CMS Issues Guidance on MOE, Home and Community-Based Service Waivers - August 9, 2011

The federal Centers for Medicare & Medicaid Services (CMS) on Aug. 5 issued a State Medicaid Directors letter providing guidance on state flexibility to make changes to their home and community-based services (HCBS) programs while complying with the maintenance of effort (MOE) provision of the Affordable Care Act. Consistent with previous guidance on Medicaid 1115 waivers, CMS advised states that they may choose to discontinue a waiver or propose a new waiver that reduces eligibility when a current HCBS waiver expires. In addition, CMS suggested that states may change elements of HCBS waivers that are unrelated to eligibility, such as altering waiver benefits or rates or adding new medical necessity or utilization review criteria. Finally, prior to expiration of the waiver, states may also make certain adjustments that could impact eligibility, as long as overall eligibility levels are left unchanged. For example, CMS described ways in which states may upwardly adjust institutional level of care criteria in order to promote community-based care and to achieve cost savings – a change that would restrict eligibility and otherwise violate the MOE – in ways that are consistent with the MOE provision. CMS did note, however, that such modifications could be in violation of other federal laws, such as the Americans with Disabilities Act, which help protect HCBS beneficiaries from being inappropriately institutionalized.