Initial Approval for 41 States' HCBS State Transition Plans

Regulation | March 20, 2018 | by Peter Notarstefano

To date 41 states have received initial approval and 7 states received final approval of their state transition plan.

Approval is granted because these states completed their systemic assessment, included the outcomes of this assessment in the STP, clearly outlined remediation strategies to rectify issues that the systemic assessment uncovered, such as legislative changes and changes to contracts, and is actively working on those remediation strategies. 

CMS’s January 2014 rule defines the qualities of residential and non-residential settings in which Medicaid-funded HCBS can be provided. To be considered community-based, settings must support an individual’s full access to the greater community; be selected by the individual from options including non-disability specific settings; ensure individual privacy, dignity, respect and freedom from coercion or restraint; optimize individual autonomy in making life choices; and facilitate individual choice regarding services and providers. Additional criteria apply to provider-owned or controlled settings. In May, 2017, CMS extended the state compliance deadline by three years, to March, 2022, but retained the March, 2019 deadline for states to submit transition plans. As of January 3, 2018, seven states (Arkansas, Delaware, DC, Kentucky, Oklahoma, Tennessee, and Washington) had received final CMS approval on their transition plans.


Forty-two states reported that they anticipated having to change state rules or policies to come into compliance with the settings rule in 2016, up from 21 states in 2015. These states include: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Iowa, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Mississippi, Montana, North Carolina, North Dakota, Nebraska, New Hampshire, New Jersey, New Mexico, Nevada, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming. Specifically, 35 states have identified some settings that will have to be modified in some way to continue to be used for Medicaid-funded HCBS under the settings rule (up from 13 states in 2015). Additionally, 16 states identified settings that cannot be modified to meet the settings rule and consequently will require beneficiaries to be relocated to continue receiving Medicaid-funded HCBS (up from 2 states in 2015).


Twenty-eight states plan to submit information to the HHS Secretary to overcome the rule’s presumption that a specific setting is institutional so that Medicaid-funded HCBS can continue to be provided there (up from 11 states in 2015). The settings rule presumes that certain settings are not community-based because they have institutional qualities, such as those in a facility that provides inpatient treatment, those on the grounds of or adjacent to a public institution, and those that have the effect of isolating individuals from the broader community. The Secretary can overcome the institutional presumption for these settings by applying heightened scrutiny based on information submitted by the state. Twenty-two states have identified settings that are presumed institutional because they effectively isolate beneficiaries (up from 10 states in 2015).


CMS has been working with a group of state leaders with respect to developing a process for operationalizing the HS submissions. Because of this, those that have been in queue for some time have been placed on temporary hold. Once the work of this working group has been completed, the result will be a streamlined process, and at that point submissions are put on a timeline as soon as they are submitted (and anything in queue will be processed immediately). They have not worked out the details of this timeline yet, but I would anticipate something like a 90-day maximum timeline for turning around packages once they have been submitted to CMS (this is consistent with the timeframe for processing initial responses for waiver applications). Hopefully, there will be greater clarification to the field in the very near future.

CMS granted the following states initial approval of their Statewide Transition Plan (STP) to be in compliance with the federal home and community-based services (HCBS) regulations:

  1. Tennessee (both initial and final approval) April 13, 2016

  2. Kentucky June 2, 2016, Final approval on  June 13, 2017

  3. Ohio June 2, 2016

  4. Delaware July 14, 2016, Final approval on October 13, 2017

  5. Iowa August 9, 2016

  6. Pennsylvania August 30, 2016

  7. Idaho September 23, 2016

  8. Connecticut, October 21, 2016

  9. West Virginia October 26, 2016

  10. North Dakota November 1, 2016

  11. Oregon November 2, 2016

  12. South Carolina November 3, 2016

  13. Washington State November 3, 2016 Final approval October 24, 2017

  14. Arkansas November 7, 2016, Final approval on June 2, 2017 

  15. Indiana November 8, 2016 

  16. Virginia December 6, 2016

  17. Montana December 23, 2016 

  18. Alaska December 28, 2016 

  19. Oklahoma December 28, 2016, Final approval on August 10, 2017

  20. Rhode Island January 5, 2017

  21. Hawaii January 13, 2017

  22. New Mexico January 13, 2017

  23. Alabama February 21, 2017 

  24. Louisiana March 3, 2017

  25. Missouri  March 29, 2017 

  26. Nebraska  March 31, 2017 

  27. Utah  April 5, 2017

  28. Wyoming May 10, 2017

  29. Mississippi  May 25, 2017 

  30. Minnesota  June 2, 2017 

  31. South Dakota June 2, 2017

  32. New Hampshire July 3, 2017

  33. Wisconsin  July 13th, 2017 

  34. Maryland August 2, 2017 

  35. Michigan August 10, 2017

  36. Arizona September 6, 2017

  37. North Carolina September 6, 2017

  38. District of Columbia October 6, 2017, Initial and Final approval

  39. Georgia October 25, 2017 

  40. Vermont December 5, 2017

  41. California February 23, 2018

The States Approval is granted because these states completed their systemic assessment, included the outcomes of this assessment in the STP, clearly outlined remediation strategies to rectify issues that the systemic assessment uncovered, such as legislative changes and changes to contracts, and is actively working on those remediation strategies. In their state transition plans, CMS is seeing states develop a tiered set of standards to comply with the HCBS regulations. CMS requires the states to abide by the minimal standards within the rule; however, states have the right to have more stringent standards that they believe will improve HCBS in the state. The more stringent standards may include requirements for more integration in the community for Medicaid beneficiaries. 

CMS has already stated that "reverse integration" or bringing the community into the Assisted Living, Adult Day Center is not enough. There has to be a process in place that the beneficiary has the ability to travel into the community for the services/events that they choose. CMS has introduced another challenge by saying that a Medicaid beneficiary's choice of an HCBS provider is not enough to have compliance with the HCBS rule. CMS has placed more emphasis on community integration than on consumer choice. The difficulty with the integration criteria in the rule, is that it is the most subjective criteria. 

It is important for LeadingAge members and State affiliates to work closely with their states in determining how to create a practical implementation of the HCBS rule, in order to avoid any unintentional negative consequences, such as a reduced choices of HCBS providers.