Home and Community Based Services (HCBS)

Medicaid home and community-based services provide opportunities for people to receive long-term services and supports in their own home or community, rather than in an institution or isolated setting.

HCBS Settings Regulations

In March 2014, the Centers for Medicare and Medicaid Services (CMS) issued federal regulations that added requirements for settings where Medicaid HCBS are provided. The regulations require that a Medicaid HCBS setting be selected by the person and have other qualities based on the person’s needs indicated in a person-centered service plan.

CMS has given states until March 17, 2023 to bring Medicaid programs into compliance with the regulations.

The purpose of the regulations is to ensure people receive Medicaid HCBS in settings that are integrated in the community. A Medicaid HCBS setting must facilitate a person’s choice regarding services and supports and who provides them.

Medicaid HCBS settings must also be integrated in and support full access to the greater community, including opportunities to:

  • Seek employment and work in competitive, integrated settings;
  • Engage in community life;
  • Control personal resources; and
  • Receive services in the community.

The HCBS settings regulations apply to the following Texas Medicaid programs and services:

  • Community Living Assistance and Support Services (CLASS)
  • Deaf-Blind with Multiple Disabilities (DBMD)
  • Home and Community-based Services (HCS)
  • Texas Home Living (TxHmL)
  • Medically Dependent Children's Program (MDCP)
  • Youth Empowerment Services (YES)
  • Community First Choice (CFC) services
  • HCBS Adult Mental Health (HCBS AMH)

Statewide Transition Plan

CMS requires states to submit a transition plan describing their planned initiatives and activities to achieve compliance with the federal HCBS settings regulations. The transition plan must include:

  • An assessment of settings where Medicaid HCBS are provided
  • Remediation strategies for settings that do not meet the requirements of the regulations
  • A summary of public and stakeholder input on the assessment processes and remediation strategies
  • A summary of public comments received on the transition plan and any revisions made to the plan in response to public comment

Texas submitted its initial transition plan to CMS and has amended it based on responses from CMS. The initial plan and amended versions are available at the following links:

Heightened Scrutiny

CMS requires states to submit evidence of how Medicaid HCBS settings that CMS presumes have institutional or isolating qualities have overcome that presumption. These settings must go through a heightened scrutiny review by CMS.

CMS presumes that the following types of settings have institutional or isolating qualities:

  • Prong 1 settings: Located in a hospital, nursing facility, intermediate care facility for individuals with an intellectual disability or related condition (ICF/IID) or institution for mental disease (IMD).
  • Prong 2 settings: Located adjacent to a public hospital, nursing facility, ICF/IID or IMD.
  • Prong 3 settings: Have the effect of isolating people from the broader community of people who do not receive HCBS.

CMS requires states to identify settings that meet the criteria above and submit to CMS a list of settings that the state believes can overcome the institutional or isolating presumption. The list must include:

  • The prong that each setting falls into for heightened scrutiny
  • A summary of how each setting has or will overcome the institutional or isolating presumption and
  • The state’s plan for remediation to ensure compliance with the regulations by March 17, 2023.

CMS will use the list provided by the state to compile a random sample of settings to go through heightened scrutiny review.

Policy Guidance


Please click here for Provider Communications.

Email questions to Medicaid HCBS.