Indiana Medicaid Waiver Changes 2026: A Dated Guide for HCBS Providers

Short answer. Indiana changed its Medicaid waivers more in 2026 than in any year since the 2024 budget shortfall. For a provider, nine of those changes affect what gets paid: the Family Supports amendment that took effect January 1 (BT202612), the Behavioral Support Services clarification in May (BT202674), the $198 million attendant care audit announced April 23, the HEA 1277 records requirement from July 1 (BT202687), the Health and Wellness amendment and the statewide provider enrollment moratorium from August 1 (BT2026124), the live in caregiver rate cut that was proposed and then withdrawn (BT202673), the new claim edit for modifier HQ from October 28 (BT2026155), and the Waiver Reset planned for 2027. This page lists each one with its date, its bulletin, who it hits, and what to do. Last verified October 9, 2026.

This guide is written for the people who run Indiana HCBS provider agencies: executive directors, billing managers, and compliance leads at agencies delivering Family Supports, Community Integration and Habilitation, Health and Wellness, Traumatic Brain Injury, and PathWays waiver services. Families looking for how the changes affect a paid caregiver should start with The Arc of Indiana's fact sheets instead.

The 2026 calendar at a glance

January 1: the Family Supports amendment (BT202612)

CMS approved the Family Supports waiver amendment, and FSSA published the details in BT202612 on January 22, 2026, effective for dates of service on or after January 1. Five pieces matter for billing.

Behavior Management Basic is gone. It was end dated and replaced by Behavioral Support Services, which has three direct components (consultation, functional behavioral assessment, comprehensive) and one indirect component (clinical supervision). Authorizations are quarterly. Providers must use the state templates for the behavioral support plan, the FBA, and the quarterly report. A plan on your own template is a documentation finding waiting to happen.

Participant Assistance and Care notes are now hourly. Paid caregivers must record the activities performed in each hour of the shift, with time in and out, the specific tasks, the participant's signature, and the caregiver's signature. A shift note that summarizes four hours in one paragraph no longer meets the standard. This is the single change most likely to create unbillable hours for an agency that has not retrained its workforce, because the service was delivered and the EVV record is fine, and the note still fails.

Every DSP must be in the registry. For dates of service on or after January 1, 2026, Home and Community Support Professionals must be registered by DDARS in the HCSP Training Registry before providing direct support. The training is capped at 16 hours with periodic recertification. A visit delivered by an unregistered worker verifies in EVV and fails on eligibility.

Self direction arrived. PAC, Respite, and Workplace Assistance can now be self directed on FS, with the member holding employer and budget authority. Legally responsible individuals and legal guardians cannot be paid caregivers under self direction.

The level of care tool changed. The LOCSI is replaced by the interRAI ID tool for adults and the interRAI ChYMH-DD and Early Years tools for children. Case managers complete the annual assessment. If your intake process still references LOCSI scores, update it.

April 23: the attendant care audit

FSSA announced the results of audits at five Attendant Care providers, covering January 1, 2022 through March 31, 2025. From 625 sampled claim lines, the agency extrapolated $198,031,230.18 in improper payments including interest, and said nearly every reviewed claim had multiple findings. The trigger was a rise in attendant care spending of more than $150 million between 2021 and 2022.

The findings are the useful part for every other provider. They were not exotic. Missing or late criminal background checks. Services billed that attendant care is not authorized to perform. Service plans that did not match what was billed. Blank or missing visit notes. Misaligned authorizations. Each one is a record that exists somewhere in the agency and was not checked against the claim before it went out.

FSSA said what comes next: the same statistical sampling method applied to additional high risk providers in both fee for service and managed care, continuous post payment audits, prepayment review for providers with prior findings, and expanded EVV reviews. For a provider, the practical reading is that the audit standard is now published, and the cheapest time to meet it is before the records request arrives.

May 14: Behavioral Support Services limits clarified (BT202674)

After stakeholder questions about the January model, FSSA clarified the utilization limits. Total direct hours across all three BSS components cannot exceed 144 per individual plan year. Only one direct component can be authorized and delivered in a given month. Consultation is capped at 3 hours a month. The FBA is capped at 20 hours over two concurrent months. Comprehensive averages up to 12 hours a month, with heavier months allowed only when the plan year total stays under 144. Unused comprehensive hours inside a quarterly authorization can roll forward when the case manager is told promptly and the plan is updated. Clinical supervision stays at 1 hour a month under an annual authorization.

The 144 hour ceiling is the one to watch. A provider that delivers 14 hours a month for ten months has used 140, and the eleventh month is unbillable past 4 hours regardless of need, unless the plan was amended.

May 28: records on request under HEA 1277 (BT202687)

From July 1, 2026, every 1915(c) HCBS waiver provider (provider type 32) must deliver two documents when a member or legal guardian asks. The first is the member's service delivery accounting records, which can be requested once per calendar quarter. The second is a plain language itemized statement of services billed, which can be requested twice per calendar year. Both must be delivered within 30 calendar days.

The bulletin names no penalty, but it does not need one. The itemized statement, once in a family's hands, is the document that gets compared against what the family remembers receiving, and a mismatch becomes a complaint to the case management organization or the BDS ombudsman. An agency whose billing system can produce both reports on demand treats this as a formality. One whose billing and visit records live in different systems treats it as a scramble.

August 1: the approved amendments and the rate cut that did not happen

CMS approved amendments to the Health and Wellness, Traumatic Brain Injury, PathWays, Community Integration and Habilitation, and Family Supports waivers effective August 1, 2026. Three things in that approval matter for providers.

The live in caregiver rate reduction was withdrawn. BT202673, issued May 14, proposed lower rates for Attendant Care, Participant Assistance and Care, and Residential Habilitation and Support hourly when delivered by a live in caregiver, on the reasoning that travel and mileage to the member's home should not be in the rate. FSSA's approval announcement states that those rate adjustments were removed from the amendment and that BT202673 is rescinded. The state says it will revisit the question in a future amendment cycle. If your billing system or your rate sheet was updated in anticipation, roll it back.

The 40 hour weekly cap for paid relatives and legal guardians on H&W. One relative or legal guardian can be paid for no more than 40 combined hours a week across Attendant Care, Home and Community Assistance, and Skilled Respite. Parents of minors and spouses remain legally responsible individuals, payable only under the extraordinary care rules, with Attendant Care from all LRIs together capped at 40 hours. Non relative caregivers are not under this cap. Hour 41 for a relative is delivered, verified, and unbillable, and because the cap is weekly, a monthly reconciliation catches it three weeks late.

Case management timing. Under the CMO contracts, face to face contact at least every 90 days, one meeting a year in the home, and case notes within seven calendar days. These are the case manager's obligations, but a provider's authorizations depend on the plan being current, so a late plan update becomes the provider's denial.

August 1: the provider enrollment moratorium (BT2026124)

CMS approved a statewide certification and enrollment moratorium on HCBS 1915(c) waiver providers under 42 CFR 455.470, effective August 1, 2026, for an initial six months with possible six month extensions. It covers all five waivers and most direct services, including Attendant Care, Participant Assistance and Care, Residential Habilitation and Support, Respite, Structured Family Caregiving, Day Habilitation, and Transportation.

For an existing agency the effect is on growth. During the moratorium you cannot complete a change of ownership, add counties, or add a covered service. Pending FS and CIH applications expired and must be resubmitted after it ends. H&W, PathWays, and TBI applications already under review were processed. FSSA will consider limited exceptions where member access is at risk, with a narrative sent to OMPPProviderRelations@fssa.in.gov.

Read together with the audit announcement, the moratorium is the state saying it intends to work with the providers it already has and look at them closely. That is good news for a well run agency and the opposite for one that has been growing faster than its records.

October 28: the modifier HQ edit (BT2026155)

For dates of service on or after October 28, 2026, a claim detail for T2033 (Participant Assistance and Care per diem), S5151 (unskilled respite per diem), or T2016 (Residential Habilitation per diem) that carries both modifier HQ and place of service 12 will deny with EOB 4406. Modifier HQ identifies a 24 hour congregate setting where EVV is not required, and the state's position is that a congregate setting and a member's home cannot be the same claim. If your system defaults place of service to 12, check every HQ claim before the edit goes live. This one is cheap to fix in October and expensive to discover in November as a denial report.

2027: the Waiver Reset

DDARS has said it intends a complete redesign of the Family Supports, CIH, Health and Wellness, and TBI waivers in 2027 and is accepting input at DDARSWaiverReset@fssa.in.gov. Nothing is published yet that changes billing. What a provider can do now is make sure its own data is clean enough to show what its services cost and what they achieve, because that is the evidence that shapes a rate conversation.

What this means operationally

Every change on this page has the same shape. The service is delivered, the EVV record is good, and a rule somewhere else makes the claim unbillable or auditable: an unregistered DSP, a note that is not hourly, a relative past 40 hours, a plan that does not match, a BSS authorization past 144 hours, an HQ claim at POS 12. We wrote a separate report on exactly that pattern, with a worked example of what it costs a mid sized provider: where waiver providers lose documented services even when EVV passes.

The fix is the same in each case too: a reconciliation that reads the records you already have (EVV export, service plans, HR credentials, authorizations, billing) and reports the mismatches before the claim goes out. For a small agency that can be a monthly spreadsheet. For an agency with sixty DSPs it is a nightly job.

What this costs

Our prices are published and we do not quote above them. The first step is a free 30 minute scan, where we look at one month of your EVV export and plan data and tell you whether the leak is likely above or below one percent. If it is worth going further, the AI Opportunity Audit is $2,500, credited in full toward any build within 90 days. Everything we do is read only on your records. Nonprofit providers get 30 percent off, always.

Book the scan or read the full price list.

Frequently asked questions

Was the Indiana live in caregiver rate reduction (BT202673) implemented?

No. BT202673 proposed lower rates for live in caregivers effective August 1, 2026. FSSA's waiver approval announcement states the rate adjustments were removed from the approved amendment and the bulletin is rescinded. The state may revisit it in a future amendment.

What documents must Indiana waiver providers give members under HEA 1277?

Two, on request: service delivery accounting records (once per calendar quarter) and a plain language itemized statement of services billed (twice per calendar year). Both must be delivered within 30 calendar days. Effective July 1, 2026, per BT202687, for all provider type 32.

What did the FSSA attendant care audit find?

Five providers, 625 sampled claim lines, January 2022 through March 2025, and $198,031,230 in extrapolated improper payments. Findings included missing background checks, services outside the attendant care scope, plans that did not match billing, and missing visit notes. FSSA said it will extend the same audit method to other high risk providers and expand EVV reviews.

Does the August 2026 moratorium affect providers already enrolled?

Yes, for growth. Existing HCBS agencies cannot complete a change of ownership, add counties, or add a moratorium covered service while it is in force. It began August 1, 2026 for six months and can be extended in six month increments. Limited access exceptions are considered on request.

What changed for Family Supports waiver documentation on January 1, 2026?

Participant Assistance and Care documentation became hourly, with tasks recorded for each hour and both participant and caregiver signatures. DSPs must be registered in the HCSP Training Registry. Behavior Management Basic was replaced by Behavioral Support Services on state templates with quarterly authorization. All per BT202612.

Sources

• Indiana Health Coverage Programs, BT202612, CMS approves waiver amendment for Medicaid HCBS Family Supports waiver, January 22, 2026.
• Indiana FSSA, press release on Attendant Care provider audits, April 23, 2026.
• Indiana Health Coverage Programs, BT202674, FSSA clarifies Behavioral Support Services for FS and CIH waivers, May 14, 2026.
• Indiana Health Coverage Programs, BT202673, FSSA announces proposed live in caregiver rates, May 14, 2026 (rescinded).
• Indiana Health Coverage Programs, BT202687, document delivery requirements for Medicaid HCBS waiver providers under HEA 1277, May 28, 2026.
• Indiana DDARS, 2026 waiver amendment approval announcement, effective August 1, 2026.
• Indiana Health Coverage Programs, BT2026124, HCBS provider certification and enrollment moratorium, July 23, 2026.
• Indiana Health Coverage Programs, BT2026155, billing requirements for specific waiver services, September 24, 2026.
• The Arc of Indiana, Medicaid Waiver Changes Fact Sheet, December 22, 2025.

Last verified October 9, 2026. Bulletins get updated and rescinded, as BT202673 shows. If something here has moved, the free scan uses the current rule.