KDADS HCBS settings team warns providers and guardians about compliance risks under Settings Final Rule

KDADS HCBS Settings Final Rule staff presented an overview of how the federal HCBS settings final rule applies to waiver services and what providers, guardians and case managers should do to support compliance.

Latonya Wright, who identified herself as an HCBS quality oversight specialist, said the settings final rule is triggered by the type of setting where services are delivered and by how services are billed and provided. Wright told attendees that services delivered in provider‑owned, provider‑controlled or provider‑managed settings — including some day services and residential settings — will prompt assessments to determine whether the setting affords full access to the broader community and preserves individual choice and privacy.

Wright summarized federal and state expectations: HCBS recipients should live in home‑like settings, have access to integrated community activities with people who do not receive HCBS, and have “control of daily decisions in their lives within reason.” Wright said restrictions or service modifications are permitted only when individually justified in documented person‑centered plans and must be monitored with a plan to remove them when they are no longer necessary. She warned that unjustified restrictions, or failure to document and monitor them, can place Medicaid funding at risk, including potential suspension or recoupment.

For residential services, Wright said additional protections apply — for example, tenancy protections comparable to Kansas tenant/landlord law, privacy in sleeping units (lockable doors, staff access limited to appropriate circumstances), freedom to control schedules and access to food, and physical accessibility. She said KDADS added the term “managed” at the state level (in addition to “owned” or “controlled”) after finding many Kansas settings are managed by providers rather than owned.

Wright described the KDADS Settings Final Rule team and contact point: she said Caitlin Urban is the team manager, Wright is the HCBS quality oversight specialist who leads training, and Tekosha Majors (as introduced in the webinar) is the HCBS studies coordinator; the team also includes compliance and program integrity specialists. Wright urged providers, guardians and case managers to contact the Settings Final Rule mailbox or the team first with questions so KDADS can screen and route issues appropriately.

During Q&A, attendees asked whether day services, occupational therapy, speech therapy or services for adult autism would trigger the settings final rule. Wright said trigger determinations depend on the service type, the billing code, and the physical and operational characteristics of the setting: services billed as self‑directed but delivered in agency‑directed or provider‑controlled settings can trigger an assessment. Wright gave the example of brain injury day services that were billed in ways that initially appeared exempt but later triggered review when KDADS found agency control.

Wright asked guardians and support staff to monitor whether participants can make choices about daily activities, visitors and access to food and to report concerns (for example, restricted visiting hours or locked refrigerators) to KDADS so the agency can determine whether follow‑up with licensing, program integrity or settings specialists is needed.

No regulatory enforcement action was announced at the town hall; KDADS staff presented guidance, encouraged stakeholder questions and gave contact information for follow up.

Why this matters: the Settings Final Rule influences where and how waiver services can be provided without jeopardizing federal HCBS funding; providers and guardians must document and justify any restrictions on choice or privacy and maintain monitoring and plans to remove restrictions when possible.