Olmstead Advisory Committee
1915(i) HCBS State Plan Option Issue Brief
1. What is the issue?
Through the efforts of the Diversion and Assessment/Transition Work Groups, the Olmstead Advisory Committee (OAC) developed twelve
recommendations for Secretary Belshé’s consideration, including
establishing home and community-based services (HCBS) as part of the State Medicaid Plan (pursuant to the 2005 federal Deficit Reduction Act).
The Deficit Reduction Act established a new section 1915(i) that allows states to provide HCBS through a State Plan Amendment to individuals who are eligible for medical assistance under the State Medicaid Plan and whose income does not exceed 150% of the federal poverty level
(approximately $15,315 for a single person household).
States may cover all the services listed in 1915(c) under the new 1915(i) option: case management, homemaker, home health aide, personal care, adult day health care, habilitation, respite care, and, for the chronically mentally ill, day treatment, psychosocial rehabilitation, and clinic services.
The 1915(i) option eliminates the need for states to make repeated requests for time-limited waivers. The federal Centers for Medicare and
Medicaid Services (CMS) has indicated that there can only be one 1915(i) SPA per state.
The OAC recommended the inclusion of HCBS within the State Plan rather than a waiver. Department of Health Care Services (DHCS) staff are investigating the benefits and liabilities to this recommendation. Concurrently the federal government is working on draft regulations regarding the 1915(i) option. Significant implementation issues include comparability, services, and targeting. DHCS will continue to work with CMS and others to better understand and analyze these issues, as discussed below, and solicit input from the OAC and others to inform the development of Administration policy.
Iowa is the first state to receive federal approval for a 1915(i) SPA. It will provide HCBS case management and habilitation services at home or in day treatment programs, serving up to 3,700 people in year one and 4,500 people by year five.
2. What is the relationship to Olmstead and what is the goal(s)?
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A 1915(i) SPA could improve access to HCBS for persons at-risk of
institutionalization, thereby helping divert individuals from institutionalization
and allowing them to remain at home and in the community. For instance,
case management similar to that which is provided under the Medi-Cal
Multipurpose Senior Services Program, or MSSP (for people 65 years old
and older) is a service that several OAC members contend should be
extended to the under-65 year old population. These case management
services help people arrange services they need to remain at home and
avoid institutionalization. Current programs offering case management
such as MSSP and Linkages operate with long waiting lists.
3. What are barriers to keep in mind?
While the 1915(i) option offers the possibility of expanded access to HCBS
and lessening of administrative burdens due to use of a SPA (as opposed
to a waiver) barriers related to structuring and implementing the 1915(i)
SPA are very real. CMS has indicated there can only be one 1915(i) SPA
per state, but that states have flexibility in services in a SPA. Federal
regulations for the 1915(i) option are not yet published, but are anticipated
soon. Several questions/issues need resolution from CMS, including, but
not limited to the following. (Below each issue are questions about which
the Department would like input from the OAC.)
? One SPA and Flexibility: It is unclear how California can provide
several different programs, such as mental health, adult day health
care, case management, and supported employment services for
Medi-Cal clients under one 1915(i) SPA. CMS announced that each
state can only secure one 1915(i) SPA. CMS indicates they will
provide states with some flexibility in including multiple services in the
What are the service gaps in existing HCBS waiver and HCBS State
Plan services? How can the 1915(i) SPA help fill those service gaps
effectively, without additional administrative burdens at the state, local
government, and service provider levels?
Minimum Level of Need: Unlike 1915(c) waivers, 1915(i) services
cannot be tied to a beneficiary’s need for institutional level of care.
States are required to establish “needs based” criteria less stringent
than the institutional level of care standard. Staff at DHCS are
exploring how this would impact people in current waivers and who
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receive other services, and whether this would require a restructuring of many components of the Medi-Cal program.
What are the benefits and drawbacks to using the In-Home Supportive Services standards and criteria as California’s threshold for 1915(i)
HCBS? If the IHSS program becomes our 1915(i) threshold, how do we coordinate Homemaker and Personal Care Services between
1915(i) and IHSS? What are the pros and cons of relying on IHSS to be the primary program source for Homemaker and PCS, while
reserving 1915(i) for other HCBS not covered under IHSS?
? Income Limitations: 1915(i) services are limited to individuals who
are eligible for medical assistance under the State Medicaid Plan and whose income does not exceed 150% of the federal poverty level (approximately $15,315 for a single person household). The State will have to carefully examine the income levels of persons currently receiving HCBS under waivers or the State Plan to determine how many of them would be eligible for 1915(i) services. CMS has not yet provided clarity to DHCS on whether the 150% federal poverty level income standard is based on “gross” or “net” income.
California has the option to exclude medically needy persons from eligibility for 1915(i) HCBS. Would exercising this option be an effective way of complying with the 150% FPL limitation? Would it arbitrarily exclude many people under 150%? Would it not capture other eligibles who have incomes exceeding 150%? What are some of the other possibilities that we might want to consider? If California excludes medically needy persons from 1915(i) eligibility, how should California provide HCBS to them to keep them in their homes and communities?
? Unnecessary and Inappropriate Care: Once eligibility is established
for HCBS, the State must identify, based upon the individual needs assessments, necessary HCBS to be furnished to individuals and prevent the provision of unnecessary and inappropriate care. The state is seeking clarification on whether assessment criteria and utilization controls will be required, and if so, the types of criteria and controls that will be needed.
What are the appropriate kinds of utilization control processes to apply to the different types of 1915(i) HCBS? Who should make HCBS utilization control decisions? What are the benefits and drawbacks to continuing our existing policies and procedures for controlling service
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utilization through caps on the cost of HCBS? What are the options
for having utilization control processes interface/mesh with functional
criteria specific to the different types of HCBS?
? Targeting services: Due to Medicaid comparability requirements, the 1915(i) SPA services must be available to everyone eligible for HCBS.
Therefore, states cannot target HCBS services by population
characteristics (e.g., age, medical condition, etc.). However, CMS
indicates states may establish functional criteria specific to an
individual service. It is unclear how the functional criteria will be
applied to address comparability and how much flexibility states have
in how they can focus specific services to populations with the
Do functional criteria currently exist for determining an individual’s
need for the various types of HCBS allowed under 1915(i)? What
functional criteria need to be revised or developed? What processes
should the state use to develop/revise/adopt functional criteria for
? Converting Existing HCBS Recipients to 1915(i) Services: CMS
will not permit states to convert participants receiving HCBS services
under waivers or the State Plan en masse to the HCBS provided
under 1915(i). If a state establishes “caps” on the number of persons eligible to be served through 1915(i) services the slots in the 1915(i)
option must be available to all HCBS eligible persons on a “first-come,
first served” basis. CMS will not let states give preference to existing populations as part of establishing the initial limits on the number of
persons served under 1915(i). Even though states must allow
enrollment in 1915(i) on a “first-come, first served” basis, CMS advised
that careful planning for transitioning existing HCBS recipients to
1915(i) is possible.
What are your thoughts on how the State should structure the intake
process for 1915(i) services to assure equal access to existing and
new eligibles? What are options to manage the enrollment process if
a large number of currently unserved persons appear eligible for
HCBS? Should we create waiting lists for potential enrollees or accept
applications only during open enrollment periods?
Should California convert persons currently receiving IHSS Plus 1115
Waiver services or Adult Day Health Care services to 1915(i) services?
Should we develop a conversion schedule to coincide with the annual
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reassessment of existing participants? Should we set periodic
enrollment caps to help manage the conversion process? What are
practical options for interfacing conversion processes with new
4. What is currently underway related to this area?
DHCS continues to research options and opportunities with the 1915(i)
SPA through discussions with stakeholders and CMS. As the discussions
proceed, the Department will keep CHHSA and the OAC informed about
areas that have been clarified and newly emerging issues.
5. What is the OAC deliverable/how can the OAC’s time best be used
to advance the goals?
The OAC will participate in a comprehensive discussion at the December
14 OAC meeting about the fundamentals of the 1915(i) option, the
questions and issues that remain with the new 1915(i) opportunity, the
tradeoffs that this option may require, and potential options for structuring a
1915(i) SPA in California. The OAC could be updated and engaged on the
1915(i) SPA decision making in California, as appropriate.
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Basic Elements for a 1915(i) State Plan Option Compared to
Duration— There is no set or limited time period for a 1915(i) State Plan Amendment, nor does it need to be renewed or re-reviewed by the Centers
for Medicare and Medicaid Services (CMS). Waivers are approved for a
specific time period (3 or 5 years), and need to be renewed (and re-
reviewed) when this period is over.
Level of Care Requirement— Unlike 1915(c) waivers, there is no “institutional level of care” requirement under 1915(i). States must
establish needs-based criteria, but needs-based criteria for participants
must be less stringent than for institutional-level care. Under the DRA,
states have the authority to modify their needs-based criteria for eligibility
without prior approval from CMS if enrollment exceeds projected capacity.
In this case, the state must notify the public and CMS of the change at least
60 days before it occurs.
Required Services— States have discretion over what are required services, although they can only choose from a limited list of services
authorized by Section 1915(c)(4)(B) of the Social Security Act. Under 1915
(i) states may not cover “other” services authorized under 1915(c)(4)(B).
Under HCBS waivers, states can request approval to provide other
services that participants may need to avoid being placed in a medical
facility (such as non-medical transportation, special communication
services, minor home modifications, and adult day care).
Eligibility Restrictions— Under the DRA, income of HCBS participants can not exceed 150% FPL. Under HCBS waivers, states can waive
income limits and eligibility criteria.
Individual Evaluations, Individualized Needs Assessments, and
Individual Care Plans— Both 1915(i) and 1915(c) waivers require states to conduct an evaluation to determine individual eligibility, conduct
individualized needs assessments, and establish a written individualized
care plan for HCBS recipients. The DRA specifies that the written
individualized care plans must be developed in consultation with the
individual, the individual’s physician, and other health care support
professionals, and if appropriate, the individual’s family. These plans must
be reviewed annually, and as needed based on the individual’s
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Presumptive Eligibility— Under 1915(i) states may elect to provide a period of presumptive eligibility for up to 60 days. Payment must be limited
to medical assistance associated with the independent, individualized
evaluation and assessment. There is no option for presumptive eligibility
under 1915(c) waivers.
Comparability— Under 1915(i), states can limit the number of participants, and can create waiting lists, but cannot waive comparability. This means
that, unlike HCSB waivers, states cannot target 1915(i) HCBS services by
population characteristics (e.g., age, medical condition, disease entity, etc.).
Statewideness— Statewideness can be waived under both 1915(i) and
Cost Neutrality— 1915(i) does not require the provision of HCBS to be
cost neutral. However, the SPA must describe the method used for
calculating the budget and define processes for making adjustments and
for evaluating expenditures. HCBS waivers must be cost-neutral,
compared to the costs of institutional services for which the participant
Self-directed Service Option—1915(i) allows states to provide the option for self-directed services. Self-direction is not required for basic 1915(c)
waivers, but is an option that states may elect. Self-direction is a
requirement for the Independence Plus 1115 waiver.
Limit HCSB to Certain Geographical Areas and/or to a Specific
Number of Persons Served—States have the options to limit HCSB to specific geographic areas and/or limit the number of individuals served
during each year or according to a schedule. However, states are not
allowed to cap the number of persons using specific types of HCBS, but
may cap total enrollment in the program.
There is also the option to exclude medically needy individuals from
receiving HCBS. This could help limit the program’s initial financial
exposure for HCBS.
Payment for HCBS Furnished by Legally Responsible Individuals,
Other Relatives, and Legal Guardians— States have the option for
paying legally responsible individuals, other relatives, and legal guardians
for providing HCBS under certain circumstances. First, these persons have
to be qualified to furnish services. Additionally the state must have
strategies for the ongoing monitoring of the provision of services and
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controls to ensure payment is made only for services rendered. And, in the
case of legally responsible individuals furnishing personal care of similar
services, the state must have “policies to determine and ensure that the
services are extraordinary…(and) in the best interest of the participant….”
Except for the IHSS Plus 1115 waiver, the California Department of Health
Care Services does not pay legally responsible relatives for providing care,
although we do pay for some services provided by other relatives or legal
guardians, if they are qualified.
Basic Requirements for Covering Any Program with Services under
1915(i)— There are several requirements states must meet to cover any
program under 1915(i). The most important are:
1. Selecting the services to be offered to 1915(i) participants and
establishing any “functional criteria” specific to services included in
the benefit package.
2. Developing utilization controls appropriate to specific services.
3. Establishing the eligibility threshold for qualifying for services. This
threshold must be less than the institutional level of care threshold
used by the state in 1915(c) waivers or State Plan services. For
example, California may elect the IHSS assessment criteria as the
threshold for receiving services. This would allow any otherwise
eligible person meeting this threshold to qualify for 1915 (i) HCBS.
Alternatively, California may select a threshold based upon a
person’s need for total assistance with two ADLs. This threshold
would preclude some persons currently receiving IHSS services
from qualifying for 1915(i) HCBS.
4. Establishing caps on the number of participants that can be served
or limiting the geographical areas in which 1915(i) HCBS are
available. Enrollment caps can be set on a scheduled basis, as
provided for in the state’s 1915(i) SPA. Within these caps or
geographical restrictions, 1915(i) HCBS must be available to all
5. Assuring that potentially eligible persons meet the income
limitations imposed by 1915(i). The limit of 150% of the FPL must
be applied to each person receiving 1915(i) HCBS. Many persons
currently receiving HCBS waiver services or HCBS State Plan
services have Shares of Cost they must satisfy on a monthly basis.
Depending on the amount of their SOCs, they may be “income
ineligible” for 1915(i) HCBS.
6. Conducting independent individualized needs assessments, and
establishing written individualized care plans for 1915(i) HCBS
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recipients. The DRA specifies that the written individualized care
plans must be developed in consultation with the individual, the
individual’s physician, and other health care support professionals,
and if appropriate, the individual’s family. Involving the
participant’s physician in the care planning process may be a
requirement that existing programs do not engage in on a routine
7. Accepting participants on a “first-come, first served” basis, up to the enrollment caps established by the state. The state may
establish waiting lists at its option, but must work the waiting lists
on a “first-come, first served” basis as new 1915(i) slots become
8. Reassessing each participant’s need for HCBS on an annual basis.
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