New PathWays Waiver Termination Reasons and What HCBS Providers Should Do

On June 18, 2026, the Indiana Family and Social Services Administration (Indiana FSSA) issued IHCP Bulletin BT2026103, formally establishing six reasons that a member may be terminated from the Indiana PathWays for Aging waiver program. While many of these circumstances have existed in practice, the bulletin creates greater consistency in member notices and provides clearer guidance regarding waiver disenrollment. For home care agencies, care managers, and waiver service providers, understanding these termination reasons is critical to protecting both client services and agency revenue.

The Six New PathWays Waiver Termination Reasons

According to BT2026103, members may be terminated from the PathWays waiver program for the following reasons:

1. Loss of Medicaid eligibility

2. Admission to a facility for a long-term stay

3. Voluntary withdrawal from the waiver

4. Failure to cooperate in developing or maintaining a waiver service plan

5. Failure to utilize waiver services according to the service plan

6. Failure to meet nursing facility level of care (NF LOC) requirements during reassessment

The bulletin further notes that members who remain inactive or fail to participate in required waiver activities for more than 90 days may face termination. In addition, annual level-of-care reassessments remain a continuing requirement for waiver eligibility.

Why This Matters to Home Care Agencies

Historically, providers often learned about waiver terminations after services had already been delivered or claims had been denied. BT2026103 places increased emphasis on eligibility verification and member engagement.

For agencies serving PathWays participants, each termination reason represents a potential operational risk that requires proactive intervention.

1) Loss of Medicaid Eligibility

Loss of Medicaid eligibility is perhaps the most common and preventable reason for waiver termination.

Agencies should educate clients and family caregivers about:

• Medicaid renewal deadlines

• Requests for financial documentation

• Changes in income or assets

• Required verification forms

A missed redetermination notice can quickly result in Medicaid closure and automatic waiver termination.

Provider Strategy: Implement a monthly eligibility review process. Train schedulers, care coordinators, and intake staff to ask clients whether they have received Medicaid renewal notices and assist them in contacting their local Division of Family Resources office when necessary.

2) Long-Term Nursing Facility Admission

PathWays waiver services are intended to support individuals in the community. When a member permanently enters a nursing facility, waiver eligibility generally ends.

Provider Strategy: Maintain communication with hospitals, rehabilitation facilities, and family caregivers following hospitalizations. Early discharge planning can help avoid unintended long-term institutional placement and preserve waiver eligibility when community return remains appropriate.

3) Voluntary Withdrawal

Some members voluntarily leave the waiver because they misunderstand their benefits, become frustrated with administrative requirements, or mistakenly believe they no longer need services.

Provider Strategy: When a member expresses a desire to discontinue services, providers should ensure the individual fully understands the consequences of waiver disenrollment and document all discussions.

4) Failure to Cooperate With the Service Plan

The bulletin specifically identifies failure to participate in service planning, quarterly face-to-face visits, or annual assessments as grounds for termination after prolonged noncooperation.

This provision creates significant challenges for agencies serving members with cognitive impairment, mental health conditions, unstable housing, or limited family support.

Provider Strategy: Maintain detailed documentation of all outreach efforts, including:

• Phone calls

• Text messages

• Letters

• Home visits

• Communication with family members or legal representatives

Documentation demonstrating repeated good-faith efforts may become critical if a termination is later challenged. It's recommended that both the client and the agency make attempts to Maximus and/or the MCE to get the new level of care assessment completed in time.

5) Failure to Use Waiver Services

BT2026103 states that non-utilization of waiver services for more than 90 days may result in termination.

This can occur when:

• Members repeatedly refuse services

• Staffing shortages prevent service delivery

• Hospitalizations interrupt care

• Family caregivers temporarily assume all care responsibilities

Provider Strategy: Do not assume that an inactive case will remain open indefinitely. Agencies should immediately investigate extended service gaps and work with the care manager to document legitimate reasons for non-utilization. Explain to the client that the waiver has a "use it or lose it" provision and that failure to coordinate services and allow care could result in loss of the waiver.

If hospitalization, rehabilitation placement, or staffing challenges are affecting service delivery, ensure those circumstances are clearly documented.

6) Failure to Meet Level of Care Requirements

Every PathWays participant must continue to meet nursing facility level-of-care criteria.

If reassessment determines the individual no longer meets nursing facility level of care, waiver eligibility may be terminated.

Provider Strategy: Providers should actively participate in reassessment preparation by supplying current clinical information, caregiver burden documentation, functional limitations, and evidence of ongoing support needs.

Incomplete assessments can sometimes fail to capture the true extent of an individual's limitations.

Understanding Appeal Rights

One of the most important aspects of BT2026103 is the reminder that termination notices include appeal rights. Members may challenge waiver termination decisions through Indiana Medicaid's administrative appeals process.

When Should an Appeal Be Considered?

An appeal may be appropriate when:

• Medicaid eligibility was terminated incorrectly

• Required notices were not received

• The member was actively cooperating with service planning

• Services were unavailable due to provider staffing shortages

• A level-of-care assessment contained inaccurate information

• Relevant medical documentation was not considered

How Providers Can Support Appeals

Although providers are not the appellant, agencies often possess critical evidence that can help a member challenge a termination decision.

Helpful documentation may include:

• Visit records

• Service utilization logs

• Care notes

• Communication records

• Hospital discharge summaries

• Physician statements

• Functional assessments

Agencies should maintain organized records and be prepared to provide documentation promptly when requested.

Practical Steps for Navigating the Appeal Process

When a termination notice is received:

1. Review the stated reason for termination immediately.

2. Determine whether the issue can be corrected without an appeal.

3. Contact the member's care manager as soon as possible.

4. Gather supporting documentation.

5. Assist the member or representative in understanding filing deadlines.

6. Continue monitoring Medicaid eligibility and waiver status through the IHCP Provider Healthcare Portal.

In some situations, the underlying issue can be resolved quickly. For example, a missed Medicaid renewal may be corrected through submission of overdue documentation, or a missed assessment can be rescheduled.

Final Thoughts

BT2026103 reflects Indiana's ongoing effort to standardize administration of the PathWays waiver program. While the six termination reasons may appear straightforward, each presents significant risks for vulnerable older adults and the providers who serve them.

Home care agencies that proactively monitor eligibility, document member engagement, address service gaps quickly, and understand the appeals process will be best positioned to protect clients from avoidable waiver terminations.

The most effective approach is prevention. Early identification of problems, strong communication with care managers, and thorough documentation remain the best tools for preserving waiver services and ensuring continuity of care for Indiana's aging population.

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