor, including the date from which the
baseline data represents. Describe the basis of growth trends or inflationary adjustments used,
including:
1) Data source used to obtain the trend or inflation rate
2) How the trend or inflation rate was calculated
3) If the growth trend is not based on CMS-372(S) data, why an alternate basis was used
When a renewal includes new services or modifications to current services, the estimates for these
services must be explained and justified.
For waivers that apply only to individuals with a specific illness or condition, estimates that are
based only on the particular group may be used. As necessary and appropriate, include
references to supporting documentation for how these values were derived. As necessary, CMS
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may request that the state supply the supporting documentation through the Medicaid agency
and/or the operating agency (if applicable).
Item J-2-c-i: Factor D Derivation
Instructions

In the text field, describe the basis of the estimates of Factor D.
Technical Guidance

The Factor D value is calculated by completing the tables contained in item
J-2-d. See also the instructions for completing Item J-2-d. Here, provide a complete explanation
of the how the values (except for ALOS and the unduplicated number of participants) contained
in that table were derived. In the case of a waiver amendment, if the state amends the cost estimate
table in Appendix J-2-d due to a change in Factor D, the state must also amend the Factor D
derivation in Appendix J-2-c to document the basis of the amended estimates.
The Factor D estimate is derived by estimating: (a) the unduplicated number of participants who
are expected to utilize each waiver service; (b) the number of units of services these participants
are expected to utilize during a waiver year (taking into account ALOS); and, (c) the expected
average unit cost of each waiver service. These elements lead to the calculation of the total
estimated cost for each waiver service. These service-by-service costs are summed and divided
by the total number of unduplicated waiver participants for the waiver year in order to estimate
Factor D.
The explanation of the derivation of the Factor D estimate must include the basis and methodology
used to calculate the estimates for: (a) the estimated number of service users; (b) the estimate of
the number of units/user; and, (c) the average per unit cost. In particular:
•

Estimated number of users. In the case of waiver renewals and amendments, this estimate
should be based on actual experience as reported via the CMS-372(S) (e.g., the percentage
of waiver participants who utilize a service), modified as appropriate to take into account
changes in the number of persons who will be served during the renewal period. If the
estimated number of users departs from the previous actual experience, explain and justify
the basis of the deviation.
In the case of new waivers or when additional services are being added in a waiver renewal
or an amendment, the explanation must detail the source of the information upon which the
estimate is based. The source may be a state study, utilization of similar services in other
waiver programs, or experience in other states that operate similar waivers.

•

Units/User. The utilization rate must be reasonably estimated based on needs of the target
population and the average length of stay. Again, for waiver renewals, this estimate should
start with the actual experience as reported via the CMS-372(S) as the baseline. If the
estimated number of units/user departs from the previous actual experience, explain and
justify the basis of the deviation.

•

In the case of new waivers or when additional services are being added in a waiver renewal,
the explanation must detail the source of the information upon which the estimate is based.
The source may be a state study, utilization of similar services in other waiver programs, or
the experience of other states that operate waivers that serve a similar target population and
offer comparable services.

•

Cost/Unit. For waiver renewals and amendments, this estimate should be based on actual
experience as reported via the most recently approved CMS-372(S). If the estimated number

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of users departs from the previous actual experience, explain and justify the basis of the
deviation.
In the case of new waivers or when additional services are being added in a waiver renewal,
the explanation must detail the source of the information upon which the estimate is based.
The source may be a state study, utilization of similar services in other waiver programs, or
experience in other states. The explanation must identify the factor or factors that were used
to trend unit costs forward across all waiver years. If a particular service has several intensity
levels or settings and associated unit costs, the explanation of the derivation of unit costs
should include information about each level (i.e., the derivation of the weighted average unit
cost included in the table in item J-2-d).
CMS reviews the estimates of unit costs with regard to the requirement that payments are
consistent with economy, efficiency, and quality of care. A state may be required to provide
additional justification if the amount of the payment appears to be excessive in light of
experience with waivers that provide similar services to like target populations.
Item J-2-c-ii: Factor D' Derivation
Instructions

In the text field, describe the basis of the estimates of Factor D'.
Technical Guidance

Factor D' is the estimated annual average per capita Medicaid cost for all services (state plan and
services required under EPSDT(when a waiver serves children)) that are furnished in addition to
waiver services while the individual is in the waiver. This calculation includes institutional costs
when a person leaves the waiver for the institution and returns to the waiver in the same waiver
year. If a waiver participant does not return to the waiver following institutionalization, do not
include the cost of institutional care under D'. Do not include institutional costs incurred before
the person is admitted into the waiver. If institutional respite care is provided as a service under
this waiver, calculate its costs under Factor D. Do not duplicate these costs in the calculation of
Factor D'. If a waiver service is covered under the state plan and the service is defined identically
except for utilization limits, the state plan service, up to the imposed limit, would be included
under D'. The services under the waiver that exceed the state plan utilization limits would be
included under factor D as waiver costs.
In the case of §1915(c) waivers that will operate with a concurrent Medicaid managed care
authority, include in factor D only the cost of capitation payments. Any additional services
provided by the managed care organization through savings or under §1915(b)(3) do not affect
factor D, since they are funded by the capitation payment. Additional services, if provided under
the managed care authority application out of the HCBS waiver capitation payment, are not
considered §1915(c) services and are not listed in the §1915(c) application.
Estimates of Factor D' must not include the costs of prescribed drugs that will be furnished
to Medicare/Medicaid dual eligibles under the provisions of Part D. Include an explanation
of how the D' value is derived. In general, the D' value must be greater than or equal to the G'
value. Typically, institutional payments encompass the costs of health care services that are
furnished to institutional residents and, therefore, included in Factor G. In the case of waiver
participants, most health care services are obtained via the state plan. If factor D' is less than factor

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G', provide an explanation of the reasons why this is the case. This situation may arise when
institutional payments do not encompass all services that are furnished to institutional residents
(for example, when the costs of day habilitation services furnished to ICF/IID residents are paid
for separately under the state plan). Factor D' may be computed using the CMS-372(S) or statistically

valid methods which are specified and submitted with the application. If the D' is developed through
sampling a comparable population, provide information on the process used and how the D' value was
derived.

Item J-2-c-iii: Factor G Derivation
Instructions
In the text field, describe the basis of the estimates of Factor G.
Technical Guidance

The Factor G value must reflect the average cost for the level(s) of institutional care that would
otherwise be furnished to waiver participants. Provide data ONLY for the level(s) of care indicated
in the waiver request. For waivers that apply only to individuals with a specific illness or
condition, estimates may be based on the institutional costs incurred for individuals with the
specific illness or condition. If institutional respite care is provided as a service under the waiver,
calculate its cost under Factor D. Do not duplicate these costs in the calculation of Factor G.
New Waivers

When cost-neutrality estimates are based on the comparison of community costs to institutional
costs and the state does not wish to base its estimate of institutional costs on the costs of serving
individuals with specific illnesses or conditions, the projected first year and subsequent year Factor
G values through the end of the waiver must be based on the actual costs of institutional services
for all individuals at the relevant level(s) of care for the most recent year for which such data are
available. These actual costs may be trended forward by applying inflation adjustments based on
the current Medical Consumer Price Index unless higher rates are justified or the state employs a
different basis for estimating future costs (e.g., observed state trends in the costs of institutional
services). Specify the source of the data upon which the estimate of Factor G is based and how
those costs are adjusted year-by-year.
When a waiver serves persons who have a specific illness or condition, derive Factor G (for each
level of care) from the following: (1) except as discussed below, trends shown by CMS-372(S) for
another waiver that serves a similar population at this level of care (specify the other waiver and
related CMS-372(S) form that was used and indicate any adjustments made to the numbers.); (2)
actual case histories of individuals institutionalized with the specified disease or condition at the
relevant level of care. When this method is used, describe the methods that were used to derive the
estimate of Factor G; (3) state DRGs for the disease(s) or condition(s) indicated in the request; or,
(4) other method (include a description). In the application, provide a complete explanation of
how the derivation of the estimate of Factor G.
Renewal Applications

In the case of renewal applications, when the Factor G figures reported via the CMS-372(S) were
the same as the figures in the approved waiver rather than actual costs, a state may not use the
CMS-372(S) as the basis of its estimate of Factor G for the renewal period, including the derivation
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of trend factors. Instead, the state must obtain and employ actual data for prior periods in order to
establish a revised baseline estimate of Factor G and the expected trend.
Item J-2-c-iv: Factor G' Derivation
Instructions

In the text field, describe the basis of the estimates of Factor G'.
Technical Guidance

Factor G' includes the cost of all other Medicaid services furnished while the individual is
institutionalized (including state plan and services required under EPSDT) and the cost of shortterm hospitalization (furnished with the expectation that the person would return to the institution).
When the waiver serves children, the G' value includes services required under EPSDT that are
not accounted for in the G value. In situations where a waiver will provide services to individuals
who, although requiring a NF level of care, are hospitalized because NF placement is not possible,
the actual cost of caring for these individuals in a hospital should be shown in G'. When
institutional respite care is provided as a service under this waiver, calculate its cost under Factor
D. Do not duplicate these costs in the calculation of Factor G'.
Explain how the G' value is derived, including any supporting documentation. The projected first
year G' value should not deviate substantially from previous year trends unless the state has altered
its Medicaid program. Inflation adjustments should reflect data in current Medicaid Consumer
Price Index unless other rates are justified.
In the case of waiver renewals, the estimate of Factor G' may be based on figures reported via the
CMS-372(S) only when the reported CMS-372(S) figures represented actual expenditures. If the
reported CMS-372(S) figures were the same as the figures in the approved waiver, a state may not
use the CMS-372(S) as the basis of its estimate of Factor G', including the derivation of trend
factors. Instead, the state must obtain and employ actual data for recent prior periods in order to
establish a revised baseline estimate of Factor G' and the expected trend.
Estimates of Factor G' must not include the costs of prescribed drugs that will be furnished to
Medicare/Medicaid dual eligibles under the provisions of Part D.

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CMS Review Criteria
• The state described the basis and the methodology used to determine the Factor D value
which is based on the estimated number of users, units/user, and cost/unit.
• If Factor D’ is not greater than or equal to Factor G’, the state provided an explanation for
this.
• If Factor D’ is developed through sampling a comparable population, the state has
provided information on the process used and how the D’ value was derived.
• The projected first year G’ value does not deviate substantially from previous year
trends unless the state has altered its Medicaid program.
For all cost-neutrality formula factors:
• The basis of all Factor estimates is fully documented, and estimates are evidence-based
and appropriately justified.
• Deviations from CMS-372(S) data are adequately explained, justified and documented.
•

The state’s factor D, D’, G and G’ derivation details the trend factors, including details of
the data sources, how factors were trended forward, and justification of using sources
outside of CMS-372(S) reports.

Item J-2-d: Estimate of Factor D
Instructions

Select whether the waiver operates concurrently with a §1915(b) waiver, or other Medicaid
authority utilizing capitated arrangements (i.e., 1915(a), 1932(a), Section 1937). If not, complete
the tables included in Item J-2-d-i. If so, complete the tables included in Item J-2-d-ii.
Technical Guidance

The two sets of tables are similar. However, in the case of managed care/§1915(c) concurrent
waivers, additional information must be provided (see below).
In the case of a waiver amendment, if the state amends the cost estimate table in Appendix J-2-d
due to a change in Factor D, the state must also amend the Factor D derivation in Appendix J-2-c
to document the basis of the amended estimates.
J-2-d-i: Non-Concurrent Waivers
The table must be completed for each year that the waiver is in effect. This table is auto-populated
by the entries in Appendices C-1/C-3. When a service listed in Appendix C-1 encompasses two
or more discrete services that are reimbursed separately, these component services must be shown
in the table. For example, if a state covers “day supports” but day supports is composed of day
habilitation, supported employment and community access services, each component of day
support must be listed and accounted for separately. When a service in Appendix C-1 is a bundled
service, each component of the service must be shown.
With respect to column 1, the unit of service (for example, day, hour, month, trip, etc.) must be
identified for each service. The unit should be descriptive of the service and not a generic term,
such as ‘unit’. With respect to column 3, keep in mind that the estimated number of units per user
must reflect the estimated ALOS rather than the potential maximum number of service units that
a participant may utilize. Partial units may not be used. See the State Medicaid Manual for
additional information on units of service.

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The average cost per unit (column 4) must be reasonably estimated. The estimate must be based
on expected payment rates for the service. When payment rates vary, the estimate should be based
on the expected mix of payment rates.
The figures in this table should follow these rules:
•
•
•
•

Average Number of Users. The average number of users must be expressed as a whole
number (i.e., 235 users not 234.8 users);
Average Number of Units per User. May be expressed as a whole number or in decimal
form.
Average Cost per Unit. Express in dollars and cents.
Total Cost. Total cost is expressed as the product of the average number of users, the average
number of units per user and the average cost per unit. Total cost is expressed in dollars and
cents.

The total cost is auto calculated based on the number of users, average number of units per user,
and average cost per unit.
CMS Review Criteria
• The unit of service is identified for each service.
• The estimated number of units per user reflect the estimated ALOS rather than the
potential maximum number of service units that a participant may utilize.
J-2-d-ii: Concurrent Waivers
The Factor D table for concurrent §1915(b)/§1915(c) waivers or other concurrent managed care
authorities utilizing capitated payment arrangements (i.e., 1915(a), 1932(a), Section 1937)
includes an additional column to indicate whether a waiver service is included in the capitation
rate paid to managed care entities or will be paid outside the capitation rate (i.e., the state will
make payment directly for the service). For waiver services included in the capitation rates paid
to managed care entities, states must indicate this by checking off the “Capitated” column in the
Appendix J-2-d-ii table.
When there are services paid outside the capitation rate, states must calculate the total of all waiver
costs and calculate separately the subtotals for services paid within the capitation rate and services
paid outside the rate. These estimates are calculated automatically. It also is necessary to calculate
the average cost per unduplicated participant for all waiver services and the average costs for
services paid within the capitation rate and outside the capitation rate. This information will be
employed by CMS in evaluating the cost-effectiveness of the §1915(b) waiver.
CMS Review Criteria
If there are services paid outside the capitation rate, the state has calculated:
o The total of all waiver costs,
o The subtotal for services paid within the capitation rate,
o The subtotal for services paid outside the rate,
o The average cost per unduplicated participant for all waiver services, AND
o The average costs for services paid within and outside the capitation rate.

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Glossary of Terms and Abbreviations

90-day Clock

The informal term for the ninety-day calendar period within which CMS must
approve or disapprove a state’s request to amend its State plan, initiate a new
waiver, renew a waiver, or amend a waiver. The 90-day clock begins on the date
that CMS receives the request from a state, either electronically or by other delivery
method.

§209(b) State

Refers to the statutory authority allowing states to have more restrictive financial
methodologies for the aged, blind, or disabled than those of the SSI program. States
electing this option may not use more restrictive standards than were in effect on
January 1, 1972 and must permit individuals to deduct incurred medical expenses
from income through Medicaid spenddown so that they may qualify for Medicaid.

300% of SSI Group

See Special Income Group

§435.217 Group

See Special Home and Community-Based Waiver Group

§1115 Research and
Demonstration Waiver

Research and demonstration programs that operate under waivers that are granted
under the provisions of §1115 of the Social Security Act to authorize experimental,
pilot, or demonstration project(s) that, in the judgment of the Secretary of Health
and Human Services are likely to assist in promoting the objectives of the Act,
including but not limited to Title XIX (the Medicaid statute) of the Act. The §1115
research and demonstration authority has been employed to implement alternative
approaches to the delivery of Medicaid services.

§1634 State

A state that has entered into a contract with the Social Security Administration
(SSA) under the provisions of §1634(a) of the Act for SSA to determine Medicaid
eligibility at the same time that eligibility for SSI benefits and/or Federallyadministered state supplementary payments is determined. In §1634 states, SSI
beneficiaries do not make a separate application for Medicaid.

§1915(b)

A provision of the Social Security Act that authorizes the Secretary of HHS to grant
certain waivers of Medicaid statutory requirements. The §1915(b) authority may be
used to: (a) mandate the enrollment of Medicaid beneficiaries into managed care
plans (§1915(b)(1)); (b) employ a central enrollment broker (§1915(b)(2)); (c) use
cost savings to provide additional services to enrollees (§1915(b)(3); and/or, (d)
limit the number of providers through selective contracting (§1915(b)(4)). Waivers
granted under the provisions of §1915(b) may be effective for a period of two years
and may be renewed for subsequent two-year periods.

§1915(b)/§1915(c)
Concurrent Waivers

Simultaneous use of the §1915(b) and §1915(c) waiver authorities may be used to
integrate delivery of home and community-based services with State plan services
in order to provide a coordinated array of services to beneficiaries. States also use
the §1915(b) authority to limit free of choice of provider while employing the
§1915(c) authority to provide the home and community-based services. A state can
implement a §1915(b)/§1915(c) concurrent waiver as long as all Federal
requirements for both waiver programs are met. Therefore, when submitting
applications for concurrent §1915(b)/(c) programs, a state must submit a separate
application for each waiver type and satisfy all of the applicable requirements under
each authority.

§1915(c)

The provision of the Social Security Act that authorizes the Secretary of HHS to
grant waivers of certain Medicaid statutory requirements so that a state may

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furnish home and community services to Medicaid beneficiaries who need a level
of institutional care that is provided in a hospital, nursing facility or Intermediate
Care Facility for Individuals with Intellectual Disabilities (ICF/IID).
§1915(g)(1)
§1915(i)
AAA

A provision of the Social Security Act that permits a state to furnish “targeted case
management services” under the State plan to groups of Medicaid beneficiaries
A provision of the Social Security Act enacted through the Deficit Reduction Act
of 2005 (DRA), that permits a state to furnish home and community services under
See Area Agency on Aging

Abuse

The infliction of injury, unreasonable confinement, intimidation, punishment,
mental anguish, sexual abuse or exploitation on an individual. Types of abuse
include (but are not necessarily limited to): (a) physical abuse (a physical act by an
individual that may cause physical injury to another individual); (b) psychological
abuse (an act, other than verbal, that may inflict emotional harm, invoke fear and/or
humiliate, intimidate, degrade or demean an individual); (c) sexual abuse (an act or
attempted act such as rape, incest, sexual molestation, sexual exploitation or sexual
harassment and/or inappropriate or unwanted touching of an individual by
another); and, (d) verbal abuse (using words to threaten, coerce, intimidate,
degrade, demean, harass or humiliate an individual).

Abuse Registry

An official, state-maintained listing of individuals who have been convicted of
abuse or found through a civil/administrative procedure to have committed abuse
against a person.

Accreditation

An evaluative process through which a provider organization undergoes an
examination of its policies, procedures and performance by a nationally recognized
external organization ("accrediting body") to determine that the provider meets
predetermined criteria.

Act

The Federal Social Security Act (42 U.S.C. §1396 et seq.)

Activities of Daily
Living (ADL)

Basic personal everyday activities that include bathing, dressing, transferring (e.g.,
from bed to chair), toileting, mobility and eating. The extent to which a person
requires assistance to perform one or more ADLs often is a level of care criterion.
See Activities of Daily Living
Necessary activities that are undertaken by a state to implement and operate its
Medicaid program, including complying with Federal administrative requirements.
Administrative activities include but are not limited to the payment of provider
billings, utilization management, and the operation of an MMIS.

ADL
Administration

Administrative FFP

The Federal share of the expenses for performing activities that are necessary for
the proper and efficient administration of the State plan. Federal Financial
Participation (FFP) rates for administrative activities vary by function, not by state.
The general FFP administrative rate is 50%. Some administrative functions qualify
for enhanced FFP administrative rates of 75 percent or more as specified in 42 CFR
§433.15. (e.g., survey and certification, fraud control units).

Aged

As provided in §1905(a)(iii) of the Act, persons age 65 and older.

Agency Provider

A public or private organization/entity that holds a Medicaid provider agreement
and furnishes services to waiver participants using its own employees or
subcontractors.

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Agency with Choice
(Model)

One of the two Employer Authority options that may be made available to waiver
participants who direct some or all of their services. Also known as the “coemployment option,” an arrangement wherein an organization (a co-employment
agency) assumes responsibility for: (a) employing and paying workers who have
been selected by waiver participants to provide services to them; (b) reimbursing
allowable services; (c) withholding, filing and paying Federal, state and local
income and employment taxes; and, (d) sometimes providing other supports to the
participant. Under this model, the participant acts as the “Managing Employer” and
is responsible for hiring, managing, and possibly dismissing the worker. The
Agency with Choice model can enable participants to exercise choice and control
over services while relieving them of the burden of carrying out financial matters
and other legal responsibilities associated with the employment of workers. Under
this model, the co-employment agency is considered the common law employer of
workers who are selected/hired by the waiver participant.

ALOS

See Average Length of Stay

Amendment

A formal request submitted by a state to modify an approved waiver.

Amount (of services)

A term that refers to the total volume of services (measured in units or dollars)
that are furnished to an individual.

Annual Waiver Report

See CMS-372(S)

Approved Waiver

A waiver that has been approved by CMS and is in effect.

Area Agency on Aging
(AAA)

Agencies established in each state under the provisions of the Federal Older
Americans Act to meet the needs of persons age 60 and over in local communities.
One or more processes that are used to obtain information about an individual,
including his/her condition, personal goals and preferences, functional limitations,
health status and other factors that are relevant to the authorization and provision
of services. Assessment information supports the determination that an individual
requires waiver services as well as the development of the service plan.

Assessment

Assisted Living

An assisted living facility provides residents personal care and other assistance as
needed with ADLs and IADLs but does not provide round-the-clock skilled nursing
services. Assisted living facilities generally provide less intensive care than nursing
facilities and emphasize resident privacy and choice.

Assurance

The commitment by a state to operate a HCBS waiver program in accordance with
statutory requirements. Approval of a new waiver is contingent on CMS
determining that the program’s design will result in meeting the assurances
contained in 42 CFR §441.302. Renewal of a waiver is contingent on CMS finding
that a waiver has been operated in accordance with the assurances and other Federal
requirements.

Average Length of
Stay (ALOS)

The average number of days during a waiver year that a waiver participant is
served on a waiver.

Backup

Provision for alternative arrangements for the delivery of services that are critical
to participant well-being in the event that the provider responsible for furnishing
the services fails or is unable to deliver them.

BBA-97

Balanced Budget Act of 1997 (P.L. 105-33)

Beneficiary

An individual who is eligible for and enrolled in the Medicaid program.

Billing

The request for payment by a provider from the state for services rendered to a

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Budget Authority

The participant direction opportunity through which a waiver participant exercises
choice and control over a specified amount of waiver funds (participant-directed
budget). Under the budget authority, the participant has decision-making authority
regarding who will provide a service, when the service will be provided, and how the
service will be provided consistent with the waiver’s service specifications and other
requirements. The participant has the authority to make changes in the distribution of
funds among the waiver services included in the participant-directed budget. Budget
changes and the service plan must be synchronized.

Bundled Service

A waiver service that encompasses two or more discrete services that are not closely
related. When a state proposes to cover a bundled service, it must demonstrate that
such bundling will result in more efficient and economical delivery of services and
ensure that waiver participants enjoy free choice of provider.
See Medicaid Buy-In

Buy-in
Capitation Payment

A method of payment for an array of services wherein a single fixed payment is
made periodically (usually monthly) to a provider (e.g., a managed care entity) on
behalf of each beneficiary who is enrolled with the provider and for whom the
provider is obligated to furnish the services included in the array. The state makes the
payment regardless of the actual number or nature of the services provided.
Capitation payment methods are commonly employed in managed care
arrangements.

Caregiver

A person who helps care for someone who is ill, has a disability, and/or has
functional limitations and requires assistance. Informal caregivers are relatives,
friends or others who volunteer their help. Paid caregivers provide services in
exchange for payment for the services rendered.
A set of activities that are undertaken to ensure that the waiver participant receives
appropriate and necessary services. Under a HCBS waiver, these activities may
include (but are not necessarily limited to) assessment, service plan development,
service plan implementation and service monitoring as well as assistance in
accessing waiver, State plan, and other non-Medicaid services and resources. Case
management sometimes is referred to as “service coordination,” or “support

Case Management

Categorical Eligibility

A phrase that describes Medicaid’s policy of restricting eligibility to individuals in
certain specified groups or categories, such as children, older persons (the aged), or
individuals with disabilities (the disabled). In order to be determined eligible for
Medicaid, individuals who fall into approved, statutorily recognized categories must
also satisfy financial eligibility requirements, including income and, in most cases,
resource tests imposed by the state in which they reside.

Categorically Needy

A phrase that describes certain groups of Medicaid beneficiaries who qualify for the
basic mandatory package of Medicaid benefits. There are mandatory categorically
needy groups that states must cover, such as pregnant women and infants with
incomes at or below 133 percent of the Federal Poverty Level (FPL). There are also
optional categorically needy groups that states may elect to cover at their option,
such as pregnant women and infants with incomes above 133 percent and up to 185
percent of the FPL. Unlike the medically needy, categorically needy individuals do
not spenddown to qualify for Medicaid (except in 209(b) States).
The expenditure by a state or local public agency to provide or purchase services

Certified Public

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Expenditure (CPE)

that qualify for Medicaid Federal financial participation. The public agency
certifies these expenditures to the Medicaid agency which (a) includes them in its
claim for FFP and (b) pays the certifying public agency the Federal share of
allowable expenditures.

Claim

The formal request by the state for Federal financial participation in the costs of
services furnished to beneficiaries and expenses for the administrative activities
that the state has incurred to operate its Medicaid program.
The agency in the Department of Health and Human Services that is responsible
for Federal administration of the Medicaid, Medicare, and Children’s Health
Insurance Program (CHIP) programs. CMS was formerly known as the Health
Care Financing Administration (HCFA).
The component within CMS that is responsible for Federal administration of the
Medicaid, the Children’s Health Insurance Program (CHIP) program, and the
Basic Health Program.

Centers for Medicare
& Medicaid Services
(CMS)
Center for Medicaid
and CHIP Services
(CMCS)
Certification

The result of formal processes that are undertaken by a state to verify that a
provider meets regulatory standards for the delivery of a service.

CFR

Code of Federal Regulations. The CFR contains the regulations that have been
officially adopted by Federal agencies. Federal regulations that govern the
Medicaid program are contained in 42 CFR §430 et seq.

Chore Services

Assistance with household tasks such as home repairs, yard work, and heavy
housecleaning.

Chronic Illness

A long-term or permanent illness (e.g., diabetes, arthritis) that may result in some
type of disability for which assistance may be required on a continuing basis.

Chronic Mental Illness

See Serious Mental Illness

CMCS

See Center for Medicaid and CHIP Services

CMS

See Centers for Medicare & Medicaid Services

CMS-372(S)

The annual report that a state must submit to CMS following the completion of
each waiver year that details: (a) the number of unduplicated individuals who
participated in a waiver during the waiver year; (b) the unduplicated number of
persons who utilized each waiver service and the amount of funds expended for
each service; (c) expenditures for Medicaid State plan services on behalf of waiver
participants; and, (d) information concerning assuring the health and welfare of
waiver participants. The information submitted via the CMS-372(S) provides
evidence of the waiver’s cost-neutrality on an ongoing basis. The CMS- 372(S)
was formerly known as Form HCFA 372. The CMS-372(S) simplified the
information that states previously reported on Form HCFA 372.

CMS Waiver Number

The unique numeric identifier assigned by CMS to each HCBS waiver program.

Co-Employment
Agency

See Agency with Choice model.

Co-Employer

See Agency with Choice model

Co-Insurance

A fixed percentage of the cost of a specific service that must be paid by the
beneficiary. Under Medicaid, co-insurance amounts may not generally exceed
10% of the cost of the service. Co-insurance is distinguished from co-payment
where a fixed dollar amount is charged to a beneficiary for a service.
A common law employer-employee relationship generally exists when the person
for whom services are performed has the authority to control and direct the

Common Law
Employer

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Common Law
Employer
(Option)

individual who performs the services, not only as to the result to be accomplished
but also as to the detail and means by which that result is accomplished.
One of the two Employer Authority options that may be made available to waiver
participants who direct some or all of their services. Under this option, the waiver
participant is the common law employer of workers who furnish services and
supports and assumes all responsibilities associated with being the employer of
such workers. When this option is selected, a Fiscal/Employer Agent performs
employer-related tasks on behalf of the participant but does not serve as the
common law employer of participant-hired workers.

Community
Transition

Activities that are undertaken to assist an institutionalized person to return to the
community or facilitate a person served in a congregate living arrangement in the
community to reside in a private residence.

Comparability

The requirement contained in §1902(a)(10)(B) of the Act that a state must offer
services in the same amount, duration, and scope to individuals within
categorically or medically needy groups covered under its State plan and that
services available to any categorically needy recipient cannot be less than those
available to a medically need recipient. A state must request a waiver of this
provision in order to operate an HCBS waiver.
The formal expression of dissatisfaction by a participant with the provision of a
waiver service or the performance of an entity in conducting other activities
associated with the operation of a waiver.
The amount expended by the state for waiver services net of adjustments for
offsets such as participant post-eligibility treatment of income financial liability
and cost-sharing. Only computable waiver costs are eligible for Federal financial
participation.

Complaint
Computable
Waiver Costs
Continuous
Improvement
Co-Payment

Cost Neutrality

Cost-Sharing
Countable
Income or
CPE

The utilization of systematically complied data and quality information derived
from discovery activities in order to engage in actions to secure better
performance in the operation of a waiver.
A fixed dollar amount that a Medicaid beneficiary is expected to pay at the time
of receiving a specified covered service from a provider. Co-payments, like other
forms of Medicaid beneficiary cost-sharing (e.g., deductibles, coinsurance), may
only be imposed by a state upon certain groups of beneficiaries, only with respect
to certain services, and only in amounts as specified in Federal law.
The requirement that an HCBS waiver must be designed and operated so that the
average cost per unduplicated participant of furnishing waiver services and other
Medicaid benefits is no greater than the average cost per unduplicated individual
of furnishing institutional services and other Medicaid benefits to institutionalized
persons at the same level of care. Cost neutrality must be demonstrated
prospectively in order for a new waiver or a waiver renewal to be approved. It
also must be verified each year that the waiver is in effect (by the submission of
the annual CMS 372(S) report).
The required out-of-pocket payment that an individual must pay for a covered
service. Cost sharing generally takes one of three forms: co-insurance, copayments or deductibles.
The amount of income or resources that is left after the application of all financial
eligibility methodologies and that is compared to the applicable income or
See Certified Public Expenditures

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Criminal History/
Background
Investigation

Critical Incident
(Event)

A process that is undertaken to determine whether a person who would provide
services has been convicted of a crime. Requirements for conducting criminal
history/background investigations are typically established under state
law/regulations. Under such requirements, a human services agency or health care
provider must conduct an investigation prior to hiring a person or permitting an
employee to furnish services directly to individuals and, in some cases, may
prohibit the employment of individuals who have been convicted of specified
crimes.
An alleged, suspected, or actual occurrence of: (a) abuse (including physical,
sexual, verbal and psychological abuse); (b) mistreatment or neglect; (c)
exploitation; (d) serious injury; (e) death other than by natural causes; (f) other
events that cause harm to an individual; and, (g) events that serve as indicators of
risk to participant health and welfare such as hospitalizations, medication errors,
use of restraints or behavioral interventions.

DAC

See Disabled Adult Child

Deductible

A specified dollar amount that the beneficiary must incur before Medicaid will
pay for services. The amount of the deductible must comply with Medicaid federal

Deemed Status

The use of the findings of a private accreditation organization, in whole or in part,
to supplement or substitute for state verification of provider quality standards.

Deficit Reduction Act
of 2005

The federal legislation (P.L. 109-171) that made numerous changes to federal
Medicaid law, including provisions that affect beneficiary cost sharing and the
permit the coverage of certain home and community services under the state

DEHPG

See Disabled and Elderly Health Programs Group

Design

The process of structuring an HCBS waiver (including its benefits and operational
processes) in order to achieve its intended purpose(s).

Developmental
Disability

As provided in The Developmental Disabilities Assistance and Bill of Rights
Act of 2000 (P.L. 106-402 – 42 USC §15002(8)(A) &(B)), the “term
‘developmental disability’ means a severe, chronic disability of an individual that(i) is attributable to a mental or physical impairment or combination of mental
and physical impairments;
(ii) is manifested before the individual attains age 22;
(iii) is likely to continue indefinitely;
(iv) results in substantial functional limitations in 3 or more of the following areas
of major life activity:
(I) Self-care.
(II) Receptive and expressive language.
(III) Learning.
(IV) Mobility.
(V) Self-direction.
(VI) Capacity for independent living.
(VII) Economic self-sufficiency; and
(v) reflects the individual's need for a combination and sequence of special,
interdisciplinary, or generic services, individualized supports, or other forms of
assistance that are of lifelong or extended duration and are individually planned
and coordinated.
“An individual from birth to age 9, inclusive, who has a substantial developmental
delay or specific congenital or acquired condition, may be considered to have a
developmental disability without meeting 3 or more of the criteria … if the

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individual, without services and supports, has a high probability of meeting those
criteria later in life.”
[N.B., The foregoing definition is not the same as the Medicaid specification of
individuals who may receive ICF/IID services. ICF/IID services are furnished to
persons with intellectual disability and other related conditions (see below). When
a waiver targets individual with developmental disabilities, a state should define
its use of the term “developmental disability.”]
Disabled and
Elderly Health
Programs
Group (DEHPG)

The organization within CMCS that, among its other duties, is responsible for
Federal administration of the HCBS waiver program.

Disability

For Social Security purposes and as provided in §1614(a)(3) of the Act, disability
means the inability of a person age 18 or older to engage in substantial gainful
activity (work) by reason of any medically determinable physical or mental
condition that can be expected to result in death or to last for a continuous period
of not less than 12 months. In the case of children (persons age 17 and younger),
the child must have a physical or mental condition that results in marked and
severe functional limitations. The condition also must be expected to result in
death or to last for a continuous period of not less than 12 months.

Disabled

As provided in §1905(a)(vii) of the Act, for Medicaid purposes the term
“disabled” means persons under the age of 65 who have been determined to have
a disability for Social Security purposes (as provided in §1614(a)(3) of the Act).
A 209(b) state may use a more restrictive definition for “disability.”

Disabled Adult
Child (DAC)

A SSDI beneficiary whose disability began before age 22. For an adult with
disabilities to become eligible for this benefit, one of his or her parents must: (a)
be receiving Social Security retirement or disability benefits or (b) must have died
and have worked long enough under Social Security. These benefits are also
payable to an adult who received dependents benefits on a parent’s Social Security
earnings record prior to age 18, if he or she is disabled at age 18.

Discovery

Engaging in activities to collect data about the conduct of processes, the delivery
of services, and direct participant experiences in order to assess the ongoing
implementation of a waiver, identifying both concerns as well as other
opportunities for improvement. Examples of discovery activities include, but are
not limited to, monitoring, complaint systems, incident management systems, and
regular systematic reviews of critical processes such as participant-centered
planning and level of care determinations. Discovery activities are usually
designed to identify problems that may require remediation and sometimes lead
to systemic changes/improvements.

Disregard

An informal term for the state’s methodology for counting or excluding income
and resources in determining Medicaid eligibility. For certain eligibility
categories, such as poverty-related children or working disabled adults, states may
disregard – that is, not count – certain income or resources in determining whether
the individual meets its Medicaid income or resource standards. The effect of an
income or resource disregard is to enable an individual to qualify for Medicaid
even if his or her gross income or resources exceed the state eligibility standard.

Division of
Long-Term
Services and
Supports

(DLTSS) The unit within DEHPG that has direct line responsibility for the HCBS
waiver program.

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DLTSS

See Division of Long-Term Services and Supports

Donation

The transfer of funds from a provider or provider organization to the state to
provide the non-federal share of Medicaid expenditures. Allowable donations are
termed “bona fide donations,” as defined in 42 CFR §433.54. Other donations are
generally not allowable.

DRA

See Deficit Reduction Act of 2005

Drug Used as
Restraint

Any drug that: (1) is administered to manage an individual’s behavior in a way that
reduces the safety risk to the individual or others; (2) has the temporary effect of
restricting the individual’s freedom of movement; and (3) is not a standard
treatment for the individual’s medical or psychiatric condition.

Dual Eligible
(Full Benefit)

An individual who is eligible for both Medicare Parts A and B and for full Medicaid
coverage, including the payment of the person’s Medicare premium, deductibles,
and co-insurance.

Duration (of services)

The length of time that a service will be provided. A limit on the duration of services
means that the service will no longer be provided after a specified period of time
or, after a specified period of time, the necessity for the service is subject to review
and reauthorization.

Early and Periodic
Screening, Diagnosis
and Treatment
(EPSDT)

Medicaid’s comprehensive child health program for individuals under the age of
21. EPSDT is authorized under §1905(r) of the Act and includes the performance
of periodic screening of children, including vision, dental, and hearing services.
§1905(r)(5) of the Act requires that any medically necessary health care service that
is listed in §1905(a) of the Act be provided to an EPSDT beneficiary even if the
service has not been specifically included in State plan. Federal EPSDT regulations
are located in 42 CFR §441.50 et seq.
Refers to the processes that are employed to ascertain whether an individual meets
the requirements specified in the state plan to receive Medicaid benefits. Such
requirements include the determination of whether a person is a member of an
eligibility group specified in the state plan and meets the applicable income and
resource standards associated with the group. Eligibility determination must be
performed by the Medicaid agency or another agency specified in 42 CFR
§431.10(c) with which the Medicaid agency has an agreement as provided in 42
CFR §431.10(d).

Eligibility
Determination

Eligibility Group

Any one of the distinct groups of individuals identified in §1905(a) of the Act or
elsewhere in the Act to which a state must or may furnish Medicaid benefits.

Emergency Backup

See Backup.

Employer Authority

The participant direction opportunity by which the waiver participant exercises
choice and control over individuals who furnish waiver services authorized in the
service plan. Under the employer authority, the participant may function as the coemployer (managing employer) or the common law employer of workers who
furnish direct services and supports to the participant.

Enhanced Payment

See Supplemental Payment

Enrollment

An informal term used to describe the processes that result in the entry of an
individual into a HCBS waiver. Synonymous with the term “entrance.”

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Entrance

EPSDT

The result of completing all processes that must be completed in order for an
individual to begin to receive waiver services. A person may start to receive waiver
services when: (a) the person has been determined to meet applicable Medicaid
eligibility criteria; (b) there has been a determination that the person is member of
a target group that is included in the waiver; (c) there has been a determination that
the person requires a level of care specified for the waiver; (d) the person has
exercised freedom of choice and has elected to receive waiver instead of
institutional services; and, (e) a service plan has been developed that
includes one or more waiver services. FFP is not available for the costs of services
furnished to an individual until all of these steps have been completed. Entrance
may be expedited by the preparation of an interim service plan.
See Early and Periodic Screening, Diagnosis and Treatment

Evaluation

The processes that are undertaken to determine whether an individual requires the
level of care specified for the waiver.

Evidence

Data or facts that support determining whether something is true or not true.

Evidence-Based

A broad term that is used to describe methods or practices that have been
demonstrated (through formal research and systematic analysis of data) to
secure specified outcomes efficiently and efficaciously.

Exploitation

An act of depriving, defrauding or otherwise obtaining the personal property of an
individual by taking advantage of a person’s disability or impairment.

Extended State
Plan Service

The coverage in a waiver of a state plan service for the purpose of furnishing the
state plan service in an amount, frequency or duration that is greater than allowed
under the state plan.

Extension

The approved continued operation of an HCBS waiver beyond its expiration date
until a determination is made by CMS whether to renew the waiver. An extension
must be requested by the state and approved by CMS and is limited to a single 90day period.

Fair Hearing

The administrative procedure established in §1902(a)(3) of the Act and further
specified in 42 CFR Subpart E (42 CFR §431.200 through §431.246) that affords
individuals the statutory right and opportunity to appeal adverse decisions regarding
Medicaid eligibility or benefits to an independent arbiter. An individual has the
opportunity to request a Fair Hearing when denied eligibility, when eligibility is
terminated, or when denied a covered benefit or service.

FBR

See Federal Benefit Rate

Feasible Alternatives

The types of waiver services that may be available to an individual who is a
candidate for entrance to the waiver (e.g., meets requirements for entrance such as
the need for a level of care specified in the waiver). During the waiver entrance
process, a person must be informed of the feasible alternatives under the waiver so
that the person may exercise freedom of choice between waiver and institutional
services.

Federal Benefit Rate
(FBR)

The maximum federal monthly payment that is paid to an SSI recipient or a couple
who has no other countable income. The amount of the FBR is updated annually to
take into account inflation by applying a Cost of Living Adjustment (COLA). The
new COLA-adjusted FBR takes effect on January 1 of each calendar year.

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Federal Financial
Participation (FFP)

The technical term for federal Medicaid matching funds paid to states for allowable
expenditures for Medicaid services or administrative costs. Except in certain
circumstances, states receive FFP for service expenditures at different rates
(FMAPs), depending on each state’s per capita incomes. FFP for Medicaid
administrative expenditures (see Administrative FFP) also varies in its rate,
depending upon the type of administrative function, as provided in §1903(a)(2) of
the Act.

Federal Insurance
Contributions Act
(FICA)

The federal law that authorizes taxes on the wages of employed persons to provide
for contributions to the Federal Old Age, Survivors and Disability Insurance
(OASDI – Social Security) and Medicare Health Insurance (Part A) programs.
Covered workers and their employers pay FICA taxes in equal
amounts.

Federal Medical
Assistance
Percentage
(FMAP)

The statutory term for the federal Medicaid matching rate for medical assistance
furnished under the State plan – i.e., the share of the costs of Medicaid services that
the federal government bears. In most cases, FMAP varies from 50 to 83 percent,
depending upon a state’s per capita income. FMAP rates are re- calculated annually
under the formula set forth in §1903(b) of the Act.

Federal Poverty Level
(FPL)

The federal government’s working definition of poverty that is used as the reference
point for the income standard for Medicaid eligibility for certain groups of
beneficiaries. The FPL is adjusted annually for inflation and is published by the
Department of Health and Human Services in the form of Poverty Level Guidelines
by household size.

Federal Register (FR)

The official federal daily publication that contains proposed rules, final regulations
and notices of federal agencies and organizations as well as Executive Orders and
other Presidential documents. The Federal Register is cited by volume number and
page number(s).

Federal
Unemployment Tax
Act (FUTA)

The Federal Employment Tax Act authorizes the Internal Revenue Service to
collect a federal employer tax used to fund state workforce agencies. Employers
pay this tax annually by filing IRS Form 940. FUTA covers the costs of
administering the Unemployment Insurance and Job Service programs in all states.
In addition, FUTA pays one-half of the cost of extended unemployment benefits
(during periods of high unemployment) and provides for a fund from which states
may borrow, if necessary, to pay benefits.

Fee for Service

A method of paying providers for services rendered to individuals. Under a feefor-service system, the provider is paid for each discrete service rendered to an
individual.

FFP

See Federal Financial Participation

FICA

See Federal Insurance Contribution Act.

Financial
Accountability

The assurance by a state that its claims for federal financial participation in the costs
of waiver services are based on state payments for waiver services that have been
rendered to waiver participants, authorized in the service plan, and properly billed
by qualified waiver providers in accordance with the approved waiver.

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Financial Eligibility

In

Financial Management
Services

A support that is provided to waiver participants who direct some or all of their
waiver services. This support may be furnished as a waiver service or conducted as
an administrative activity. When used in conjunction with employer authority, this
support includes (but is not necessarily limited to) operating a payroll service for
participant employed workers and making required payroll withholdings. When
used in conjunction with budget authority, this support includes (but is not
necessarily limited to) paying invoices for waiver goods and services and tracking
expenditures against the participant-directed budget.

order to qualify for Medicaid, an individual must meet both categorical (e.g.,
have a disability) and financial eligibility requirements. Financial eligibility
requirements vary state-to-state and by eligibility category. These requirements
generally include limits on the amount of countable income (income standard) and
the amount of countable resources (resource standard) an individual is allowed to
have in order to qualify for coverage.

Fiscal Agent

The entity that processes or pays Medicaid vendor billings under contract with the
Medicaid agency and that meets the requirements contained in 42 CFR §434.10.
Sometimes referred to as a “financial intermediary.”
Fiscal/Employer Agent A term used by the IRS for entities that perform tax withholding for employers.
FMAP

See Federal Medical Assistance Percentage

FPL

See Federal Poverty Level

FR

See Federal Register

Fraud and Abuse

In the context of provider billings for Medicaid services, fraud means an intentional
deception or misrepresentation made by a person with the knowledge that the
deception could result in some unauthorized benefit to himself or some other
person. It includes any act that constitutes fraud under applicable Federal or State
law. Abuse means provider practices that are inconsistent with sound fiscal,
business, or medical practices, and result in an unnecessary cost to the Medicaid
program, or in reimbursement for services that are not medically necessary or that
fail to meet professionally recognized standards for health care. It also includes
recipient practices that result in unnecessary costs to the Medicaid program. State
plan requirements concerning fraud detection and investigation are located in 42
CFR §455.12 et seq.
Free Choice of Provider As specified in §1902(a)(23) of the Act and 42 CFR §431.51, the right of a
Medicaid beneficiary to obtain Medicaid services from any institution, agency,
pharmacy, person, or organization that is (a) qualified to furnish the services; and
(b) willing to furnish them to the beneficiary. Free choice of provider may be
limited under a waiver granted under §1915(b) of the Act. §1915(c) of the Act (the
statute authorizing the HCBS waiver program) does not grant the Secretary the
authority to waive §1902(a)(23) of the Act.
The right afforded an individual who is determined to be likely to require a level
Freedom of Choice
of care specified in a waiver to choose either institutional or home and communitybased services, as provided in §1915(c)(2)(C) of the Act and in 42 CFR
§441.302(d).
Frequency (of services) How often a service will be furnished to a beneficiary.

FUTA

See Federal Unemployment Tax Act

GAGAS

See Generally Accepted Government Auditing Standards

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Generally Accepted
Government Auditing
Standards (GAGAS)

Grievance
Habilitation

HCBS

Standards for financial audits issued by the Comptroller General of the United
States through the U.S. General Accountability Office. The standards and guidance
apply to audits and attestation engagements of government entities, programs,
activities, and functions, and of government assistance administered by contractors,
nonprofit entities, and other nongovernmental entities. A number of statutes and
other mandates require that auditors follow GAGAS. The Single Audit Act
Amendments of 1996 (Public Law 104-156) require that GAGAS be followed in
audits of state and local governments and nonprofit entities that receive federal
awards. The use of GAGAS is also required by Office of Management and Budget
(OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, which provides the government- wide guidelines and policies on
performing audits to comply with the Single Audit Act.
A formal, beneficiary complaint about the way that a service provider is furnishing
a Medicaid service or about the conduct of a waiver administrative process.
Services that are provided in order to assist an individual to acquire a variety of
skills, including self-help, socialization and adaptive skills. Habilitation is aimed

at raising the level of physical, mental, and social functioning of an individual.
Habilitation is contrasted to rehabilitation which involves the restoration of
function that a person has lost.
Home and Community-Based Services

Health Insurance
Portability and
Accountability Act of
1996 (HIPAA)

The federal law (P.L. 104-191) that requires (among its other provisions) that each
state’s Medicaid management information system (MMIS) have the capacity to
exchange data with the Medicare program and that contains “Administrative
Simplification” provisions that require state Medicaid programs to use standard,
national codes for electronic transactions related to the processing of health claims.
HIPAA also mandates certain standards and practices with regard to the privacy of
consumer health information.

HHS

U.S. Department of Health and Human Services

HIPAA

See Health Insurance Portability and Accountability Act of 1996

Home Health Aide

A person who, under the supervision of a home health, assists elderly, ill or a person
with a disability with household chores, bathing, personal care, and other daily
living needs.

Home Health Services

As specified in 42 CFR §440.70, the provision of part-time or intermittent nursing
care and home health aide services and, at a state’s option, physical therapy,
occupational therapy, speech pathology and audiology services, medical
equipment, medical supplies, and appliances that are provided to Medicaid
beneficiaries in their place of residence. Home health services are a mandatory
Medicaid benefit. Home health services must be ordered by a physician under a
plan of care that the physician reviews at least every sixty days.

Homemaker
Services

The performance of general household tasks (e.g., meal preparation and routine
household care) provided by a qualified homemaker, when the individual regularly
responsible for these activities is temporarily absent or unable to manage the home
and care for him or herself or others in the home.

IADL

See Instrumental Activities of Daily Living

IBA

See Individual Budget Amount

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ICF/IID

See Intermediate Care Facility for Individuals with Intellectual Disabilities

IDEA

See Individuals with Disabilities Education Improvement Act of 2004

IGT

See Intergovernmental Transfer

IMD

See Institutions for Mental Disease

Income Standard

The maximum amount of countable income that a person can have and still be
financially eligible for Medicaid.

Indicator

A key quality characteristic that is measured, over time, in order to assess the
performance, processes, and outcomes of service delivery components.

Individual Budget
Amount (IBA)

As used in the waiver application, the term “individual budget amount” means a
prospectively determined amount of funds that the state makes available for the
provision of waiver services to a participant. The IBA may encompass all waiver
services or a subset of waiver services. An IBA may serve as the basis for but is not
necessarily synonymous with the term “participant-directed budget” when a waiver
provides for the Budget Authority participant direction opportunity.

Individual Cost Limit

A limitation on the entrance of individuals to a waiver that is based on the
comparison of the expected costs of HCBS waiver and state plan services to the
expected costs of institutional and State plan services that the person would
receive in lieu of participation in the waiver. When a state adopts an individual cost
limit, the state denies entrance to the waiver when the expected cost of HCBS
waiver and State plan services required by an individual exceeds the limit
established by the state.

Individual Risk
Agreement (Contract)

An agreement that outlines the risks and benefits to the participant of a particular
course of action that might involve risk to the participant, the conditions under
which the participant assumes responsibility for the agreed upon course of action,
and the accountability trail for the decisions that are made. A risk agreement permits
individuals to assume responsibility for their choices personally, through surrogate
decision makers, or through planning team consensus.

Individuals with
Disabilities Education
Improvement Act of
2004 (IDEA)

The federal law (P.L. 108-446; 20 USC §1400 et seq.) that ensures “that all children
with disabilities have available to them a free appropriate public education that
emphasizes special education and related services designed to meet their unique
needs and prepare them for further education, employment, and independent
living.”

Information and
Assistance in Support
of Participant
Direction

Activities that are undertaken to assist a waiver participant to direct and manage
his/her waiver services. Such activities might include assisting a participant in
carrying out employer responsibilities under the employer authority or locating
sources of waiver goods and services and managing the participant-directed budget.
This support is furnished by individuals or entities that work on behalf of and under
the direction of the person. These activities may be provided as a distinct waiver
service, in conjunction with the provision of case management, as an administrative
activity or using a combination of delivery methods. Also sometimes known as
“supports brokerage” or “personal agent.”

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Interagency
Agreement

A formal document that sets forth the responsibilities that are assumed by two or
more governmental agencies in their pursuit of common goals and objectives. In
the context of the HCBS waiver, the Medicaid agency may enter into an interagency
agreement (or, alternatively, a Memorandum of Understanding or MOU) with
another state agency to operate a waiver, provided that the Medicaid agency retains
ultimate authority over the administration of the waiver.

Institution

In the context of the waiver application, a hospital, nursing facility or ICF/IID for
which the state makes Medicaid payment under the state plan.

Institutions for Mental
Disease (IMD)

As defined in 42 CFR §435.1009, an IMD is a public or private facility that has
more than 16 beds and is primarily engaged in providing diagnosis, treatment, or
care of persons with mental diseases (disorders). This includes not just public or
private hospitals for individuals with mental illness but also nursing homes or other
long-term care facilities that primarily serve such individuals. As provided in 42
CFR §435.1008, federal Medicaid matching funds are not available for the costs of
any Medicaid services furnished to individuals under 65 years of age who reside in
an IMD except that, per 42 CFR §440.160, a state may provide optional inpatient
coverage for individuals under age 21 in accredited psychiatric facilities. Per 42
CFR §440.140, a state may provide optional coverage for individuals age 65 and
older in hospitals or nursing facilities that are IMDs. A facility that serves fewer
than 17 individuals with mental disorders is not considered to be an IMD.

Instrumental Activities
of Daily Living (IADL)

Activities related to independent living, including preparing meals, managing
money, shopping for groceries or personal items, performing light or heavy
housework, and communication. The extent to which a person requires assistance
in performing IADLs is often assessed in conjunction with the evaluation of level
of care.

Intellectual Disability

A condition/disability that is manifested by (1) significant sub-average intellectual
functioning as measured on a standardized intelligence test; (2) significant deficits
in adaptive behavior/functioning (e.g., daily living, communication and social
skills); and, (3) on-set during the developmental period of life (prior to age 18).

Intergovernmental
Transfer (IGT)
Intermediate Care
Facility for Individuals
with Intellectual
Disabilities (ICF/IID)

The transfer of non-federal public funds from a local government or another state
agency to the Medicaid agency for the purpose of providing the non-federal share
of a Medicaid expenditure in order to draw down federal Medicaid matching funds.
A public or private facility that provides health and habilitation services to
individuals with intellectual disability or related conditions (e.g., cerebral palsy).
The ICF/IID benefit is an optional Medicaid service that is authorized in §1905(d)
of the Act. ICFs/IID facilities have four or more beds and must provide active
treatment to their residents.

IRS

Internal Revenue Service

Katie Beckett Option

The popular name for the Medicaid optional eligibility group under §1902(e)(3) of
the Act that permits a state to extend Medicaid eligibility to children with
disabilities or chronic conditions under the age of 19 who require the level of care
provided in a hospital, nursing facility, or ICF/IID but who can be cared for at home
and would not otherwise qualify for Medicaid unless institutionalized. This option
is sometimes called the TEFRA 134 option. Federal regulations concerning this
optional eligibility group are located in 42 CFR §435.225.

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Keys Amendment

The popular name for the requirement contained in §1616(e) of the Act which
requires that each state establish, maintain, and insure the enforcement of standards
for any category of institutions, foster homes, or group living arrangements in
which a significant number of SSI recipients resides or is likely to reside. The
standards must be: (a) appropriate to the needs of residents and the character of the
facilities involved and (b) govern such matters as admission policies, safety,
sanitation, and protection of civil rights.

Legal Representative

A person who has legal standing to make decisions on behalf of another person
(e.g., a guardian who has been appointed by the court or an individual who has
power of attorney granted by the person).

Legally Responsible
Individual

A person who has a legal obligation under the provisions of state law to care for
another person. Legal responsibility is defined by State law, and generally includes
the parents (natural or adoptive) of minor children, legally assigned caretaker
relatives of minor children, and sometimes spouses.

LEP

See Limited English Proficient Persons

Level of Care

The specification of the minimum amount of assistance that an individual must
require in order to receive services in an institutional setting under the state plan.

License

Proof of official or legal permission issued by the government for an entity or
individual to perform an activity or service. In the absence of a license, the entity
or individual is debarred from performing the activity or service.

Limited English
Proficient (LEP)
Persons

Individuals who do not speak English as their primary language and who have a
limited ability to read, write, speak, or understand English may be limited English
proficient (LEP) and eligible to receive language assistance in conjunction with a
particular type of service, benefit, or encounter. Recipients of federal assistance are
required to provide language assistance to LEP persons in accordance with 42 CFR
435.905(b).

Line of Authority

In the context of the waiver application, the specification of whether a waiver is
operated by the Medicaid agency or by another state agency under the supervision
of the Medicaid agency.
An unrelated personal caregiver who resides in the same household as the waiver
participant. For purposes of the waiver, a live-in caregiver does not include staff or
personnel who reside with a participant or participants in a residence that is owned
or leased by a provider of Medicaid services.
A local or regional public agency or a non-governmental organization that performs
waiver operational and administrative functions on behalf of the state. Such entities
do not include the local or regional offices of state agencies.
A variety of services that help people with health or personal needs and activities
of daily living over a period of time. Long-term care can be provided at home, in
the community, or in various types of facilities, including nursing homes and
assisted living facilities.
A term that is sometimes used for the amount of income that a waiver participant
in the §435.217 group is permitted to retain in order to meet shelter, food and other
living expenses of the individual (and his/her spouse and family, if applicable) in
the community. See Personal Needs Allowance (PNA) for the parallel allocation
for residents of institutions.

Live-In Caregiver

Local/Regional NonState Entity
Long-Term Care

Maintenance
Allowance

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Managed Care

A method of organizing and financing the delivery of health care and other services
that emphasizes cost-effectiveness and coordination of care. Managed care
organizations receive a fixed amount of money per member per month (called a
capitation), no matter how much care a member needs during that month. Managed
care integrates the financing and delivery of appropriate services to covered
individuals by means of arrangements with selected providers to furnish an array
of services to members; explicit criteria for the selection of health care providers;
and financial incentives for members to use providers and procedures associated
with the plan. Federal Medicaid managed care regulations are located in 42 CFR
§438.

Managed Care
Organization (MCO)

As defined in 42 CFR §438.2, an entity that has a comprehensive risk contract with
the Medicaid agency and is (1) a federally qualified Health Maintenance
Organization (HMO) or (2) makes the services it provides to its Medicaid enrollees
as accessible (in terms of timeliness, amount, duration, and scope) as those services
are to other Medicaid recipients within the area served by the entity.

Managing Employer

See Agency with Choice Model.

Mandatory

The term used to describe the eligibility groups and services that a state which
participates in the Medicaid program must include in its program.

MCO

See Managed Care Organization

Measure

A numeric value associated with an indicator. In the quality improvement context,
a quality indicator describes the attributes of care or services related to quality. A
measure is a way of quantifying attributes. For example, a quality indicator might
be expressed as “eligibility is determined promptly.” A measure associated with
this indicator could be “the average number of days to complete eligibility
determination.”

Mechanical Restraint

Any device attached or adjacent to an individual's body that he or she cannot easily
remove that restricts freedom of movement or normal access to his or her body.

Medicaid

The joint federal and state program to assist states in furnishing medical assistance
to eligible needy persons. Federal law concerning the Medicaid program is located
in Title XIX of the Act. Within broad national guidelines established by federal
statutes, regulations, and policies, each state (1) establishes

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Medicaid agency

its own eligibility standards; (2) determines the type, amount, duration, and scope
of services;
(3) sets the rate of payment for services; and (4) administers its own program.
See Single State Agency

Medicaid Buy-In

Refers to the Medicaid eligibility options that were created in BBA-97 and the
Ticket to Work and Work Incentives Improvement Act of 1999 that permit states
to provide Medicaid to working people with disabilities whose earnings are
otherwise too high for them to qualify for Medicaid. In particular, states may elect
to cover:
• Working individuals with disabilities with incomes up to 250% of
poverty (BBA-97; §§1902(a)(10)(A)(ii)(XIII)) of the Act
 Working individuals with disabilities who are at least age 16, but less than
65 years of age using income and resource limits set by the State (TWWIIA;
§1902(a)(10)(A)(ii)(XV) of the Act, and
• Employed individuals covered under the group described above who lose
that coverage due to medical improvement, but who still have a medically
determinable severe impairment. (TWWIIA §1902(a)(10)(A)(ii)(XVI) of the
Act).

Medicaid Management
Information System
(MMIS)

A CMS-approved information technology system that supports the operation of the
Medicaid program. The MMIS includes the following types of sub-systems or files:
recipient eligibility, Medicaid provider, claims processing, pricing, SURS, MARS,
and potentially encounter processing.

Medical Assistance

The term used in Title XIX of the Act to refer to the payment for items and services
covered under a state’s Medicaid program on behalf of Medicaid beneficiaries.

Medical Assistance
Unit

The state government entity established in accordance with 42 CFR §431.11(b).
The Medical Assistance Unit may be the same as the Medicaid agency or a
subordinate division/unit within the Medicaid agency.

Medically Necessary

Services or supplies that are proper and needed for the diagnosis or treatment of a
medical condition, are provided for the diagnosis, direct care, and treatment of the
condition, and meet the standards of good medical practice.

Medically Needy

A term used to describe an optional Medicaid eligibility group made up of
individuals who qualify for coverage because of high medical expenses, commonly
hospital or nursing home care. These individuals meet Medicaid categorical
requirements (i.e., they are children or parents or aged or individuals with
disabilities), but their income is too high to permit them to qualify for categorically
needy coverage. Instead, they qualify for coverage by spending down (i.e., reducing
their income by incurring medical expenses). States that elect to cover the
medically needy do not have to offer the same benefit package to them as they offer
to the categorically needy.

Medically Needy
Income Level (MNIL)

The maximum amount of income remaining after spenddown that permits an
individual to qualify for the medically needy eligibility group. The MNIL varies by
state.

Medicare

The federally-administered health insurance program established in Title XVIII of
the Act for persons age 65 and older and certain persons with disabilities under age
65. Medicare eligibility is determined by the Social Security Administration.
Medicare has four parts: Part A (hospital insurance); Part B (optional medical
insurance which covers physicians' services and outpatient care in part and which
requires the payment of a monthly premium); Part C (managed care arrangements
for the delivery of Medicare benefits); and, Part D (prescription drugs).

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Medicare Prescription The federal legislation (P.L. 108-173) that, among its other provisions, created the
Part D Prescription Drug Benefit for Medicare beneficiaries.
Drug, Improvement,
and Modernization Act
of 2003 (MMA)
The provision of a medication by a service provider to an individual who is not able
Medication
to self-administer his/her own medications.
Administration
A mistake in medication administration that includes but is not necessarily limited
Medication Error
to the following: (a) wrong medication (an individual receives and takes medication
which is intended for another person, discontinued, or inappropriately labeled; (b)
wrong dose (an individual receives the incorrect amount of medication); (c) wrong
time (an individual receives medication dose at an incorrect time interval); and, (d)
omission (missed dose) is when an individual does not receive a prescribed dose of
medication, not including when an individual refuses to take medication.
Processes and activities that are undertaken in order to ensure that the full range of
Medication
medications that a person receives is appropriate. Medication management may
Management
include periodic review of medications to determine their necessity, to identify
possible over medication, and to identify contraindicated medications.
Memorandum of
Understanding (MOU)

See Interagency Agreement.

Methodology
(Eligibility)

The rules that a state uses in counting an individual’s income or resources in
determining whether he or she meets its Medicaid eligibility standards. For some
eligibility categories, states have the flexibility to disregard certain income and
resources in determining whether the individual qualifies for Medicaid.

Miller Trust

MMA

Trusts composed only of pension, Social Security and other income of the
individual, in states which make individuals eligible for institutional care under the
special income level, but do not cover institutional care in a Nursing Facility for the
medically needy. Also termed “Qualified Income Trust.” As provided in
§1917(d)(4)(B) of the Act (enacted in the Omnibus Budget Reconciliation Act of
1993 (P.L. 103-66)), a state that extends eligibility for institutional care to
individuals under a special income level (i e persons who have incomes up to
See Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

MNIL

See Medically Needy Income Level.

Model Waiver

A HCBS waiver that is designed to serve no more than 200 individuals at any point
in time. It is a state option to designate a waiver as a model waiver.

Monitoring

The ongoing oversight of the provision of waiver and other services to determine
that they are furnished according to the participant’s service plan and effectively
meet his/her needs, including assuring health and welfare. Monitoring activities
may include (but are not limited to) telephone contact, observation, interviewing
the participant and/or the participant’s family (as appropriate) (in person or by
phone), and/or interviewing service providers.

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MOU

Memorandum of Understanding; see also Interagency Agreement

Neglect

The failure to provide an individual the reasonable care that s/he requires, including
but not limited to food, clothing, shelter, medical care, personal hygiene, and
protection from harm.

Non-Federal Share

The amount of funds that a state must provide from its own funds or other
permissible funding sources (e.g., local tax revenues) toward the cost of Medicaid
services or administrative activities.

Non-Risk Contract

A type of Medicaid contract under which a provider furnishes an array of Medicaid
services but is not at financial risk for changes in utilization or for costs incurred
under the contract, subject to the upper payment limits specified in 42 CFR
§447.362. The provider may be reimbursed by the state at the end of the contract
period on the basis of the incurred costs, subject to the specified limits.

Nursing Facility (NF)

Sometimes referred to as nursing homes. Nursing facility services for individuals
age 21 and older are a mandatory Medicaid benefit. A state may provide nursing
facility services to individuals under age 21 on an optional basis. Nursing facilities
are institutions that primarily provide:
• Skilled nursing care and related services for residents who require medical or
nursing care;
• Rehabilitation services for the rehabilitation of injured, disabled or sick
persons; and/or
• Health-related care and services, on a regular basis, to individuals who because
of their mental or physical condition require care and services, above the level
of room and board, which can be made available to them only through
institutional facilities.

OASDI

See Old-Age, Survivors, and Disability Insurance

Office of Inspector
General (OIG)

The agency within HHS charged with the responsibility to protect the integrity of
HHS programs, as well as the health and welfare of the beneficiaries of those
programs. The OIG has a responsibility to report both to the Secretary and to the
Congress program and management problems and recommendations to correct
them. OIG duties are carried out through a nationwide network of audits,
investigations, inspections and other mission-related functions performed by OIG
components.

OHCDS

See Organized Health Care Delivery System

Old-Age, Survivors,
and Disability
Insurance (OASDI)

The Social Security programs that pay monthly cash benefits to (1) retired-worker
(old-age) beneficiaries, their spouses and children, and survivors of deceased
insured workers (OASI); and (2) disabled-worker beneficiaries and their spouses
and children and for providing rehabilitation services to the disabled (SSDI). These
programs are established in Title II of the Social Security Act.

Operating Agency

A state agency other than the Medicaid agency that is responsible for the day-today operation and administration of a waiver. An operating agency conducts waiver
operation and administration functions under an interagency agreement or
memorandum of understanding with the Medicaid agency.

Operation (Waiver)

The constellation of administrative activities and processes that are necessary so
that individuals may receive services through the waiver. Such activities may
include functions such as payment rate determination, training and technical
assistance, utilization management, and prior authorization.

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Ombudsman

A representative of a public agency or a private nonprofit organization who is
empowered under state law to investigate and resolve complaints made by or on
behalf of individuals who receive services. Under the provisions of the Older
Americans Act, each state has established a Long-Term Care Ombudsman Office
to investigate and resolve complaints about services in nursing and certain other
long-term care facilities. Some states have established similar programs for
individuals with disabilities.

Optional

The term used to describe Medicaid eligibility groups or service categories that
states may cover if they choose and for which they may receive FFP.

Organized Health Care
Delivery System
(OHCDS)

As defined in 42 CFR §447.10, an OHCDS is an organization that provides at least
one Medicaid service directly (utilizing its own employees) and contracts with other
qualified providers to furnish other services. When there is an OHCDS, the required
Medicaid provider agreement is executed between the state and the OHCDS. Since
the OHCDS acts as the Medicaid provider, it is not necessary for each subcontractor
of an OHCDS to sign a provider agreement with the Medicaid agency (however,
subcontractors must still meet the standards under the waiver to provide waiver
services). When the OHCDS provides waiver services, payment is made directly to
the OHCDS and the OHCDS reimburses the subcontractors. Waiver providers may
not be restricted to participating only through an OHCDS. Such an arrangement
must be voluntary. In addition, participants may not be required to secure services
exclusively through an OHCDS.

Outcome

The result of the performance (or nonperformance) of a function or process,
including the provision of services.

Outcome Indicator

A key quality characteristic that is measured, over time, in order to assess whether
the provision of services or the performance of activities resulted in the desired
result.

PACC

See Program for All-Inclusive Care for Children

Part D

The Medicare Prescription Drug Benefit that was established by the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) to take
effect on January 1, 2006.

Participant

An individual who has met waiver entrance requirements, chooses to receive waiver
services, enters the waiver, and subsequently receives waiver services authorized
in a service plan.

Participant Cap

A term used to describe the maximum number of individuals who may participate
in a waiver during the year.

Participant-Centered

A general term used to describe waiver processes and activities that are designed
to address each participant’s unique goals, preferences and needs.

Participant-Directed
Budget

An amount of waiver funds that is under the control and direction of the waiver
participant when a waiver makes available the budget authority participant direction
opportunity. Sometimes called the “individual budget.”

Participant-Directed
Service

A waiver service that the state specifies may be directed by the participant using
employer authority, budget authority or both.

Participant Direction

Provision of the opportunity for a waiver participant to exercise choice and control
in identifying, accessing, and managing waiver services and other supports in
accordance with their needs and personal preferences.

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Performance Measure

A gauge used to assess the performance of a process or function of any organization.
Quantitative or qualitative measures of the services that are delivered to individuals
(process) or the end result of services (outcomes). Performance measures also can
be used to assess other aspects of an individual or organization's performance such
as access and availability of care, utilization of
care, health plan stability, beneficiary characteristics, and other structural and
operational aspect of health care services.

Person-Centered
Planning

An assessment and service planning process are directed and led by the individual,
with assistance as needed or desired from a representative or other persons of the
individual’s choosing. The process is designed to identify the strengths, capacities,
preferences, needs, and desired outcomes of the individual. The process may
include other persons, freely chosen by the individual, who are able to serve as
important contributors to the process. The PCP process enables and assists the
individual to identify and access a personalized mix of paid and non- paid services
and supports that assist him/her to achieve personally defined outcomes in the
community.
See Information and Assistance in Support of Participant Direction

Personal Agent

Personal Care Services A range of human assistance provided to persons with disabilities and chronic
conditions of all ages to enable them to accomplish tasks that they would normally
do for themselves if they did not have a disability. Assistance may take the form of
hands-on assistance or as cueing so that the person performs the task by him/herself.
Such assistance most often relates to performance of activities of daily living
(ADLs) and instrumental activities of daily living (IADLs), which includes
assistance with daily activities such as eating, bathing, dressing, toileting,
transferring, personal hygiene, light housework, medication management, etc.
Personal care may be furnished in the home or outside the home. Also sometimes
known as “personal assistance” or “attendant care.” Personal care is an optional
State plan benefit (42 CFR §440.167) and is a waiver service that is recognized in
§1915(c) of the Act.
Personal Needs
Allowance

In the case of a Medicaid beneficiary who is a resident of a nursing facility or
ICF/IID, the amount of monthly income that he or she is allowed to keep for
personal expenses like haircuts and laundry. The remainder of the beneficiary’s
monthly income is applied to the costs of care at the facility. The minimum PNA
that a state must allow an institutionalized beneficiary is $30 per month. See
Maintenance Allowance for the parallel allocation for waiver participants whose
eligibility is established via the 42 CFR 435.217 group.

Personal Restraint

Personal restraint means the application of physical force without the use of any
device, for the purposes of restraining the free movement of an individual's body.

Persons Living With
AIDS (PLWAs)

Individuals who have Acquired Immunodeficiency Syndrome (AIDS) or Human
Immunodeficiency Virus (HIV) Infection

PETI

See Post Eligibility Treatment of Income

Phase-In

The planned implementation or expansion of an HCBS waiver program over a
specified period of time by increasing the waiver participant cap in staged
increments across one or more waiver years.
The planned contraction of an HCBS waiver program over a specified period of
time by decreasing the participant cap in specified decrements across one or more
waiver years.

Phase-Out

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Plan of Care

See Service Plan

Post Eligibility
Treatment of Income
(PETI)

The determination of the financial liability (if any) of waiver participants who are
in the §435.217 group for their share of the costs of waiver services. PETI
calculations are only made for members of the §435.217 group. A state must
provide for an allowance for the needs of the waiver participant to meet shelter,
food and other living expenses in the community (“maintenance allowance” or
participant’s family (if applicable), and medical and remedial care expenses for
services not covered under the State plan.

Poverty-Level Groups

A popular term for eligibility groups, both mandatory and optional, for whom
Medicaid income eligibility is determined against an income standard that is based
on a percentage of the Federal poverty level (FPL) (e.g., pregnant women and
infants with family incomes at or below 133 percent of the FPL).

Premium

A regularly paid specified dollar amount that a Medicaid beneficiary must pay by
virtue of enrollment in the Medicaid program.

Prepaid Health Plan

A prepaid managed care entity that provides less than comprehensive services on
an at-risk basis or one that provides any benefit package on a non-risk basis. BBA97 defined two types of prepaid health plans: prepaid ambulatory plans and prepaid
inpatient plans.

Prepaid Ambulatory
Health Plan (PAHP)

As defined in 42 CFR §438.2, an entity that: (1) provides medical services to
Medicaid enrollees under contract with the Medicaid agency on the basis of prepaid
capitation payments, or other payment arrangements that do not use state plan
payment rates; (2) does not provide or arrange for, and is not otherwise responsible
for the provision of any inpatient hospital or institutional services for its enrollees;
and (3) does not have a comprehensive risk contract.

Prepaid Inpatient
Health Plan (PIHP)

As defined in 42 CFR §438.2, an entity that: (1) provides medical services to
enrollees under contract with the Medicaid and on the basis of prepaid capitation
payments, or other payment arrangements that do not use state plan payment rates;
(2) provides, arranges for, or otherwise has responsibility for the provision of any
inpatient hospital or institutional services for its enrollees; and, (3) does not have a
comprehensive risk contract.

Prior Authorization

A mechanism that is employed to control the use of covered items (such as durable
medical equipment or prescription drugs) or services (such as inpatient hospital
care). When an item or service is subject to prior authorization, payment is not made
unless approval for the item or service is obtained in advance either from state
agency personnel or from a state fiscal agent or other contractor.

Private Residence

As used in the waiver application:
(1) The home that a waiver participant owns or rents in his or her own right or the
home where a waiver participant resides with other family members or friends. A
private residence is not a living arrangement that is owned or leased by a service
provider; or,
(2) The home of a caregiver who furnishes foster or respite care to a waiver
participant

Process

A goal-directed, interrelated series of actions, events, mechanisms, or steps.

Process Improvement

A methodology utilized to make improvements to a process through the use of
continuous quality improvement methods.

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Process Indicator

A gauge that measures a goal-directed interrelated series of actions, events,
mechanisms, or steps.

Program for AllInclusive Care for
Children (PACC)

A program offering a blended package of curative and palliative care services
designed to provide support for children with life-threatening conditions and their
families.

Provider

A qualified individual or entity that undertakes to render Medicaid services to
beneficiaries and has an agreement with the Medicaid agency.

Provider Agreement

The contract between the Medicaid agency and a service provider under which the

provider or organization agrees to furnish services to Medicaid beneficiaries in
compliance with state and Federal requirements. Federal regulations concerning
provider agreements are located in 42 CFR §431.107.
Provider-Managed
Service

A waiver service for which a provider is responsible for directing and managing in
accordance with the service plan on behalf of a waiver participant. In the waiver
application, a state may designate a service as provider managed, participantdirected or both.

Provider Qualification

Standards established by the state that specify the education, training, skills,
competencies and attributes that an individual or provider agency must possess in
order to furnish services to waiver participants.

Provider Tax

A tax, fee, assessment, or other mandatory payment that health care providers are
required to make to the state. In limited circumstances, a state may use revenues
derived from provider taxes to meet the non-federal share of Medicaid
expenditures. These circumstances are specified in federal Medicaid law and
regulations (see 42 CFR §433.55 – 433.74).

Public Input

As used in the waiver application, processes that are undertaken in order to obtain
the comments, suggestions and recommendations of parties affected by a waiver
concerning its design and operation.

QIS

See Quality Improvement Strategy

Qualified Income
Trust

See Miller Trust

Quality Assurance

The process of looking at how well a service is provided. The process may include
formally reviewing the services furnished to a person or group of persons,
identifying and correcting problems, and then checking to see if the problem was
corrected.

Quality Improvement

The performance of discovery, remediation and quality improvement activities in
order to ascertain whether the waiver meets the assurances, correct shortcomings,
and pursue opportunities for improvement. Quality improvement also is employed
to address other areas of waiver performance.

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Quality Improvement
Strategy (QIS)

The document that is submitted with the waiver application that describes how the
state will continually assess whether it operates the waiver in accordance with the
approved design of its program, meets statutory and regulatory assurances and
requirements, achieves desired outcomes, and how it identifies opportunities for
improvement. A QIS describes the processes of discovery, remediation and quality
improvement activities; the frequency of those processes; the source and types of
information gathered, analyzed, and utilized to measure performance; and key roles
and responsibilities for managing quality. The QIS may vary depending on the
nature of the waiver target population, the services offered, and the waiver’s
relationship to other public programs, and extend beyond regulatory requirements.
Updates to the QIS will be submitted with the annual waiver report.

RAI

See Request for Additional Information

Reassignment (of
Payment)

The voluntary assignment of the payment for Medicaid services by the provider to
a governmental entity.

Reevaluation

The periodic but at least annual review of an individual’s condition and service
needs to determine whether the person continues to need a level of care specified
in the waiver.

Regular Waiver

A waiver program that is not a model waiver. A regular waiver may serve any
number of participants specified by the state.

Rehabilitation

Services that have the purpose of improving/restoring a person's physical or mental
functioning. Such services may include therapeutic services such as occupational
and physical therapy services, as well as mental health services such as individual
and group psychological therapies, psychosocial services, and addiction treatment
services. Rehabilitative services may be provided at home, in the community or in
long-term care facilities. Medicaid rehabilitation services, defined at 42 CFR
§440.130(d), may be covered as an optional state plan benefit or as waiver services.

Related Conditions

For the purpose of ICF/IID services and as provided in 42 CFR §435.1009, persons
with related conditions are individuals who have a severe, chronic disability that
meets all of the following conditions:
(a) It is attributable to-(1) Cerebral palsy or epilepsy; or
(2) Any other condition, other than mental illness, found to be closely related
to intellectual disability because this condition results in impairment of
general intellectual functioning or adaptive behavior similar to that of
persons with an intellectual disability, and requires treatment or services
similar to those required for these persons.
(b) It is manifested before the person reaches age 22.
(c) It is likely to continue indefinitely.
(d) It results in substantial functional limitations in three or more of the following
areas of major life activity: (1) self-care; (2) understanding and use of language;
(3) learning; (4) mobility; (5) self-direction; (6) capacity for independent living.

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Remediation

Activities designed to correct identified problems at the individual, provider or
system level. Examples of individual level remediation include providing
additional needed services when discovery activities indicate that an
individual/participant has not received necessary services. Provider level
remediation includes sanctioning a provider for failure to furnish services in
accordance with state requirements. System-level remediation activities may
include the correction of underlying waiver design problems.

Representative

A person who may act on behalf of another. A representative may be: (a) a legal
representative (a court-appointed guardian, a parent of a minor child, or a spouse)
or (b) an individual (family member or friend) selected by an adult to speak for
and/or act on his/her behalf.

Request for Additional
Information (RAI)

A formal, written document issued by CMS that identifies serious problems with a
waiver request that potentially could cause CMS to disapprove the request. A RAI
stops the 90-day clock. Once a state responds to the RAI, a new 90-day clock is
started. During the second clock CMS may not issue a RAI — it must approve
disapprove the request.

Resources

Sometimes referred to as assets, resources are items of economic value that are not
income. Resources include financial instruments such as savings accounts and
certificates of deposit, personal property such as an automobile (above a specified
value), and real estate (other than an individual’s home). Some Medicaid eligibility
groups must meet a resource test; others (at state option) are not subject to a
resource test. In establishing a resource test, a state must specify both the resource
standard (e.g., the amount of countable resources an individual may retain and still
be eligible for Medicaid) and the resource methodology (e.g., the resources that are
counted and how are they valued).

Resource Standard

The maximum amount of countable resources a person can have and still be

Restraint

eligible for Medicaid.
Any physical, chemical or mechanical intervention that is used to control acute,
episodic behavior that restricts the movement or function of the individual or a
portion of the individual’s body.

Restrictive
Intervention

An action or procedure that limits an individual’s movement, a person’s access to
other individuals, locations or activities, or restricts participant rights. Restraints or
seclusion are a subset of restrictive interventions.

Risk

Factors that, if unaddressed, might pose a high threat to an individual’s health and
welfare. These include: (a) health risk (medical conditions that require continuing
care and treatment); (b) behavioral risk (behaviors or conditions that might cause
harm to the person or others); and, (c) personal safety risk (e.g., safe evacuation).

Risk Management
Agreement

See Individual Risk Agreement

RO

CMS Regional Office

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Room and Board

The term “room” means shelter type expenses, including all property-related costs
such as rental or purchase of real estate and furnishings, maintenance, utilities, and
related administrative services. The term “board” means three meals a day or any
other full nutritional regimen. Board does not include the provision of a meal at an
adult day health or similar facility outside the participant’s home. Board also does
not include the delivery of a single meal to a participant at his/her own home
through a meals-on-wheels service.

Safeguard

Policies or procedures that are designed to prevent harm to an individual or to
ensure that the application of a policy takes into account potentially adverse
effects on a person.

Seclusion

Seclusion means the involuntary confinement of an individual alone in a room or
an area from which the individual is physically prevented from having contact with
others or leaving.

Secretary

Secretary of the U.S. Department of Health and Human Services

Self-Administration

The administration of medications or other procedures by a person without
assistance.

Self-Direction

See Participant Direction

Serious Emotional
Disturbance

The range of diagnosable emotional, behavioral, and mental disorders that are of
sufficient duration so as to result in functional impairment that substantially
interferes with or limits one or more major life activities of children and adolescents
up to age 18 in the home, school, or community. Such disorders include
externalizing behavior disorders (e.g., attention deficit hyperactivity disorder and
conduct disorder), internalizing emotional disorders (e.g., anxiety and depression)
and other disorders of lesser frequency but often great severity, such as bipolar
disorder, pervasive developmental disorder, and psycho-physiological disorder.

Serious Injury

An injury that requires the provision of medical treatment beyond what is
commonly considered first aid.

Serious Mental Illness

Pursuant to §1912(c) of the Public Health Service Act, adults with serious mental
illnesses are persons: (1) age 18 and over and (2) who currently have, or at any time
during the past year have had a diagnosable mental, behavioral or emotional
disorder of sufficient duration to meet diagnostic criteria specified within DSM- IV
or their ICD-9-CM equivalent (and subsequent revisions) with the exception of
DSM-IV "V" codes, substance use disorders, and developmental disorders, which

are excluded, unless they co-occur with another diagnosable serious mental illness
and (3) for whom the disorder has resulted in functional impairment, which
substantially interferes with or limits one or more major life activities.
Service Plan

As used in the waiver application, the written document that specifies the waiver
and other services (regardless of funding source) along with any informal supports
that are furnished to meet the needs of and to assist a waiver participant to remain
in the community. The service plan must contain, at a minimum, the types of
services to be furnished, the amount, the frequency and duration of each service,
and the type of provider to furnish each service. FFP may only be claimed for the
waiver services that are furnished to a waiver participant when they have been
authorized in the service plan. In the application, “service plan” is synonymous with
the statutory term “plan of care.”

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Single Audit Act
Amendments of 1996

The Federal law (P.L. 104-156, U.S.C. Title 31, Chapter 75) that establishes the
standards and requirements for the performance of audits of entities that receive
federal funds, including Medicaid.

Single State Agency

The agency within state government that has been designated pursuant to
§1902(a)(5) of the Act as responsible for administration of the state plan. The single
state agency is not required to directly administer the entire Medicaid program; it
may provide that administrative functions are conducted by other state (or local)
agencies or private contractors (or both) so long as the Single State Agency
maintains ultimate authority and responsibility for the administration of the state
plan. In the waiver application, the Single State Agency is referred to as the
Medicaid agency.

SSI Criteria State

A state that uses the SSI income and resource criteria to determine eligibility for
Medicaid for aged, blind and disabled individuals but requires that such individuals
apply separately to the state for Medicaid.

Social Security Act

Public Law 74-271, enacted on August 14, 1935, and its subsequent amendments.
The Medicaid program is authorized in Title XIX of the Act; the Medicare program
is authorized in Title XVIII of the Act; and, Title XXI of the Act establishes the
State Children’s Health Insurance Program.

Social Security
Administration
(SSA)

The federal agency that, among its other duties, administers the Old Age, Survivors,
and Disability Insurance (OASDI) and Supplemental Security Income (SSI)
programs and determines the initial entitlement to and eligibility for Medicare
benefits.

Social Security
Disability Insurance
(SSDI)

The system of federally provided payments to eligible workers (and, in some cases,
their families) when they are unable to continue working because of a disability.
Benefits begin with the sixth full month of disability and continue until the
individual is capable of substantial gainful activity.

SPA

See State Plan Amendment

Special Home and
CommunityBased
Waiver
Group

The eligibility group defined in 42 CFR §435.217 that is composed of individuals
in the community who would be eligible for Medicaid if institutionalized to whom
the state elects to provide waiver services. Also referred to as the §435.217 group.

Special Income Group

The eligibility group defined in 42 CFR §435.236 that is composed of individuals
in institutions who have too much income to qualify for SSI benefits but not enough
income to cover their expensive long-term care. This group also is referred to as
individuals who qualify for Medicaid under the 300% of SSI rule. A state may
provide that persons with incomes up to 300% (or a lower percentage specified b y
the state) of the SSI FBR may qualify for Medicaid when institutionalized.

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Spenddown

For most Medicaid eligibility categories, having countable income above a
specified amount disqualifies an individual from Medicaid. However, in some
eligibility categories—most notably the “medically needy”—individuals may
qualify for Medicaid coverage even though their countable incomes are higher than
the specified income standard by “spending down” to the medically needy income
level. Under this process, the medical expenses that an individual incurs during a
specified period are deducted from the individual’s income during that period. Once
the individual’s income has been reduced to a state-specified level by subtracting
incurred medical expenses, the individual qualifies for Medicaid benefits for the
remainder of the period.

Spousal
Impoverishment
Protections

The term used to describe the set of eligibility rules that states are required to apply
under the provisions of §1924 of the Act in the case when a Medicaid beneficiary
resides in a nursing facility and his or her spouse remains in the community. The
rules, which specify minimum amounts of income and resources each spouse is
allowed to retain without jeopardizing the institutionalized spouse’s eligibility for
Medicaid benefits, are designed to prevent the impoverishment of the community
spouse. Under certain circumstances, a state may elect to use these rules in
determining eligibility for a waiver.

SSA

See Social Security Administration

SSDI

See Social Security Disability Insurance

SSI

See Supplemental Security Income

State Medicaid
Director (SMD) Letter

A formal letter issued by the Director of the Center for Medicaid and State
Operations (CMCS) to state Medicaid directors for the purpose of providing
technical guidance or updated information regarding the operation of the Medicaid
program.

State Medicaid Plan
(State Plan)

The document that specifies the eligibility groups that a state will serve through its
Medicaid program, the benefits that the state covers, and how the state addresses
additional Federal Medicaid statutory requirements concerning the operation of its
Medicaid program. The State plan must be submitted to and approved by CMS,
acting on behalf of the Secretary of HHS. Proposed changes to the state plan take
the form of state plan amendments (SPAs) that are submitted to, reviewed and
approved by CMS.

State Plan

See State Medicaid Plan

State Plan
Amendment (SPA)

In order to change its Medicaid eligibility criteria or its covered benefits or its
provider reimbursement methodology, a state must amend its state Medicaid plan
to reflect the proposed change. Similarly, states must conform their state plans to
changes in federal Medicaid law. In either case, the state must submit a state plan
amendment (SPA) to CMS for approval.

State Supplementary
Payment (SSP)

The amount (if any) by which a state elects to supplement the basic SSI cash
assistance payment to individuals and couples.

State Unemployment
Tax (SUTA)

The tax paid to a state workforce agency that is used solely for the payment of
benefits to eligible unemployed workers.

Statewideness

The requirement in §1902(a)(1) of the Act that a state must operate its Medicaid
programs throughout the state and may not exclude individuals residing in, or
providers operating in, particular counties or municipalities. This requirement may
be waived under §1115, §1915(b), and §1915(c) waivers.

Supplemental (or

Any payment to a Medicaid provider that is in addition to the state’s standard

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Enhanced) Payment

direct payment for services rendered to a Medicaid beneficiary and billed by a
provider.

Supplemental Security The federal entitlement program established under Title XVI of the Act to provide
Income (SSI)
cash assistance to certain persons who are aged, blind, or disabled and whose income
and resources fall below the SSI income and resource standards that are set by the
Federal government.
Supports Broker
(Brokerage)

See Information and Assistance in Support of Participant Direction

SUTA

See State Unemployment Tax

Target Group

A group of Medicaid beneficiaries who have similar needs, conditions or
characteristics to whom a state elects to furnish waiver services. Common HCBS
waiver target groups include older persons, individuals with physical disabilities,
persons who have experienced a brain injury, and persons with developmental
disabilities. A state must specify the target group(s) that it serves in the waiver.

Targeted Case
Management

As provided in §1915(g) of the Act, optional state plan services that are furnished to
assist Medicaid beneficiaries to gain access to needed medical, social, educational,
and other services. TCM services may be furnished to target groups specified by the
state on a statewide or less than statewide basis.

Technology
Dependent

A person who needs both a medical device to compensate for the loss of a vital body
function and substantial and ongoing nursing care to avert death or further disability.

TCM
TEFRA 134
Telemedicine

See Targeted Case Management
See Katie Beckett Option
The use of communication equipment to link health care practitioners and patients in
different locations. This technology is used by health care providers for many
reasons, including increased cost efficiency, reduced transportation expenses,
improved patient access to specialists and mental health providers, improved quality
of care, and better communication among providers.

Temporary Assistance
for Needy Families
(TANF)

A block grant program that makes federal matching funds available to states for cash
and other assistance to low income families with children. TANF replaced the Aid to
Families with Dependent Children (AFDC) program. States may but are not required
to extend Medicaid coverage to all families who receive TANF benefits; however, as
provided in §1931 of the Act, a state must extend Medicaid to families with children
who meet the eligibility criteria that were in effect under its AFDC programs as of
July 16, 1996.

Third Party Liability
(TPL)

The Medicaid term used to refer to another source of payment for Medicaid covered
services provided to a beneficiary. For example, if a Medicaid beneficiary is also
eligible for Medicare, the Medicare program is liable for the costs of that
beneficiary’s hospital and physician services, up to the limit of Medicare’s coverage.
From the Medicaid program’s standpoint, Medicare is a liable third party. Other
examples include private health insurance coverage, automobile and other liability
insurance, and medical child support.

Instructions: Version 3.6 HCBS Waiver Application

331

Timeout

Time out means the restriction of an individual for a period of time to a designated
area from which the person is not physically prevented from leaving for the purpose
of providing the person an opportunity to regain self-control.

Title XIX

Refers to Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), the Federal
statute that authorizes the Medicaid program.

TPL

See Third-Party Liability

Tribal Government

The government of an ‘‘Indian tribe,’’ including an Indian or Alaska Native tribe,
band, nation, pueblo, village, or community that the Secretary of the Interior
acknowledges to exist as an Indian tribe pursuant to the Federally Recognized
Indian Tribe List Act of 1994, 25 U.S.C. 479a.

TWWIIA

Ticket to Work & Work Incentives Improvement Act of 1999 (P.L. 106-170). See
also Medicaid Buy-In.

Unduplicated
Participant

A unique individual who receives waiver services at any point during a waiver year,
regardless of the length of time that the person is enrolled in the waiver or the
amount of waiver services that the person receives. A person who enters, exits and
then reenters the waiver is considered to be one unduplicated participant.

Waiver Capacity

A term used to describe the maximum unduplicated number of individuals who
may participate in a waiver during a year.

Waiver Period

The period of time that a waiver is in effect. In the case of a new waiver, the waiver
period is three years. In the case of a renewal, the waiver period is five years.

Waiver Year

The 12-month period that begins on the date the waiver takes effect and the 12month period following each subsequent anniversary date of the waiver.

Workers’
Compensation

State-mandated system under which employers assume the cost of medical
treatment and wage losses for employees who suffer job-related illnesses or
injuries, regardless of who is at fault.

Instructions: Version 3.6 HCBS Waiver Application

332

[Page left intentionally blank for double-sided copying]

Instructions: Version 3.6 HCBS Waiver Application

333

Index to the Application and Instructions

The Index is organized by topic. Each topic is indexed by its location within the waiver application
(appendix, sub-appendix, and item reference). “App” means the “Application” (Module 1 of the waiver
request). In addition, each topic is indexed by the location in the instructions where the topic is discussed
or the Resource Attachment (“Attach.”) that contains additional information about a topic.
Topic
90-Day Clock
§435.217 Eligibility Group (Eligibility Groups Served Under the Waiver)
§1616(e) of the Social Security Act
§1616(e) of the Social Security Act (Facilities Subject to)
§1915(c) of the Social Security Act
§1915(c) Waivers that Operate with Concurrent Managed Care
Abuse Registry Screening
Access to Services (Requirement)
Access to Services by Limited English Proficient Persons
Additional Criteria (Target Group Specification)
Additional Dispute Resolution Process
Additional Limits on Amount of Waiver Services
Additional Requirements (General)
Administration and Operation (Waiver)
Adult Companion Services (Core Service Definition)
Adult Day Health (Core Service Definition)
Adult Foster Care (Core Service Definition)
Allocation of Waiver Capacity (by geographic area)
Allowance for a Family (Post-Eligibility)
Allowance for a Spouse (Post-Eligibility)
Allowance for the Needs of the Waiver Participant (Post-Eligibility)
Alternate Provision of Case Management to Waiver Participants
Amending an Approved Waiver Using the Version 3.6 Waiver Application
Amount of Payment to Public Providers
Annual Waiver Report (Assurance)
Annual Waiver Report (Description)
Applicable Limits on Amount, Frequency or Duration
Application for a §1915(c) Home and Community-Based Services Waiver Module 1
Approved Effective Date
Assessment Methods and Frequency (Oversight of Contracted and/or
Local/Regional Non-State Entities)
Assisted Living (Core Service Definition)
Assistive Technology (Core Service Definition)
Assurances
Authorizing Signature
Availability of Participant Direction by Type of Living Arrangement
Average Length of Stay
Bereavement Counseling (Core Service Definition)

Instructions: Version 3.6 HCBS Waiver Application

Application

Instructions

N/A
B-4-b
N/A
C-2-c
N/A
N/A

20-21
81-82
Attach. C
107
Attach. A
21-22

C-2-b
App. (Sect. 6-D)
B-8
B-1-b
F-2
C-4
App. (Sect. 6)
A
N/A
N/A
N/A
B-3-e
B-5
B-5
B-5
C-1-b
App. (Sect. 1-C)
I-3-e
N/A
N/A
C-3
App. (Module 1)
App. (Sect. 1-E.2)
A-6

107
45-46
102
68-69
221-223
131-135
44-48
52-64
170-171
146
168-169
78-79
84
84
83-84
105
35-36
261-262
29
29-31
126-127
35-51
37
61-62

N/A
N/A
App. (Sect. 5)
App. (Sect. 8)
E-1-c
J-2-b

169-170
164-165
43
48-49
195-196
276

N/A

172-173

334

Topic

Billing and Claims Record Maintenance Requirement
Billing Validation Process
Brief Waiver Description
Budget Authority (Participant Direction)
Budget Authority (Participant Decision Making Authority)
Budget Flexibility (Participant Direction)
Budget Limit by Level of Support
Carry Over Services (Service Specifications)
Case Management (When not provided as a waiver service)
Case Management (Core Service Definition)
CMS-372(S) Report
CMS Oversight of State Waiver Operations
CMS Ongoing Waiver Application Activities
CMS Report to State Prior to Waiver Renewal
CMS Technical Assistance
Certifying Public Expenditures
Children’s Education Services (Coverage)
Children’s Foster Care Services (Coverage)
Chore Services (Core Service Definition)
Combining Waivers
Community Transition Services (Core Service Definition)
Community Transition Services (Coverage)
Companion Services (Core Service Definition)
Comparability (waiver of)
Components of the Waiver Request
Concurrent Operation with Other Programs
Consultative Clinical and Therapeutic Services (Core Service Definition)
Contact Person(s)
Contracted Entities (Waiver Administration)
Contracted Entities (Assessment of Performance)
Contracts with MCOs, PIHPs, or PAHPs
Converting a Model Waiver to a Regular Waiver
Co-Payments (Waiver Services)
Core Service Definitions
(Individual) Cost Limit in Excess of Institutional Costs
(Individual) Cost Limit Lower than Institutional Services
Cost Neutrality Demonstration
Cost Neutrality Formula
Cost Sharing (Participant)
Criminal History/Background Investigations
Critical Events or Incidents
Critical Events or Incidents: Oversight Responsibilities
Critical Event or Incident Reporting Requirements
Critical Events or Incidents (Responsibility for Review and Response)

Instructions: Version 3.6 HCBS Waiver Application

Application
I-2-e
I-2-d

Instructions

258
257258

App. (Sect. 2)
E-2-b
E-2-b-i
E-2-b-iv
C-4
C-3
C-1-b
N/A
N/A
N/A
N/A
N/A
N/A
I-2-c
N/A
N/A
N/A
N/A
N/A
N/A
N/A
App. (Sect. 4)
App. (Sect. 3)
App. (Sect. 1-G)
N/A
App. (Sect. 7)
A-4
A-5; A-6
I-3-g-iii
N/A

40
214-217
214
216-217
132
125
105-106
141-142
29-30
30-31
16-17
31
27
256-257
121
121
170
24
165-166
122
170-171
41
40
39
171-172
48
60-61
61-62
265-266
24

I-7-a
N/A
B-2-a
B-2-a
Appendix J
J-1
I-7-b
C-2-a
G-1
G-1-e
G-1-b
G-1-d

271-273
140-177
70-72
70-72
272-281
272-273
271-273
106-107
225
228-229
225-226
227-228

335

Topic

Day Habilitation (Core Service Definition)
Day Treatment (Core Service Definition)
Derivation of Estimates (Cost Neutrality)
Description of Participant Direction (in Waiver)

Direct Payment
Distribution of Waiver Operational and Administrative Functions
Division Review (Problem Resolution)
Education (Core Service Definition)
Effective Date (Proposed or Approved)
Election of Participant Direction (by Participant)
Eligibility Groups
Employer Authority
Employer Authority (Participant Decision Making Authority)
Employer Status (Participant)
Enhanced Payments
Entrants to Waiver (Selection)
EPSDT Services (Relationship to Waiver Services)
Evaluation/Re-evaluation of Level of Care
Exclusion of Medicaid Payment for Room and Board
Expenditure Safeguards (Participant Direction)
Extended State Plan Services
Extended State Plan Services (Core Service Definition)
Extensions
Facilities Subject to §1616(e) of the Social Security Act
Factor D (Derivation of Cost Neutrality Estimates)
Factor D (Estimate)
Factor D′ (Derivation of Cost Neutrality Estimates)
Factor G (Derivation of Cost Neutrality Estimates)
Factor G′ (Derivation of Cost Neutrality Estimates)
Fair Hearing (Opportunity to Request)
Fair Hearing (Requirement)
Feasible Alternatives (Informing of)
Federal Administration of the HCBS Waiver Authority
FFP Limitation (Requirement)
Federal Regulations (Selected)
Financial Accountability
Financial Integrity and Accountability
Financial Management Services (Whether included)
Financial Management Services (Core Service Definition)
Financial Management Services (Overview)
Financial Management Services (Provision of)
Flow of Billings
Free Choice of Provider (Requirement)
Freedom of Choice (Between Institutional and Waiver Services)
Freedom of Choice (Maintenance of Forms)

Instructions: Version 3.6 HCBS Waiver Application

Application
N/A
N/A
J-2-c
E-1-a

Instructions

148-150
157-159
276-280
194-195

I-3-b
A-7
N/A
N/A
App. (Sect. 1-E)
E-1-d
B-4
E-2-a
E-2-a-ii
E-2-a-i
I-3-c
B-3-f
N/A
B-6
I-5
E-2-b-v
C-1-a
N/A
N/A
C-2-c
J-2-c-i
J-2-d
J-2-c-ii
J-2-c-iii
J-2-c-iv
F-1
App. (Sect. 6-G)
B-7-a
N/A
App. (Sect. 6-F)
N/A
Appendix I
I-1
E-1-h
N/A
N/A
E-1-i
I-2-b
App. (Sect. 6-E)
B-7
B-7-b

259-260
62-63
19
150
37
196-198
80-82
211-214
212-214
211-212
260-261
79-80
120-121
92-99
269
217
103-104
174-175
25
107
277-278
281-282
278-279
279-280
280
220-221
46
100
13
46
Attach. B
248-272
248-250
203-204
176-177
200-203
204-206
2255
48
99-100
100

336

Topic

Freedom of Choice (Procedures)
General Service Specifications
Geographic Limitation (Waiver of Statewideness)
Glossary of Terms and Abbreviations
Goals for Participant Direction
Grievance/Complaint System
Habilitation Services (Core Service Definition)
Home Accessibility Modifications (Core Service Definition)
HCBS Waiver Resources on the Web
Home Health Aide Services (Core Service Definition)
Homemaker Services (Core Service Definition)
Implementation of the Web-Based Application
Income and Resources for the Medically Needy (Waiver)
Independent Advocacy (Participant Direction)
Individual Cost Limit
Individual Cost Limit (Method of Implementation)
Individual Cost Limit (Participant Safeguards)
Individual Directed Goods and Services (Core Service Definition)
Information and Assistance in Support of Participant Direction (Core Service Definition)
Information and Assistance in Support of Participant Direction
Information and Assistance in Support of Participant Direction (Overview)
Information Furnished to Participants (Participant Direction)
Informed Choice of Providers (Service Plan Development)
Informing Participant of Budget Amount (Participant Direction))
Inpatients (Prohibition against furnishing waiver services to)
Institutional (Individual) Cost Limit
Instructions – Overview
Involuntary Termination of Participant Direction
Joint Central Office/Regional Office Waiver Review Process
Legally Responsible Individuals (Provision of Personal Care or Similar Services by)
Legislative History of the HCBS Waiver Authority
Level(s) of Care (Under the Waiver)
Level of Care Criteria
Level of Care (Evaluation/Reevaluation)
Level of Care Instrument(s)
Level of Care (Process for Evaluation/Reevaluation)
Limitation on the Number of Participants Served at any Point in Time
Limited English Proficient Persons (Requirement)
Limited English Proficient Persons (Access to Services by)
Limited Implementation of Participant Direction (Waiver of Statewideness)
(Additional) Limits on Amount of Waiver Services
Limits on Amount, Frequency or Duration
Limits on Sets of Services
Line of Authority (Waiver Operation)
Live-In Caregiver (Core Service Definition)
Live-In Caregiver (Payment for Rent and Food Expenses)

Instructions: Version 3.6 HCBS Waiver Application

Application

B-7-a
C-2
App. (Sect. 4-C)
N/A
E-1-n
F-3
N/A
N/A
N/A
N/A
N/A
N/A
App. (Sect. 4-B)
E-1-k
B-2; B-2-a
B-2-b
B-2-c
N/A
N/A
E-1-j
N/A
E-1-e
D-1-f
E-2-b-iii
App. (Sect. 6-B)
B-2-a
N/A
E-1-m
N/A
C-2-d
N/A
App. (Sect. 1-F)
B-6-d
B-6
B-6-e
B-6-f
B-3-b
App. (Sect. 6-K)
B-8
App. (Sect. 4-C)
C-4
C-3
C-4
A-1
N/A
I-6

Instructions

100
106-115
44-45
285-313
210-211
223-224
146-147
161-162
14
143-144
142
16
41-42
208-209
69-72
72
72-73
172
175-176
206-208
206
198-199
184
215-216
44-45
70-72
1-3
210
19
108-110
4
37-39
94-95
92-99
95-96
96
75
48
102
42-43
131-135
126-127
131-133
54-55
161
269-270

337

Topic

Local/Regional Non-State Entities (Role of in Waiver Administration and Operation)
Local/Regional Non-State Entities (Assessment of Performance)
Maintenance of Evaluation/Reevaluation (of Level of Care) Records
Maintenance of Forms (Freedom of Choice)
Maintenance of Service Plan Forms
Maximum Age Limit (Transition of Individuals Affected by)
Medicaid Agency Oversight of Operating Agency Performance
Medicaid Eligibility Groups Served in the Waiver
Medicaid Management Information System
Medical and Remedial Care Expenses (Post-Eligibility)
Medication Administration by Waiver Providers
Medication Administration (State Oversight Responsibility)
Medication Error Reporting
Medication Management and Administration
Medication Management and Follow-up
Medication Management (State Oversight and Follow-up)
Mental Health Services (Core Service Definitions)
Method of Implementation of Individual Cost Limit
Method of Payment – MMIS
Miller Trusts
Model Waiver
Monitoring Safeguards
New Waiver Applications
New Waiver to Replace an Approved Waiver
No (Individual) Cost Limit
Non-Federal Matching Funds
Non-Medical Transportation (Core Service Definition)
Notice to Tribal Governments (Requirement)
Number of Individuals Served (in the waiver)
Olmstead Letter #3
Olmstead Letter #4
Ongoing CMS-State Dialogue During the Waiver Period
Open Enrollment of Providers
Operating Agency (Specification)
Operating Agency Performance (Medicaid Agency Oversight)
Operating Agency Representative
Operational and Administrative Functions (Waiver)
Operational and Administrative Functions (Distribution of)
Opportunities for Participant Direction
Opportunity to Request a Fair Hearing
Organization of the Version 3.6 HCBS Waiver Application
Organized Health Care Delivery System
Other Services (Coverage)
Other State Policies Concerning Payment for Waiver Services Furnished by Relatives/
Legal Guardians
Out-of-State Services (Coverage)

Instructions: Version 3.6 HCBS Waiver Application

Application

A-4
A-5; A-6
B-6-j
B-7-b
D-1-i
B-1-c
A-2
B-4; B-4-b
I-3-a
B-5
G-3-c
G-3-c-iv
G-3-c-iii
G-3
G-3-b
G-3-b-ii
N/A
B-2-b
I-3-a
N/A
App. (Sect. 1-D)
D-2-b
N/A
N/A
B-2-a
I-4
N/A
App. (Sect. 6 -J)
B-3; J-2-a
N/A
N/A
N/A
C-2-f
A-1
A-2
App. (Sect. 7-B)
N/A
A-7
E-2
F-1
N/A
I-3-g-ii
C-1-a
C-2-e

Instructions

60-61
61-62
98
100-101
186
69
55-57
80-82
258-259
84-85
239
240-241
240
237-242
238
238-239
157
72
258-259
85-86
36
187-188
21
22-23
70-71
266-269
162-163
47-48
74-80;275-276
Attach. C
Attach. C
30-31
112-114
54-55
55-57
48
57-59
62-63
211-217
220-221
15-16
263-265
103
110-112

N/A

122-123

338

Topic

Oversight of Contracted and/or Local/Regional Non-State Entities (Waiver Administration)
Overview of the §1915(c) HCBS Waiver Authority
Oversight Responsibility (Restraints or Seclusion)
Participant Access and Eligibility
Participant Budget Authority
Participant Cap (Unduplicated Number of Participants)
Participant-Centered Planning and Service Delivery
Participant Co-Payments for Waiver Services and Other Cost Sharing
Participant Decision Making Authority (Employer Authority)
Participant-Directed Budget
Participant-Directed Services
Participant Direction (Availability by Type of Living Arrangement)
Participant Direction by a Representative
Participant Direction (Election by Participant)
Participant Direction (Goals)
Participant Direction (Information Furnished to Participants)
Participant Direction of Services
Participant Direction of Services (Coverage)
Participant Direction Opportunities
Participant Direction (Involuntary Termination)
Participant Direction (Voluntary Termination)
Participant Direction (Waiver of Statewideness)
Participant – Employer Authority
Participant Exercise of Budget Flexibility (Participant Direction)
Participant Limit (Number of Individuals Served)
Participant Limit Reductions
Participant Rights
Participant Safeguards
Participant Safeguards (Individual Cost Limit)
Participant Services
Participant Training and Education (Critical Incidents)
Payment
Payment for Waiver Services Furnished by Relatives/Legal Guardians
Payments to State or Local Government Providers
Personal Care (Core Service Definition)
Personal Emergency Response System (Core Service Definition)
Persons with Mental Illnesses (Target Group)
Pharmacy Services (Coverage)
Phase-In or Phase Out
Phase-In or Phase-Out Schedule
Policies Concerning New and Renewal Waiver Applications
Policies Concerning Waiver Amendments
Post-Approval Activities
Post-Eligibility Treatment of Income
Post-Eligibility Treatment of Income Using Spousal Impoverishment Rules
Prevocational and Supported Employment Services (Coverage)

Instructions: Version 3.6 HCBS Waiver Application

Application

A-5 & A-6
N/A
G-2-b-ii
Appendix B
E-2-b
B-3-a
Appendix D
I-7
E-2-a-ii
E-2-b-ii
E-1-g
E-1-c
E-1-f
E-1-d
E-1-n
E-1-e
Appendix E
N/A
E-2
E-1-m
E-1-l
App. (Sect. 4-C)
E-2-a
E-2-b-iv
B-3; B-3-a
N/A
Appendix F
Appendix G
B-2-c
Appendix C
G-1-b
I-3
C-2-e
I-3-d
N/A
N/A
B-1-a
N/A
B-3-d
Attach. #1 – B-3
N/A
N/A
N/A
B-5
B-5-a
N/A

Instructions

61-62
1-3
233-235
65-102
214-217
74
178-189
271-273
212-214
214-215
199-203
195-196
199
196-198
210-211
198-199
191-217
122
211-217
210
209-210
42-43
211-214
216-217
73-75
24-25
220-224
225-242
72-73
102-177
225-226
258-266
110-112
261
144-146
165
67-68
119
76-78
77-78
19-25
26-27
29-31
82-92
86-87
121-122

339

Topic

Prevocational Services (Core Service Definition)
Principal Features of the HCBS Waiver Authority
Private Duty Nursing (Core Service Definition)
Procedures to Ensure Timely Reevaluations (of Level of Care)
Procedures (Informing of Feasible Alternatives and Choice of Services)
Process for Level of Care Evaluation/Reevaluation
Process for Making Service Plan Subject to Medicaid Agency Approval
Process for Offering Opportunity to Request a Fair Haring
Proposed Effective Date
Prospective Individual Budget Amount
Provider Administration of Medications
Provider Enrollment (Open)
Provider Qualifications (Service Specifications)
Provider Qualifications (Verification)
Provider Requirements (Service Specifications)
Provider Retention of Payments
Provision of Financial Management Services
Provision of Personal Care or Similar Services by Legally Responsible Individuals
Provision of Waiver Services Out-of-State
Psychosocial Rehabilitation Services (Core Service Definition)
Public Input (Waiver Development)
Public Providers (of Waiver Services)
Purchase of Certain Goods and Services Through an FMS Entity
Purpose of the HCBS Waiver Program
Qualifications of Individuals Performing Initial Evaluation (of Level of Care)
Qualifications of Individuals Who Perform Reevaluations (of Level of Care)
Quality Improvement: Administrative Authority
Quality Improvement: Level of Care
Quality Improvement: Qualified Providers
Quality Improvement: Service Plans
Quality Improvement: Health and Welfare
Quality Improvement: Financial Accountability
Quality Improvement: Systems Improvement
Rate Determination Methods
Rates, Billing and Claims
Reasonable Indication of Need for Services
Reassignment of Payments to a Governmental Agency
Reevaluation Schedule (Level of Care)
Regular Post Eligibility Treatment of Income (§209b State)
Regular Post Eligibility Treatment of Income (§1634 and SSI criteria State)
Rehabilitative Services (Coverage)
Relationship of Waiver Services to EPSDT Services
Relationship of Waiver Services to State Plan Services
Relatives/Legal Guardians (Payment for Services Furnished by)
Renewal Applications
Request for Additional Information (RAI)

Instructions: Version 3.6 HCBS Waiver Application

Application

N/A
N/A
N/A
B-6-i
B-7-a
B-6-f
D-1-g
F-1
App. (Sect. 1-E.1)
C-4
G-3-c.i
C-2-f
C-3
C-3
N/A
I-3-f
E-1-i
App. C-2-d
N/A
N/A
App. (Sect. 6-I)
I-3-d & I-3-e
N/A
Application
B-6-c
B-6-h
App. A
App. B
App. C
App. D
App. G
App. I
App. H
I-2-a
I-2
B-6-a
I-3-g-i
B-6-g
B-5-c-1 or B-5-c-2
B-5-b-1 or B-5-b-2
N/A
N/A
N/A
C-2-e
N/A
N/A

Instructions

150-152
4-8
167-168
97-98
100
96
184-185
220-221
36-37
132
239
112-114
128-129
129-130
123,127-129
262-263
204-206
108-110
122-123
159-160
46-47
261-262
202-203
N/A
94
97
63-64
98-99
114-115
188-189
241-242
251
243-247
252-255
252-258
92-93
263
96-97
88
87-88
121
120-121
118-119
110-112
23
20-21

340

Topic

Request Information
Requesting Division Review
Requirements Concerning the Specification of the Scope of Waiver Services
Requirements: Waiver Administration and Operations
Reserved Waiver Capacity
Residential Habilitation (Core Service Definition)
Respite Care (Core Service Definition)
Response to Critical Events or Incidents
Responsibility for Assessment of Performance of Contracted and/or Local/Regional NonState Entities (Waiver Administration)
Responsibility for Oversight of Critical Incidents or Events
Responsibility for Performing Evaluations and Reevaluations (of Level of Care)
Responsibility for Review of and Response to Critical Events or Incidents
Responsibility for Service Plan Development
Restraints and Restrictive Interventions – Safeguards
Restraints or Seclusion – Safeguards
Restraints or Seclusion – State Oversight Responsibility
Restrictive Interventions
Restrictive Interventions – Safeguards Concerning Use
Restrictive Interventions – State Oversight Responsibility
Review of CMS-372(S)
Risk Assessment and Mitigation (Service Plan Development)
Role of Local/Regional Non-State Entities
Room and Board (Exclusion from claim for FFP)
Room and Board (Exclusion from Medicaid payment)
Safeguards Concerning Restraints and Restrictive Interventions
Safeguards Concerning the Use of Restraints or Seclusion
Safeguards Concerning the Use of Restrictive Interventions
Scheduled (Waiver) Phase-in or Phase-Out
Selection of Entrants to the Waiver
Self-Employment (Supported Employment)
Service Delivery Method (Service Specifications)
Services in Facilities Subject to §1616(e) of the Social Security Act
Service Plan Development
Service Plan Development Process
Service Plan Development (Responsibility for)
Service Plan Development Safeguards
Service Plan Forms (Maintenance)
Service Plan Implementation and Monitoring
Service Plan Monitoring Safeguards
Service Plan (Making Subject to Medicaid Agency Approval)

Instructions: Version 3.6 HCBS Waiver Application

Application

App. (Sect. 1)
N/A
N/A
N/A
B-3-c
N/A
N/A
G-1
A-5

Instructions

35-36
19
116-118
52-53
75-76
147-148
156-157
225-229
61

G-1-e
B-6-b
G-1-d
D-1-a
G-2
G-2-a-i
G-2-a-ii
G-2-b
G-2-b-i
G-2-b-ii
N/A
D-1-e
A-4
App. (Sect. 6-C)
I-5
G-2
G-2-a-i
G-2-b-i
B-3-d
B-3-f
N/A
C-3
C-2-c
D-1
D-1-d
D-1-a
D-1-b
D-1-i
D-2; D-2-a
D-2-b
D-1-g

228-229
93-94
227-228
179
229-237
230-231
231-232
232
232-233
233-234
30
183-184
60-61
45
269
229-237
230-231
232-233
76-78
79-80
152-156
130
107
178-186
182-183
179
180-181
185-186
186-187
187-188
185-185

341

Topic

Service Plan (Requirements)
Service Plan Review and Update
Service Specifications
Skilled Nursing (Core Service Definition)
Special Considerations: §1915(c) Waivers with Concurrent
Specialized Medical Equipment and Supplies (Core Service Definition)
Specification of the Scope of Services (Requirements)
Specification of the Waiver Target Group(s)
Splitting a Waiver
Spousal Impoverishment Rules (Post-Eligibility)
State Classification (Medicaid Eligibility)
State Grievance/Complaint System
State Line of Authority for Waiver Operation
State Medicaid Agency Representative
State Medicaid Director Letters (Selected)
State Oversight Responsibility (Restraints)
State Policies Concerning Payment for Waiver Services Furnished by
Statewideness (Waiver)
Statutory Basis and Legislative History of the HCBS Waiver Authority
Statutory Services
Strengthening HCBS Waiver Quality Assurance/Quality Improvement
Submission of Applications
Summary of Services Covered
Supplemental or Enhanced Payments
Supported Employed (Core Service Definition)
Supported Employment Services (Coverage)
Supporting the Participant in Service Plan Development
Supports for Participant Direction (Coverage)
Target Groups
Target Groups – Additional Criteria
Technical Assistance (CMS)
Technical Guidance Concerning Service Coverage
Termination (Waiver)
Training and Counseling Services for Unpaid Caregivers (Core Service Definition)
Transition of Individuals Affected by Maximum Age Limit
Transition Plan
Transition Services (to Facilitate Transition of Institutionalized Persons to the
Community – Coverage)
Transportation – Non-Medical (Core Service Definition)
Tribal Governments (Notice)
Type of (Waiver) Request (New, Renewal, Replacement, Amendment)
Type of Waiver (Regular or Model)
Unduplicated Number of Participants (Participant Cap)
Use of Contracted Entities (Waiver Administration)

Instructions: Version 3.6 HCBS Waiver Application

Application

App. (Sect. 6-A)
D-1-h
C-3
N/A
N/A
N/A
N/A
B-1
N/A
B-5-g
B-4-a
F-3
A-1
App. (Sect. 7-A)
N/A
G-2-a-ii
C-2-e
App. (Sect. 4-C)
N/A
C-1-a
N/A
N/A
C-1; C-1-a
I-3-c
N/A
N/A
D-1-c
C-1-a

Instructions

44
185
116-131
166-167
21-22
163-164
116-118
65-66
23-24
90-91
80-81
223-224
54-55
48
Attach. C
231-232
110-112
42-43
4
103
13
18-19
102-105
260-261
152-156
121-122
181-182
104

B-1-a
B-1-b
N/A
N/A
N/A
N/A
B-1-c
App. (Attachment #1)
N/A

66-68
68-69
27
124-125
27-28
171
69
49-51
122

N/A
App. (Sect. 6-J)
App. (Sect. 1-C))

162-163
47-48
35-36

App. (Sect. 1-D)

36

B-3-a; J-2-a
A-3

74; 275-276
59-60

342

Topic

Use of Spousal Impoverishment Rules (Post-Eligibility)
Use of the Version 3.6 Waiver Application
Vehicle Modifications (Core Service Definition)
Verification of Provider Qualifications
Voluntary Termination of Participant Direction
Waiver Administration and Operation
Waiver Administration and Operation (Requirements)
Waiver Application Submission Requirements, Processes and Procedures
Waiver Assurances and Other Federal Requirements (Quality Improvement Strategy)
Waiver Capacity (Allocation by Geographic Area)
Waiver (Income and Resources for the Medically Needy)
Waiver of Comparability
Waiver of Statewideness
Waiver of Statewideness (Geographic Limitation)
Waiver of Statewideness (Limited Implementation of Participant Direction)
Waiver Operational and Administrative Functions (Defined)
Waiver(s) Requested
Waiver Service Specifications
Waiver Target Groups
Waiver Termination
Waiver Title
Waiver of Statewideness (Limited Implementation of Participant Direction)

Instructions: Version 3.6 HCBS Waiver Application

Application
B-5-a
N/A

Instructions

86-87
32

N/A
C-3
E-1-l
Appendix A
N/A
N/A
N/A
B-3-e
App. (Sect. 4-B)
App. (Sect. 4-A)
App. (Sect. 4-C)
App. (Sect. 4-C)
App. (Sect. 4-C)
N/A
App. (Sect. 4)
C-3
B-1
N/A
App. (Section 1-B)
App. (Sect. 4-C)

162
129-130
209-210
52-64
52-53
18-19
8-10
78-79
41-42
41
42-43
42
42-43
57-59
40-43
116-118
65-69
27-28
35
42-43

343