CMS Issues Guidance, Template, and Technical Guide for 1915(k)

The Centers for Medicare and Medicaid Services (CMS) has published a State Medicaid Director letter (SMD) providing guidance on the 1915(k) Community First Choice (CFC) state plan option. The SMD provides detail on specific FMAP available for CFC, including state activities that will be matched at the administrative rate of 50% and how states must document activities to receive administrative match. It also reviews CFC level of care and financial eligibility requirements, reviews required and optional CFC services and service models, person-centered planning, and applicable home and community-based settings expectations, among other topics. CMS encourages “consideration of CFC as a meaningful option to rebalance long-term care expenditures and increase the availability of home and community-based options.” CMS also encourages states to utilize CFC services in a manner that is integrated with the state’s existing long-term services and supports (LTSS) and HCBS programs. The SMD was accompanied by a Community First Choice State Plan Template and Technical Guide.

According to CMS, CFC “can help reduce the administrative complexity that results from having multiple authorities to provide similar types of services across different populations,” allowing “services to be available across populations for people who meet the institutional level of care, in accordance with need and regardless of the type, nature or severity of disability.” Making services available to individuals across all institutional levels “allows states to streamline access to PAS, by focusing on an individual’s functional needs, rather than type of disability;” therefore, CMS suggests, “CFC offers states the opportunity to provide personal assistance and related services in a coordinated manner that highlights self -direction, person-centered planning, and flexible service delivery.” States contemplating pursuing CFC must carefully analyze potential demand to fully estimate the numbers of individuals who may be eligible for the benefit, which is an entitlement.

CMS clarifies that state expenditures for “activities that are performed for the proper and efficient administration of the Medicaid state plan,” such as “level of care determinations, quality management, data collection, implementation of the Development and Implementation Council required under CFC and administrative costs related to implementation of a fiscal agent structure,” will be matched at the 50 percent administrative claiming rate, rather than the CFC enhanced match. To the extent a state seeks administrative match for the above mentioned activities, and the activities have not been documented within either a state’s Public Assistance Cost Allocation Plan (PACAP) or a Medicaid Administrative Claiming (MAC) Plan, the state will have to amend its PACAP or MAC Plan to document these activities and receive administrative match.

CMS addresses a section of statutory language that has caused some confusion in states. 42 CFR 441.540(b)(6) states that “Natural supports cannot supplant needed paid services unless the natural supports are unpaid supports that are provided voluntarily to the individual in lieu of the attendant.” CMS clarifies that this language is “to set forth the requirement that informal caregivers, family members and friends cannot be required to provide unpaid supports as a condition of an individual receiving CFC services, nor can the beneficiary be required to accept such services.” CMS notes, however, that “the identification of natural supports in the assessment is an important aspect in determining an individual’s needs.”  The agency explicitly states that this language “does not require that caregivers that were previously unpaid should become paid caregivers under the CFC benefit, nor does this require that caregivers need to be paid beyond the paid hours authorized in the plan.”


The Technical Guide includes several noteworthy items. The Guide discusses the meaning of “Activities that allow for the acquisition, maintenance and enhancement of skills necessary for an individual to accomplish ADLs, IADLs and health-related tasks.” CMS points out that “while many states refer to these activities as habilitation services…section 1915(k) does not use the term ‘habilitation.’” Since “the overall purpose of the CFC benefit is to provide for home and community-based attendant services and supports to assist in accomplishing ADLs, IDLs, and health-related tasks,” CMS explains, “the services that are provided under this section must tie directly back to that purpose, and…are not as broad as habilitation services provided under other Medicaid authorities.” However, the Guide does not specify exactly what those limitations are. The Guide also addresses how states should approach CFC settings that may require Heightened Scrutiny. The Guide indicates that the “process for CMS’ review includes sharing the submitted information with federal partners who have 14 days to review the state’s information and provide comments to CMS.”

FMI: The SMD Letter, Template, and Technical Guide can all be accessed at