How Will the Settings Rule Affect Home and Community-Based Services?

A new Medicaid rule establishing standards for what counts as home and community-based services for people with disabilities will take effect this week, after nine years and numerous delays, but many states are still unprepared. The deadline for states to comply with the so-called “settings rule” was March 17, 2023.

The Centers for Medicare & Medicaid Services’ 2014 regulation mandates that programs fulfill certain criteria in order to be classified as community-based and eligible for funding through Medicaid home and community-based services waivers.

When the regulation was finalized in 2014, Medicaid officials stated that they spent years developing the new standard after hearing reports of community-based homes constructed on the sites of former institutions. Changes are anticipated to impact one million people who receive home and community-based services according to The Center For Medicare & Medicaid Services.

The settings rule is very important for people with disabilities and their families,” said David Goldfarb, director of policy at The Arc. “It helps ensure that individuals are fully integrated in their communities when receiving services through Medicaid. Ultimately, settings that fail to comply with the rule could be shut down since they would no longer qualify for Medicaid funding.”

The COVID-19 pandemic has made it more difficult to deliver home and community-based services, which has contributed to the delays in implementing the new standard, according to The Center For Medicare & Medicaid Services.

“Nearly all states have corrective action plans with CMS, which lay out how they plan to come into compliance with the rule in the future,” said Zoe Gross, director of advocacy at the Autistic Self Advocacy Network.

The rule applies to all settings (i.e., places where seniors and people with disabilities live, work, or spend time) that receive HCBS funding, and it requires that the setting: is integrated in the larger community, supports the individual’s full access to the larger community, including opportunities to seek employment, work in competitive integrated settings, engage in community life, control personal resources, and receive services in the community; and is chosen by the individual.

It also protects an individual’s rights to privacy, dignity, respect, and freedom from coercion and restraint. The requirements are intended to ensure that people with disabilities who live in the community have access to appropriate services

Millions of Americans rely on Medicaid-funded home and community-based services, including me. Medicaid must be expanded, and waiting lists must be eliminated. Without help, people are frequently forced into dangerous situations, which can have devastating, if not fatal, consequences.


“ACLU FAQ on the Home and Community Based Services Settings Rule.” American Civil Liberties Union, American Civil Liberties Union,

Diament, Michelle. “New Medicaid Waiver Rules Take Effect.” Disability Scoop, Disability Scoop, 16 Mar. 2023,

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