In a long-awaited move, federal officials are clarifying what counts as home and community-based services for people with disabilities.

Under a final rule expected to be published in the Federal Register next week, housing for those with disabilities will not only be judged by its location or physical characteristics but will also have to meet specific “outcome-oriented” criteria in order to qualify under Medicaid home and community-based services waivers.

“Home and community-based settings do not include a nursing facility, institution for mental diseases or an intermediate care facility for individuals with intellectual disabilities,” the rule states. What’s more, homes “must exhibit specific qualities to be eligible sites for delivery of home and community-based services” under the new federal requirements.

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Specifically, the settings must be integrated in and provide full access to the community and be places where individuals choose to live, Medicaid officials said. Additionally, homes must offer personal rights to privacy and dignity and allow individuals to independently make choices about daily activities, their physical environment and who they interact with.

The new rule also states that individuals with disabilities receiving Medicaid home and community-based services do so through a person-centered planning process.

“People with disabilities and older adults have a right to live, work and participate in the greater community,” said Secretary of Health and Human Services Kathleen Sebelius. “Today’s announcement will help ensure that all people participating in Medicaid home and community-based services programs have full access to the benefits of community living.”

States offering existing Medicaid waivers for home and community-based services must establish transition plans to meet the new requirements as soon as possible under the rule.

Medicaid officials previously said that they were prompted to issue the new rules — which have been in the works for years — after hearing reports of homes built on the sites of former institutions that were being labeled as community-based.

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