O-1600, Home and Community Based Services (HCS)

Revision 26-3; Effective Sept. 1, 2026

This Medicaid waiver gives many community services to people with a diagnosis of intellectual disability. These people would otherwise be improperly placed in institutional facilities. People may apply and have their eligibility determined while living in an institution. But, they must be living in the community to begin receiving waiver services.

Waiver Eligibility Component

HHSC must determine if the person meets the criteria specific to HCS for the waiver eligibility component and communicates to HHSC that the person has:

an ICF/IID-RC VIII level of care (LOC);
an approved plan of care; and
a service begin date no later than 30 days from certification.

HHSC determines if the person lives or will live in the community.

HHSC takes appropriate action and provides required notice if the person does not live in the community.

Financial Medicaid Eligibility Component

HHSC must determine if the person meets the criteria specific to HCS for the financial Medicaid eligibility component. HHSC communicates to any necessary parties that the person met all eligibility factors. If the person is already eligible for Medicaid through another program under the Texas State Medicaid Plan, the financial Medicaid eligibility component for this waiver was met.

When determining financial Medicaid eligibility for HCS, give special consideration to the following:

Receipt of a signed and dated application.
Age of the person. If the person is under 65 and does not receive a Social Security Administration (SSA), SSI or Railroad Retirement (RR) disability benefit, a disability determination by HHSC is required. This is required even if the person received an LOC under the waiver eligibility component criteria.
Post-DRA transfer of assets. The person is ineligible until the transfer does not appear during the look-back period.
Post-DRA substantial home equity. A person with a home whose equity interest in the home exceeds the established limit is not eligible for waiver services. The exception is if the person's spouse, child or disabled adult child is also living in the home.
Support and maintenance and deeming. Even if the person receives support and maintenance, do not develop this as income. If the person is living with parents or spouse, do not deem.
Income limit. Use the special income limit when determining eligibility for HCS. Refer to G-6200, Special Income Limit for the Eligibility Budget, and Appendix XXXI, Budget Reference Chart.
Co-payment calculation. Always determine the co-payment for HCS initial applications. Reference the appropriate worksheet from Appendix XXII, Home and Community-Based Services Waiver Program Co-Payment Worksheets, to check the calculations made in the eligibility system.
Spousal impoverishment. If married, consider spousal impoverishment resource policy for waivers. Refer to Chapter J, Spousal Impoverishment.
Spousal co-payment. Refer to the appropriate worksheet from Appendix XXII to determine the spousal diversion or the dependent allowance.

Multiple Program Processing

Certify the person for other benefits which the person may be entitled, such as QMB or SLMB, as soon as eligibility can be determined if:

there is a delay in certifying the waiver services because the waiver eligibility component criteria was not met; or
there is no available waiver slot.

Follow delay of certification procedures for the ME – Waiver EDG if the application is due. This allows the application to remain open for 90 more days.

HHSC notifies MEPD when all pending waiver eligibility component criteria is met by completing and submitting Form H1746-A, MEPD Referral Cover Sheet. Complete the disposition of the Waiver EDG at that time.

Proceed with denial of the ME – Waiver EDG if:

the delay of certification period is expiring; and
the waiver eligibility component criteria was not met or there is still no available slot.

Inform HHSC of the denial using the ME Communication Tool.

Refer to O-1100, Application for Waiver Programs, before processing a program transfer directly to HCS.

Instructions for Processing the Program Transfer

Process a program transfer directly to ME – Waivers after reviewing the case. This is if the person is eligible for a waiver and is already an institutional (ME – Non-State Group Home, ME – State Hospital or ME – Nursing Facility) or CAS (ME – Community Attendant) MEPD Medicaid recipient. Continue the QMB or SLMB coverage if the person continues to meet the QMB/SLMB eligibility criteria.
Ensure retroactive coverage when a noninstutional MEPD Medicaid recipient transfers to ME-Waivers and waiver services were authorized or received before the effective date.
Refer to B-8460, Changes and Program Transfers.

Notices

Follow established notification policy and procedures when the financial Medicaid eligibility component is determined.

Send the appropriate denial notice to the person with a copy to the proper designee if the applicant does not meet the financial eligibility component criteria for HCS Medicaid. Continue to send notices about Medicare Savings Program eligibility to the person with a copy to the proper designee.

Medicaid eligibility redetermination occurs annually. When a recipient fails to return the review form, the recipient may be denied.

Co-Payment

To comply with the federally-approved waiver, a co-payment must be calculated for any person on a waiver whose eligibility is determined under the special income limit. Allow deductions indicated on the appropriate co-payment worksheet in Appendix XXII, Home and Community-Based Services Waiver Program Co-Payment Worksheets. For HCS, the co-payment is usually $0 unless the recipient has a QIT. Notify the HHSC designee of the co-payment amount using the ME Communication Tool, even if the co-payment is $0 at initial application. Notify HHSC only if the co-payment amount changes for redeterminations and reported changes.

Medical Effective Date

Establish a medical effective date (MED) when all the criteria are met for both the:

waiver eligibility component; and
financial eligibility component.

For waiver eligibility, the MED is one of the following:

The first day of the month of entry to a nursing facility, ICF/IID or state supported living center if:
- the applicant filed a Medicaid application during that month; then
- requested a program transfer before being certified; and
- met all eligibility criteria.
The first day of the month if the applicant met all waiver eligibility component and financial Medicaid eligibility component criteria.

Notes:

Consider eligibility for QMB and SLMB, including prior coverage for SLMB.
Consider eligibility for prior coverage if the person was in a nursing facility, ICF/IID or state supported living center before the waiver application.
A person can also be eligible under Category 2 for HCS through Texas Works Medicaid or through the foster care program. Help verify Medicaid eligibility coverage and take no further action on these cases.
A Medicaid recipient is eligible for Texas Health Steps until 21.
Restitution and reconciliation policy does not apply.