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December 2013 Policy Study, Number 13-12


Iowans Want to Age in Place


The HCBS Waiver



In 1981, in an attempt to expand coverage for services delivered in the home and community and not solely in an institutional setting, Congress instituted the ability for states to waive certain requirements at the federal level to provide HCBS to patients who were eligible for institutional-level services but preferred to receive services in their home or community.[38] The waiver program is known as the 1915 (c) waivers – interchangeably called HCBS waivers. Under the provisions of the 1915 (c) waiver, states are able to expand coverage for services that were at one time outside of the scope of their Medicaid program. The catch is, this broader service scope needed to prevent an individual from becoming institutionalized. Some of the types of covered services through the waiver include: “case management, homemaker duties, home-health aide, personal care, adult-day healthcare, habilitation, and respite care,” and even a discretionary clause that allows a state to make an additional request to HHS to approve.[39]


Later in the 1980s, coverage was expanded to include services for patients who were considered to have a chronic mental illness. Chronic mental illness could include patients with dementia or Alzheimer’s. For this group, “day treatment or other partial hospitalization services, psychosocial-rehabilitation services, and clinic services (whether or not furnished in a facility)” were now covered as well.[40] Interestingly, neither the statute for the waiver nor CMS really defined the range of covered services. The only other explicit language in the statute was to authorize the Secretary of HHS to allow services that were beyond those already spelled out – provided, of course, these services were cost-effective and were needed to prevent the patient from being admitted to a nursing home or SNF.[41] As a result, over the past 31 years since the waiver came into use, CMS has allowed a broad range of newly covered services.


After 20 years of allowing waiver provisions, CMS finally standardized the actual waiver application form for each state, allowing them to make requests for their own HCBS-waiver program. The new application form also included defining the types of services that most often were covered in other state HCBS-waiver programs. Actually, the list of covered services on the application form is derived directly from the statute with a few additional common services that other states offer their eligible patients.[42] A couple years later, CMS overhauled the application form so that it would require the states to be more descriptive with regard to exactly how their HCBS-waiver program would comply with federal standards, operate day to day, and be evaluated with regard to quality. For convenience, in 2006, this detailed application form was available on-line at the CMS website. The hope is that this online availability would simplify the application process as additional waiver requests are made.[43]


In 2008, CMS reported that a total of 48 states and the District of Columbia had a total of 314 approved HCBS-waiver programs.[44] Arizona and Vermont, the missing states, actually provided HCBS under a section 1115 demonstration waiver.[45] That same year, it was reported that spending for waivered services topped 30 billion dollars and about three-quarters of this spending was for the coverage of LTSS for patients with developmental disabilities.[46] Nearly all of the remaining spending on waivered services in 2008 was for elderly and children with physical disabilities.[47]




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