The CMS Final Rule is Coming

The CMS Final Rule is Coming

The Center for Medicaid and Medicare’s (CMS) Final Rule, or also known as the Settings Rule will fully take effect March 17, 2023.  The rule defines what constitutes a “community" setting for all services funded by the Home and Community-Based Services Waivers (HCBS).

Why is this important to The Arc? 

Most of the funding for the services The Arc provides come through HCBS waiver programs operated by DDA.  Across the US, most community-based services are funded through the CMS HCBS waiver programs and all programs are working toward compliance with the Final Rule. While the Final Rule principles are logical and welcomed, full compliance includes many details and system changes that are impacting how people may be supported.


Eligibility for HCBS Waiver programs was initially based on the need for institutional care for people with disabilities.  Before Waivers, the only federal funding for disability services was in institutions like Intermediate Care Facilities (ICF).  In the 1980s, many advocates and national and local programs like The Arc pushed to have federal funding be directed to community services.  The term waiver means the institutional setting was waived so services could be delivered in the community.  All states dramatically increased the number of people with disabilities they could serve by establishing waivers.  However, there was little requirements for these waivers, and no definition of what was considered a community setting. In some cases, institutional-like settings and services were funded under these waivers. And of course community-based programs like The Arc Baltimore were greatly encouraged to expand services.

Why the change?

In 2014, CMS, pushed by advocates, developed a “final rule” in regulation, that defined community and the types of services that could be funded through HCBS programs.  There are three major areas that are covered by the Final Rule.

  1. Person-Centered Planning – Many of the planning processes for people in waivers were still based on the program and medical model rather than what the person wanted and needed. The new rules make sure the person served is at the center and driving the process.
  2. Residential Settings – These should be integrated in the community and not segregated, and the person should have specific rights and autonomy.
  3. Non-Residential Settings – These services should be in the community as much as possible and all people have to be given the opportunity for competitive employment to be included in the community as much as they want.

What next?

The Arc has already submitted information to DDA regarding any settings that we feel did not meet the Final Rule and plans to address these areas.  We are reviewing what was submitted and progress we have made.  For instance, traditional day centers where people once spent the bulk of their day are no longer acceptable in that kind of format. We have and continue to transform our day services to focus on community engagement outside of the centers. Centers remain in use for limited times and functions, but not at all as they once had.

What can we do? 

Continue to be person-centered when planning with the people we support.  Look for opportunities for them to participate in community activities and be members of the local community.  Educate people on their rights, assist them in being as independent as possible.  Work with DDA on developing new programs and services to assure they meet the Final Rule.

Written by Frank Kirland

Frank Kirkland is The Arc Baltimore’s Vice President of Quality Supports, and he has 40 years of experience in the IDD field.  He most recently served as Executive Director of Linwood Center in Ellicott City, Maryland.  Previously he was Operations Director for RHA Health Services in Georgia.  Most of Frank’s career has been in state government.  He was the Executive Director for the Maryland DDA from 2011 to 2014.  Prior to that he was an Assistant Director for New Jersey Developmental Disabilities Division and was DD Director in WV from 1999 to 2008.

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Baltimore, MD 21212

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