HOME AND COMMUNITY BASED WAIVER PROGRAMS

Maureen O'Connell & Sidney Watson
March 2001

I. Introduction

        Section 1915 (c) of the Social Security Act enables states to request a waiver of applicable federal Medicaid requirements to provide enhanced community support services to those Medicaid beneficiaries who would otherwise require institutional care. 42 U.S.C. § 1396n(c); 42 C.F.R. § 441.300 et seq. These Home and Community Based Waiver (HCBW) programs can be used to fund services not otherwise authorized by the federal Medicaid statute such as respite care, home modifications, and non-medical transportation. Waivers can also be used to provide optional Medicaid services for waiver participants not offered to other adult Medicaid beneficiaries, such as case-management and personal assistance services. The federal regulations contain a list of the types of services states may choose to provide through HCBW programs. 42 C.F.R. § 440.180.

        HCBW programs allow states to waive three specific Medicaid requirements: state-wideness, comparability of services, and community income and resource rules. Through these waivers, states can elect to cover a limited number of individuals, offer different groups different sets of services, offer the services in only certain geographic locations, or waive deeming requirements to allow more individuals to be Medicaid eligible. Importantly, states' HCBW programs must comply with all federal Medicaid requirements that are not specifically waived.

        HCBW programs provide states the flexibility to design a waiver program offering a mix of waiver services that meet the needs of the group the state wishes to serve. Federal regulations permit HCBW programs to serve the elderly, persons with physical disabilities, developmental disabilities, mental retardation, or mental illness. States may also target programs by specific illness or conditions, such as technology-assisted children or individuals with AIDS. States can also make home and community-based services available to individuals who would otherwise qualify for Medicaid only if they were in an institutional setting. 42 U.S.C. § 1396n.

        HCBW programs are initially approved for three years and may be renewed at five-year intervals. To receive approval to implement a HCBW program, a state must assure HCFA that the average per capita cost of providing HCBW services will not exceed the cost of care for the same population in an institution. 42 U.S.C. § 1396n(c)(2)(D); 42 C.F.R. § 441.302(e). States may satisfy this "cost-neutrality" test on an aggregate basis, in which case the average cost of care for all waiver recipients must be equal to or less than the cost of institutional services, or the state may refuse to offer waiver services to individuals "whose cost of the services would exceed the cost of an equivalent level of care" provided in a nursing home, hospital, or ICF/MR. 42 U.S.C. § 1396n(c)(4)(A); 42 C.F.R. § 441.301(a)(3). The state must also document that there are safeguards in place to protect the health and welfare of beneficiaries. 42 U.S.C. § 1396n(e).

        States may limit the number of Medicaid beneficiaries who may participate in a HCBW program. 42 U.S.C. § 1396n(c)(9) and (10). Specifically, 42 C.F.R. § 441.303(6) provides:

        The State must indicate the number of unduplicated beneficiaries to which it intends to provide waiver services in each year of its program. This number will constitute a limit on the size of the waiver program unless the State requests and the Secretary approves a greater number of waiver participants in a waiver amendment. .

        Currently 240 HCBW programs operate across the country. Between 1990 and 1998, the number of persons with developmental disabilities who received services through a HCBW program increased by more than 200,000 people.

II. Litigation Challenging HCBW Denials, Terminations, and Waiting Lists

A. Level of Care Requirement

Martinez v. Ibarra, 759 F. Supp. 664 (D.Colo 1991). State may not use criteria for HCBW program that are stricter than those that actually would be used to determine whether individuals require the specific institutional level of care.

Weaver v. Colorado Dept. of Soc. Servs., 791 P.2d 1230 (Colo.Ct. App. 1990. Constitutional due process protection against arbitrary administration of the program prevent terminations from home care unless there is a change in medical condition or in the underlying regulations or statute.

B. Limitations on eligibility

Parry v. Crawford, 990 F. Supp. 1250 (D. Nev, 1998). State may deny waiver services to person with autism when waiver is limited to persons with mental retardation. Plaintiff dropped his challenge to this waiver restriction when Nevada amended its waiver to include this restriction. The court held that ICF-MR institutional services may not be so limited because the federal definition of ICF-MR services specifically includes individuals with related conditions as well as individuals with mental retardation.

Skandalis v. Rowe, 14 F.3d 173 (2d Cir. 1994), rev'd 811 F.Supp. 782 (D.Conn. 1993). State may limit eligibility to certain subsets of categorical and financial eligibles. The court upheld Connecticut's HCB waiver that limited eligibility to those with incomes below 300% of the SSI level holding that the state could maintain more stringent financial eligibility requirements for the waiver program than it did for its general Medicaid program.

Beckwith v. Kizer, 912 F.2d 1139 (9^th Cir. 1989). California limited waiver eligibility to individuals who required 90 days or more of acute-level hospital care and who were hospitalized immediately prior to receiving waiver services. The court concluded that 42 U.S.C. 1396n(c) did not prohibit California from defining a waiver group in terms of hospitalization. The court also held that the hospitalization requirement did not violate equal protection because it met a rational basis test.

C. Cost-effectiveness

Beckwith v. Kizer, 912 F.2d 1139 (9^th Cir. 1989). California's waiver was designed to benefit a class of individuals with physical disabilities who required 90 or more days of hospitalization. In deciding cost effectiveness, California could compare the costs of the waiver to the costs of patients who required stays of 90 days or more. It was not required to use the average annual inpatient costs for all hospital inpatients. Congress amended 42 U.S.C. § 1396n(c)(7)(A) to allow this kind of cost estimate and made the provision retroactive.

Leach v. Comm'r, 1995 WL 495907 (Va. App., Aug. 22, 1995). An applicant denied HCBW services because her costs exceeded the individual cost cap challenged its use. A conflict existed in Virginia's waiver request making it unclear whether the state intended to apply an individual cost cap or merely an aggregate cost cap. Virginia checked the box on the waiver application indicating it intended to use only an aggregate cap. However, attached to the waiver form and incorporated into the waiver request was the state manual which provided for an individual cap. The court found that the state's intent in the waiver was to apply an individual cost cap.

Ash v. Ohio Dep't of Human Serv., 126 Ohio App.3d 211, 709 N.E.2d 1257 (Ohio App. 4 Dist. 1998). Ohio's HCBW program had a cost cap of $9,000. Individuals, like plaintiff, whose monthly costs of care were higher were eligible to participate in the waiver, but had to pay any additional costs of care themselves or through other sources. Plaintiff challenged the cap. The court found that without a showing that the cost cap fails to meet the medical needs of most persons eligible for the waiver, the cap was not arbitrary or capricious.

Madsen v. Dep't of Health & Welfare, 114 Idaho 182, 755 P.2d 479 (Idaho App. 1988). Idaho's HCBW program required certain participants to contribute toward the cost of their care. Apparently, the cost sharing requirements complied with federal law. The plaintiff proceeded pro se which resulted in a confusing, yet moving record about the stinginess of the HCBW personal needs allowance.

D. Waiting Lists and Medicaid's Reasonable Promptness Requirement

Makin v. Hawaii, No. 98-0097 DAE (D. Haw., Nov. 26, 1999). Hawaii Medicaid did not violate the reasonable promptness requirement of the Medicaid Act by maintaining extensive waiting lists for HCBW programs when all waiver slots were filled. There is no entitlement to waiver services once the population cap is reached. NOTE: The court held that the Medicaid statute is ambiguous about states' authority to set limits on HCB Waiver slots. However, the court found that the regulations are clear and are a reasonable interpretation of the statute.

Boulet v. Celucci, 107 F. Supp. 2d 61 (D.Mass.2000). Massachusetts Medicaid violated beneficiaries' right to receive HCBW services in a reasonably prompt manner by placing them on extensive waiting lists for residential services when waiver slots were available. The court found that although the population cap for the waiver program was a permissible constraint on eligibility pursuant to 42 USC § 1396n(c)(10), eligible individuals who fall under the population cap are entitled to these waiver services in compliance with the full protection of the Medicaid Act, including the requirement that services be provided with reasonable promptness. 42 USC § 1396a(a)(8).

Benjamin H. v. Ohl, Civ. Action No. 3:99-0388 (S.D.W.Va., Order entered March 15, 2000). The court ordered the state to assure that the HCBW waiting list moved "at a reasonable pace," defined as services to begin within 90 days of the date that eligibility is determined. However, the fact situation in West Virginia is unusual. Several years ago the state legislature declared a moratorium on new ICF-MR/DD beds in favor of the expansion of community services. At first, the state expanded community based offerings, in part through a HCB waiver. However, in April, 1999, the state Medicaid agency abruptly changed this policy limiting its waiver program to emergency placements only and requesting only 25 additional HCBW slots over the next five years. The result was an expansion of already-existing waiting lists for HCBW placements. Plaintiffs alleged that these waiting lists meant that ICF-level services were simply not operating in the state.

E. Free Choice

        When a state offers waiver services, it must inform individuals likely to require nursing home or ICF/MR care about "any feasible alternatives available under the waiver" and be given the "choice of either institutional or home and community-based services. 42 U.S.C. § 1396n(c)(2); 42 C.F.R § 441.302 (d).

Makin v. Hawaii, 114 F. Supp. 2d 1917 (D. Haw 1999). Hawaii Medicaid did not violate the free choice requirement because once the population cap was reached and the waiver was full the program there was no longer an available alternative.

Cramer v. Chiles, 33 F. Supp. 2d 1342, 1352 (S.D.Fla. 1999). State plan requiring choice between a HCBW program which gave no assurance that the supports and services would meet individuals' needs and a possible decades-long waiting list for ICF/MR institutional care gave beneficiaries no real choice of services in violation of the Medicaid Act.

F. Due Process Issues

        The U.S. Constitution and the federal Medicaid Act require states to provide an opportunity for a fair hearing "to any individual whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness. 42 U.S.C. § 1396a(a)(8); 42 C.F.R. § 435.930. See, Goldberg v. Kelly, 397 U.S. 245 (1970).

Martinez v. Ibarra, 759 F. Supp. 664 (D. Colo. 1991). HCBW program's failure to establish clear, written procedures regarding determinations of need violated recipients' due process rights. This holding may apply to situations in which the state makes up rules for their waiver programs that are not specified in the waiver document.

McMillan v. McCrimon, 807 F. Supp. 475, (C.D.Ill. 1992). Plaintiffs challenged the state's refusal to accept applications for the state's optional HCBW program. The court held that state had to afford each individual an opportunity to apply for Medicaid HCBW services without delay.

Parry v. Crawford, 990 F. Supp. 1250 (D. Nev, 1998). Applicant for Medicaid waiver services is entitled to notice and an opportunity to request a fair hearing when an application is denied. Notice is required even when the applicant repeatedly requests the same benefits.

King v. Fallon, 801 F. Supp. 925 (D.R.I. 1992). State agency must provide adequate notice and hearing rights following level of need assessments for home and community-based services. Notices must be in writing and must be specific enough to provide a basis for a challenge.

Weaver v. Colo. Dept. of Social Services, 791 P.2d 1230 (Colo. Ct. App. 1990). Notice of termination of HCBW services must include the specific regulations that support the state's action. The state sent the recipient a written notice of termination. Although the notice did cite some regulations, it did not include a cite to the HCB Waiver regulations.

Cramer v. Chiles, 33 F. Supp. 2d 1342, 1352 (S.D.Fla. 1999). State statutory change converting ICF/MR facilities to HCB Wavier program amounted to a reduction in services requiring notice and an opportunity to be heard.

G. HCBW Programs & Section 1983

Lewis v. New Mexico Dept. of Health, 94 F. Supp. 2d 1217 (2000); Boulet v. Celucci, 107 F. Supp. 2d 61 (D.Mass.2000). Plaintiffs can maintain a Section 1983 claim challenging the state's failure to provide waiver services with reasonable promptness.

Wood v. Tompkins, 33 F.3d 600 (6^th Cir. 1994) - Applicant challenged a denial of HCBW services because he needed more hours of skilled nursing services than the program provided challenged. The court held that most sections of 42 U.S.C. § 1396n(c) are actionable under 42 U.S.C. § 1983. However, the court found that the cost effectiveness test of 42 U.S.C. § 1396n(c)(2)(D) and 42 C.F.R. § 441.302(e) do not give rise to a private right of action under 42 U.S.C. § 1983 because they are designed to benefit the government, not the Medicaid beneficiary. The case was not a direct challenge to the cost limit placed on HCB services, but challenged the hour limit placed on skilled nursing services.

III. Advocacy Tools

A. Obtain a copy of the HCBW application, all accompanying documentation, subsequent amendments, and all relevant correspondence between the state and HCFA regarding the waiver program.

B. Obtain information regarding the assessment tools used to determine level of need, including the survey instrument and any state regulations or policies.

C. Obtain information regarding the state's cost effectiveness test, including state regulations and policies. Be sure to compare the state's policies with their waiver request.

2003 National AT Conference Handouts  

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