ACA and New Considerations
Section 2402 of the ACA focused on “Removing Barriers to
HCBS” and applied some important revisions to Section 1915(i).
The Centers for Medicare and Medicaid Services (CMS) subsequently issued a final rule on Jan. 16, 2014, that provided
clarification and additional information related to the revised
One of the most significant modifications to Section 1915(i)
was the addition of Section 1915(i)( 7), which allowed states to
define target populations for the delivery of the HCBS benefit
package. This section waives the comparability requirement es-
tablished in the DRA version of Section 1915(i). The CMS final
rule proposed that the parameters for the target populations
be defined by “diagnosis, disability, Medicaid eligibility groups,
The waiver of the comparability requirement allowed states
to do the following:
■ ■ Define multiple target populations for 1915(i) and tailor multiple HCBS packages that could be individually allocated to
each population; and
■ ■ Vary the amount, duration, and scope of a single 1915(i) service between various target populations.
If states choose to define target populations, CMS will provide approval for an initial five-year period, and the 1915(i)
application will need to be renewed at the end of the period for
subsequent five-year approval periods. States are required to
use needs-based criteria in defining the target population, and
are not permitted to require that an individual be assigned to a
specific Medicaid eligibility group. For example, a state cannot
require enrollment in a 1915(c) waiver in order to be eligible for
the services outlined in the 1915(i) state plan option.
While the ACA allowed the comparability requirement under 1915(i) to be waived, it eliminated the enrollment limit and
waiting list provisions of the original 1915(i). Consequently,
states need to be vigilant in their definitions of needs-based criteria and/or target populations, in order to manage the cost of
the 1915(i) program as a component of state Medicaid budgets.
The ACA also expanded eligibility for the 1915(i) state plan
option to individuals with incomes up to 300 percent of the
Supplemental Security Income Federal Benefit Rate. If states
choose to use this income eligibility definition for a 1915(i) service package, individuals must meet an institutional level of care
as well as the needs-based criteria defined by the state. If states
maintain the income eligibility threshold of 150 percent of FPL
as established by the DRA, individuals do not have to meet an
institutional level of care.
The waiver of the comparability requirement and the expanded income eligibility definition result in the following
options in the design of a 1915(i) service package for a population that meets an institutional level of care:
■ ■ Offer home and community-based services that are not
currently covered under the 1915(c) waiver: In this sce-
nario, the 1915(i) state plan option reduces the administrative
burden required to amend the current waiver and demon-
strate cost neutrality in order to provide additional HCBS.
It is important to note, however, that because 1915(i) eligi-
bility is determined by needs-based criteria and cannot be
restricted to waiver enrollees, any individual who qualifies
for this 1915(i) plan design can utilize these services without
enrolling in an HCBS waiver.
■ ■ Design 1915(i) service packages that mirror one or more
of the current 1915(c) benefit packages: This benefit design
would allow a state to extend the scope of the HCBS to indi-
viduals who are eligible for the 1915(c) waiver but are unable
to enroll because of enrollment limits presented by the waiv-
er. An approved 1915(i) application of this type would allow
states to offer the waiver service package to additional eligible
individuals without having to amend the current waiver to
increase enrollment slots, and would resolve any waiver wait-
list issues. This strategy can also lead to a smooth phase-out
of the current 1915(c) waivers if the state elects not to renew
the 1915(c) waiver at the end of the demonstration period.
A final key component of the ACA as it relates to Section 1915(i)
was the allowance for states to introduce an optional medically
needy eligibility group that could qualify for full Medicaid cov-
erage upon meeting the needs-based criteria for 1915(i) services.
Using the 1915(i) state plan option as a vehicle for comprehensive
Medicaid coverage can assist states in targeting certain groups
that would not otherwise be eligible for Medicaid benefits.
The following example highlights the method one state used
in applying this provision to ensure continued Medicaid coverage to one such specialized group.
Indiana Medicaid: 1915(i) for Behavioral and
Primary Health Care Coordination
On June 1, 2014, the state of Indiana converted from Section
209(b) status to Section 1634 status. (In summary, a state operating under Section 209(b) status establishes state-specific
eligibility criteria for Medicaid disability status rather than
accepting the Supplemental Security Income (SSI) disability
determination. Under Section 1634 status, Medicaid eligibility
determinations for disabled individuals would be based on SSI
The Office of Medicaid Policy and Planning (OMPP) raised
the income eligibility limit to 100 percent of FPL for disabled
individuals. This change enabled many beneficiaries affected by
the transition to maintain full Medicaid coverage. Individuals
with incomes exceeding this threshold would generally be eligible to purchase insurance through the exchange marketplace
and to receive premium subsidies. Unfortunately, a number of
individuals were at risk of losing Medicaid coverage who were
classified with serious mental illness, not meeting institutional
levels of care, and with income levels exceeding 100 percent of
FPL. Prior to the Section 1634 transition, these individuals qualified for a set of mental health services through the Medicaid
Rehabilitation Option. With the conversion to Section 1634 status