Minnesota's implementation of the HCBS settings rule

On Feb. 12, 2019, the federal Centers for Medicare & Medicaid Services (CMS) gave its final approval to Minnesota’s Home and Community-Based Services Rule Statewide Transition Plan (PDF) to bring settings into compliance with the federal HCBS regulations. The HCBS settings rule transition period ended on March 17, 2023, expiring Minnesota’s statewide transition plan.

Background
Heightened scrutiny
Ongoing monitoring
Resources

Background

In 2014, CMS published regulations in the Federal Register that changed the definition of home and community-based settings for the 1915(c) and 1915(i) Medicaid HCBS waivers. The new definition considers a person’s experience and outcomes in addition to a setting’s location, geography or physical characteristics.

End of the statewide transition period for 1915(c) waivers and Alternative Care program

CMS gave states until March 2023 to bring their systems into compliance with the new HCBS settings requirements. In Minnesota, the HCBS settings rule transition period ended on March 17, 2023, for the following waivers and programs:
- Alternative Care (AC) program
- Brain Injury (BI) Waiver
- Community Alternative Care (CAC) Waiver
- Community Access for Disability Inclusion (CADI) Waiver
- Developmental Disabilities (DD) Waiver
- Elderly Waiver (EW).
The statewide transition plan Minnesota implemented to comply with the HCBS Settings Rule has expired. State statutes and federal waiver plans outline all requirements and standards related to HCBS waivers.

Archived information related to the transition period can be found on the Transition period archives webpage.
Heightened scrutiny

DHS identified settings presumed not to be HCBS settings. These settings needed to have a heightened scrutiny review. This includes settings in and around a:
- Hospital
- Nursing facility
- Intermediate care facility for persons with developmental disabilities (ICF/DD)
- Institution for mental disease (IMD).
Many states, including Minnesota, have not received final approval of settings CMS required to have a heightened-scrutiny review. CMS instructed states with settings that still need final approval to submit a corrective action plan (CAP). The CAP:
- Allows states to receive responses from CMS on settings that go through the heightened scrutiny review after the transition period ends.
- Gives states time to address issues CMS found.
The Evidentiary packages submitted for heightened scrutiny webpage includes evidentiary packages for settings submitted to CMS for heightened scrutiny review.

Minnesota’s approved corrective action plan for heightened scrutiny, can be viewed on the CMS Statewide Transition Plans website.
Ongoing monitoring

DHS will use several strategies at the provider, lead agency and recipient levels to ensure ongoing compliance with the home and community-based settings requirements. The primary mechanisms are the provider enrollment process, case management and licensing standards.

New presumptively institutional settings (for EW/AC only):

As of March 18, 2023, new adult day service, adult foster care, and customized living providers who provide services in settings that meet the definition of Prong 1 or Prong 2 (listed below) must be assessed by DHS to determine compliance with all HCBS standards.

Refer to the Requirements for new HCBS settings webpage for information about Minnesota’s process to assess new settings that require CMS heightened scrutiny.

Definitions
- Prong 1 settings: Located in a publicly or privately owned institution. For example, the waiver service setting and the institution share the same address, share a common wall or are connected by a walkway/skywalk or other enclosed corridor. Publicly owned means an institution that is financed and operated by a tribal nation, county, state, municipality or other unit of government. A privately owned nursing facility is not a public institution.
- Prong 2 settings: Located adjacent to a publicly owned institution. For example, the waiver service setting is touching the institution or its property with no intervening parcel of land between the two settings.
Resources

More information about HCBS requirements:
Resources in the CBSM

Settings limitations and requirements can be viewed under service-specific policy pages in the Community-Based Services Manual:
Other resources