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HCBS Transition Plans Update

February 27, 2017

State Medicaid agencies are in the process  of revising their Home and Community-Based Services (HCBS)  transition plans, to fully reflect  the Centers for Medicare and Medicaid Services (CMS) Final Rule, issued on January 10, 2014, which requires all states to ensure that settings and services receiving Medicaid HCBS funding are truly integrated in the community, with specifics detailed in the Final Rule. The states must also produce HCBS Transition Plans that show how they will alter existing Medicaid-funded HCBS settings, rules, administrative codes, regulations, and training to comply with the Rule. The Rule applies to non-residential settings and programs, including employment programs, as well as residential programs and settings. CMS found that the states of Hawaii, New Mexico and Rhode Island had completed their systemic assessments and clearly outlined the remediation strategies they would use to address the issues identified in that assessment.


On January 13, 2017, the Center for Medicare and Medicaid Services (CMS) granted initial approval to Hawaii’s HCBS Transition Plan.

Several issues of compliance that Hawaii rectified in its latest revisions to the Plan relate to employment. First, Hawaii is revising many of the employment-related services offered under its I/DD waiver, which was renewed effective July 1, 2016. Hawaii is ending Prevocational Services and Group Employment Services. Prevocational Services have been replaced with a new service, “Discovery and Career Planning,” which must be fully compliant with the Rule. This is because prevocational services had previously been delivered in congregate, non-competitive settings that were not compliant with the Rule. Second, Hawaii added several requirements of the Rule into the state’s regulations, including the requirement that beneficiaries have opportunities to seek competitive integrated employment.

For more information, read Hawaii’s initial approval letter from CMS.

New Mexico 

On January 13, 2017, CMS granted initial approval to New Mexico’s HCBS Transition Plan.  

According to CMS, there are still several compliance-related issues that remain before New Mexico can receive final approval. First, all nonresidential settings in which beneficiaries are clustered together in order to receive services, including group supported employment and day programs, must be included in the Transition Plan. Second, New Mexico’s onsite visits, designed to determine whether a provider is required to undergo heightened scrutiny, rely too heavily on provider/site responses to state examiner questions and not heavily enough on consumer/beneficiary responses. CMS stated that New Mexico cannot rely exclusively on provider self-assessments when determining whether a setting is compliant with the Final Rule. CMS reiterated previous points it had made on reverse integration, including that nonresidential settings providing employment or day services were required to offer beneficiaries opportunities to interact with the community.

For more information, read New Mexico’s initial approval letter from CMS.

Rhode Island 

On January 13, 2017, CMS granted approval to Rhode Island’s HCBS Transition Plan.

Several issues of compliance that Rhode Island rectified in its latest revisions to the Plan relate to employment. First, the state confirmed that all existing sheltered workshops in Rhode Island will close by 2023. The state also explained the transition process through which all providers who run the sheltered workshops will now provide Supported Employment services in integrated settings in the community. All day programs, including day/employment programs and adult day programs, will be required to incorporate more integration into their models. Second, Rhode Island updated the rules and regulations pertaining to several developmental disability organizations that run day programs. One of the updates ensures that day programs serve as places where people receiving services will be referred to employment and volunteer opportunities in the community.

For more information, read Rhode Island’s initial approval letter from CMS.