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New Ruling Could Make it Harder for Santa Clara Service Providers to Care for Disabled

A new ruling from the California Department of Health Care Services (DHCS) places new regulations on how federal dollars are spent caring for those with developmental and intellectual disabilities. The Home and Community-Based Services (HCBS) Final Rule aims to ensure that people with disabilities have full access to an independent life in the larger community and also ensure the quality of the services they receive. Although the new ruling doesn’t go into effect until March 2022, some service providers who are already stretched thin, worry about the implications of the new ruling.

Many services people receive are paid for with state and federal money from the federal Centers for Medicare and Medicaid Services (CMS) via waivers to certain Medicaid requirements, hence they’re called “waiver” services. Therefore, California must comply with the HCBS Final Rule. This rule sets requirements for HCBS settings, which are places where people live or receive services. It applies to residential and non-residential settings.

California DHCS has been conducting outreach and workshops for service providers to help them understand the new rule and how they can come into compliance. In a letter to stakeholders, DHCS explained the process that begins by developing a Statewide Transition Plan addressing how California will move forward with implementation requirements.


One of the most appealing factors of the new ruling is its attempt at getting funding as close to the individual as possible–what’s called person-centered services.

“The goal of the HCBS final rule is to enhance the quality of services provided by maximizing opportunities and choices for individuals; promoting community integration by making sure individuals have full access to the community; making sure individuals have the opportunity to work and spend time with other people in their community who do not have disabilities; ensuring individual preferences are supported and rights are protected; and establishing person-centered service planning requirements, which includes a process driven and directed by the individual to identify needed services and supports.”

The philosophical progression toward person-centered services started with the Lanterman Developmental Disabilities Act, a California law, passed in 1977 giving individuals with disabilities rights to help them lead more independent lifestyles. Ultimately, this led to the shutdown of institutional care centers and shifted the demand to residential group homes within a community. The thinking was that those with disabilities would benefit from being immersed in their community, rather than being kept separated in an institution.

Santa Clara-based Pacific Autism Center for Education (PACE) is one such organization providing programs and services for individuals with developmental disabilities, including operating six of these residential group homes that have now taken the place of many institutions.

PACE’s Executive Director Kurt Ohlfs said about 40 percent of their funding comes through the HCBS waiver. Because money coming from the federal government is distributed by the state, it goes through a lot of hands before it gets to the individuals it’s meant to benefit, and the HCBS rule is partially meant to address this.

The original idea was to deliver funds on a person-centered model because a developmentally disabled person has the right to choose what services work best for them. Ohlfs said this model works well in theory but for the individuals PACE works with, often the most severely challenged, it isn’t easy for many of them to articulate their needs.

Residential housing is already hard to find and not inexpensive. It’s also hard to find people who want to provide residential services, according to Ohlfs. It’s not an easy line of work and is already rife with local, state and federal regulations. Now under HCBS, clients will have many more choices, such as who their roommates will be. The options are already limited and many programs don’t have the staff available to actually execute the new catalogue of options.

While the new options may work for higher functioning individuals, there is no individualization within the new ruling for people who fall on very different ends of the spectrum and doesn’t solve the issue of getting more resources to the people who need them most. It operates on the premise that any individual will have an al la carte menu of services whereas right now, it’s up to the service provider what they can afford and reasonably manage. “Its like Yelp for disability services,” said Ohlfs.

Ideally, this will improve services across the board, but Ohlfs said it could end up forcing some providers out of the market if clients begin expecting services that providers can’t afford to accommodate.

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