News & Perspectives

Home and Community-Based Settings Regulation – Heightened Scrutiny


The much-awaited guidance from the Centers for Medicare and Medicaid Services (CMS) on Heightened Scrutiny was issued on March 22, 2019 (SMD#19-001). In the form of FAQs, the guidance “is designed to ensure that implementation decisions balance the need for robust stakeholder engagement with administrative feasibility.”

In addition to addressing the process of Heightened Security, the CMS guidance provides clarification on assessing individual’s private residences to determine compliance with the Settings rule, and whether an individual must live in a compliant setting when receiving Medicaid funded non-residential Home- and Community-Based Services (HCBS).

Perhaps the most significant aspect of the guidance was the inclusion of a July 1, 2020 end date for states to submit settings identified for Heightened Scrutiny to CMS, if those settings have successfully remediated the identified issues. Settings that are still implementing remediation on July 1, 2020 must submit to CMS with the assurance that they will achieve full compliance with the settings criteria by March 17, 2022.

The first eleven FAQs are directed at clarifying the Heightened Scrutiny requirements, and cover topics such as the characteristics of different settings, HIPAA and PHI implications, information that states must provide, and how CMS will ensure compliance with the regulation. Question 12 addresses CMS’s expectations for the review of private residences and reiterates that privately owned or rented homes and apartments where a person receiving HCBS-funded services lives with family members, friends, or roommates are presumed to be in compliance with the Settings Rule. Question 13 addresses whether a person receiving HCBS-funded non-residential services must reside in a residential setting that is in compliance with the Settings Rule. According to CMS, the state is not responsible for ensuring compliance with the Settings Rule in the residential setting. However, the guidance also clarifies that the state may decide to require the setting to meet the criteria even if the person is not receiving HCBS-funded services in that setting.

The clarifications within this guidance will be helpful to states as they endeavor to implement their Statewide Transition Plans by completing setting assessments, identifying and remediating Heightened Scrutiny settings, and submitting Heightened Scrutiny packages to CMS.

To learn more, check out the summary developed by Public Consulting Group’s subject matter expert Cathy Anderson here: If your state has questions, please feel free to contact Cathy at