OIG Report: Home and Community-Based Services in Assisted Living Facilities – Federal and State Compliance Deficiencies

On December 10, 2012, the US Department of Health and Human Services Office of the Inspector General’s (OIG) Office of Evaluation and Inspections issued a report (OEI-09-08-00360) entitled “Home and Community-Based Services in Assisted Living Facilities”.

The OIG conducted a review of 35 State Medicaid programs  from 2009 that are covered under 1915(c) waivers.  The 1915(c)  waiver allows State Medicaid programs flexibility through CMS’s waiver of certain State plan requirements.   The review identified the types of home and community-based services (HCBS) that are furnished for Medicaid beneficiaries, the number of beneficiaries that receive HCBS while residing in assisted living facilities (ALF), the annual cost of furnishing the HCBS, and whether the documentation of provider standards existed.  Ultimately, the OIG found that the thirty-five State Medicaid programs covered a variety of HCBS for beneficiaries residing in ALFs at a total annual cost of $1.7 billion.  Less than 10% of Medicaid beneficiaries who received HCBS under the 35 States’ 1915(c) waivers resided in ALFs.  The average annual cost to furnish these services to beneficiaries residing in ALFs is almost double the amount than when the services are furnished in other settings.  The OIG noted that the difference in cost may result from beneficiaries’ receiving more HCBS when residing in ALFs.

The OIG also used claims data from seven of the 35 States which had the highest number of beneficiaries receiving HCBS services to determine the extent to which the Medicaid programs complied with Federal and State requirements for HCBS furnished under the waiver.  The OIG determined that ALFs in the seven selected states did not always comply with the federally mandated provider standards, and that the federally required plans of care did not always meet Federal requirements.  However, provider standards existed in each of the 35 States that covered HCBS for Medicaid beneficiaries in ALFs.  The provider standards are part of the quality assurance measures that survey agencies verify during their inspections of ALFs.  In the seven States, citations from survey agency inspections indicate that 77% of the Medicaid beneficiaries resided in ALFs that were cited for one or more deficiencies with regard to State licensure or certification requirements.  Further, records for 9% of Medicaid beneficiaries receiving HCBS in ALFs did not include the plans of care required under State licensure or certification.  In addition, the plans of care for 42% of Medicaid beneficiaries in the seven States did not comply with the Federal documentation requirements, while in five of the seven States, 66% of plans of care that were reviewed did not comply with the additional documentation requirements specified in the States’ approved 1915(c) HCBS waivers.

The OIG concluded its report by recommending that CMS issue guidance to State Medicaid programs to emphasize the need to comply with Federal requirements for covering HCBS under the 1915(c) waiver.  For example, CMS could issue a State Medicaid Directors’ Letter emphasizing that Medicaid programs must meet assurances in their 1915(c) waivers to comply with Federal requirements for providers to furnish HCBS under the waiver.  Ultimately, CMS concurred with the OIG’s recommendation to issue guidance reminding the States of their responsibilities in operating under all waivers, but it did not believe that such guidance would require a State Medicaid Directors’ Letter, as OIG suggested.

You can find a copy of the OIG report here –> HCBS in ALFs Report

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