CMS Includes Assisted Living Option in Medicaid HCBS Programs

The Centers for Medicare & Medicaid Services (CMS) issued a final rule on Friday strengthening community living options included in Medicaid’s home- and community-based services programs for seniors and those with disabilities.

The rule, stemming from the Affordable Care Act and supporting the Department of Health and Human Services’ Community Living Initiative, ensures HCBS programs provide full access to the benefits of community living, and offer services in the most integrated settings—including assisted living communities.

“Assisted living facilities are not excluded from being considered home and community-based if they are structured and operate in a manner that adheres to the requirements set forth in this rule,” says CMS in the rule.


Under the final rule, Medicaid programs will support HCBS settings serving as alternatives to institutional care, with assisted living or residential care communities included in the HCBS definition. They will also take into account the quality of beneficiaries’ experiences.

“The original draft proposed rule by CMS was a real threat of possible dislocation to the seniors and individuals with disabilities our members serve every day,” said David Kyllo, Executive Director of the National Center for Assisted Living, in a statement, referencing an early draft that had the potential to displace a majority of the 139,000 individuals relying on Medicaid who currently reside in assisted living or residential care facilities.

States are granted a transitional period in the rule to ensure their programs meet the HCBS settings requirements, with technical assistance available.


“People with disabilities and older adults have a right to live, work, and participate in the greater community. HHS, through its Community Living Initiative, has been expanding and improving the community services necessary to make this a reality,” said HHS Secretary Kathleen Sebelius.

The new rule will help ensure all people participating in Medicaid HCBS programs will have full access to the benefits of community living, Sebelius added.

In addition to defining HCBS settings, the final rule implements the Section 1915(i) home and community-based services State Plan option, says CMS, including new flexibility under the ACA giving states additional options for expanding HCBS services and targeting services to specific populations.

Lastly, the rule amends the 1915(c) HCBS waiver program to add new person-centered planning requirements and allows states to combine multiple target populations in one waiver, along with streamlining waiver administration.

“This is a major relief for thousands of seniors and individuals with disabilities residing in member centers across the country,” stated Mark Parkinson, President and CEO of AHCA/NCAL. “We saw the critical nature of this rule and worked with our members and other stakeholders to educate CMS about this potential crisis. Our goal was to ensure residents would be able to remain in place at the assisted living and residential care communities they and their families had initially chosen.”

Access the final rule.

Written by Alyssa Gerace