DENVER — Colorado’s developmental disabilities and long-term care systems are undergoing a sweeping series of transitions as the Colorado Department of Health Care Policy and Financing (HCPF) rolls out new budget adjustments, service limits, and administrative guidelines. The updates, which take effect across 2026, are designed to reshape how community-based services, caregiver hours, and residential programs are managed and funded throughout the state.
For individuals, families, Program Approved Service Agencies (PASAs), and case managers navigating these changes, understanding the evolving policy landscape requires close attention to program rules, upcoming caps, and available state resources. To assist stakeholders, state and community organizations have updated their foundational English and Spanish acronym guides and reference materials to help parse complex Medicaid terminology.
Case Management, Advocacy, and Getting Help
As the regulatory framework shifts, case managers are positioned as the primary resource for individuals and families trying to understand how the sweeping adjustments affect their personal circumstances. State officials emphasize that case managers can provide tailored explanations of how system-wide modifications will directly impact individual or family care plans.
Questions frequently arise regarding the timing for placing children on the Developmental Disabilities (DD) Waiver waitlist. While there is no single recommended age given the diverse needs of each child, the earliest a child can be placed on the DD waiver waitlist is age 14. Families are strongly encouraged to collaborate with their case managers to determine the optimal timing based on long-term support objectives.
Meanwhile, other waivers are experiencing structural adjustments. While the Supported Living Services (SLS) Waiver has no specific sweeping overhauls, underlying services such as Personal Care, Homemaker, and Health Maintenance Activities (HMA) have transitioned over to Community First Choice (CFC) and are now subject to CFC soft-cap limitations. Similarly, modifications to the Children’s Extensive Support (CES) Waiver primarily center on Community Connector services, involving adjusted unit limits and revised age-appropriateness criteria. Despite these adjustments, children’s waivers and foundational support services remain fully available.
State budget pressures are also impacting specialized therapies. Effective April 16, 2026, occupational therapy is facing a rate reduction alongside broader Medicaid services. Pediatric Behavioral Therapy (PBT) is similarly affected by budget shifts and remains vulnerable to any future across-the-board rate cuts. Furthermore, equine-related services are being systematically removed from Home and Community Based Services (HCBS), though hippotherapy currently remains a covered benefit under the Medicaid State Plan, also known as Health First Colorado.
Community First Choice (CFC) Services and Soft Caps
The integration of Community First Choice (CFC) services marks a significant operational change for waiver participants. CFC encompasses essential everyday support services, including Personal Care, Homemaker, and Health Maintenance Activities, which operate outside of individual waivers while remaining universally available across them.
A defining feature of the CFC rollout is the implementation of annual and weekly "soft caps." Defined as a structured annual limit on services, a soft cap does not outright deny care that exceeds the threshold. If additional service hours are determined to be medically necessary, case managers possess the procedural mechanism to request an exception by following established state guidelines.
Caregiver Hours and Family Caregiving Regulations
Among the most closely watched adjustments are new limitations governing paid family caregiving and weekly caregiver hours. The state is implementing a phased cap on paid weekly hours per caregiver, marking a distinct departure from historical allowances. Under the new schedule, the cap will decrease over time: starting July 1, 2026, the limit is set at up to 84 hours per week per member; on January 1, 2027, the cap drops to 70 hours per week per member; and by July 1, 2027, the maximum will settle at 56 hours per week per member.
At present, formal operational guidance detailing the exception protocol for these hour caps has not been fully finalized by the state. Families are advised to rely on updates from their case managers as administrative instructions emerge.
Family caregiving limits also extend to specific roles like homemaker services. Legally Responsible Persons (LRPs)—such as parents of a minor or a spouse—are authorized to provide up to 5 hours per week of homemaker services per member. If a member has two LRPs providing services, each may provide 5 hours weekly, totaling 10 hours per week per member. Other family members who do not qualify as LRPs may continue providing homemaker services through established delivery options like Consumer Directed Attendant Support Services (CDASS). Adult siblings may also serve as paid homemaker providers, provided they meet all underlying program requirements.
A strict restriction applies regarding administrative roles and paid caregiving. Under both In-Home Support Services (IHSS) and Consumer-Directed Attendant Support Services (CDASS), if a member utilizes an Authorized Representative (AR), that individual is strictly prohibited from simultaneously acting as a paid attendant or family caregiver. Families receiving conflicting directives are urged to confirm program-specific rules directly with their case management agency.
When care hour reductions or single-caregiver hour caps create challenges, case managers are tasked with assisting families through alternative staffing arrangements. This includes reviewing viable options to meet service needs within regulatory limits, providing lists of eligible provider agencies, or completing a Request for Proposal (RFP). An RFP includes an individual profile outlining necessary services, which can then be shared with eligible provider agencies to gauge availability. Families can also browse and connect with local providers directly by utilizing platforms like Wayfinder.
Crucially, case managers are required to authorize service hours based strictly on the current guidelines and rules in effect as of April 1, 2026, rather than honoring past approval totals that predated the policy shifts.
Income, Benefits, and Cost Participation
Financial calculations involving benefits such as Social Security Disability Insurance (SSDI) and earned income remain a critical factor in monthly calculations, as both are counted as formal monthly income. Questions surrounding whether Difficulty of Care payments count as wages for SSDI purposes depend heavily on individual circumstances. Caregivers and members are encouraged to review state guidance and consult their fiscal management service or provider agency, referencing HCPF Informational Memo 26-001 regarding Difficulty of Care and Community First Choice.
Residential settings face further financial tracking through the Participant Engagement and Trust Income (PETI) framework. PETI payments are directed straight to the provider agency rather than the Case Management Agency. Because PETI requirements vary significantly depending on the specific waiver and living arrangement, questions concerning implementation are routed through HCPF.
To assist with these calculations, HCPF is developing a DD waiver PETI assessment tool designed for case managers to determine what portion of an individual’s monthly income must be allocated toward residential services. In situations where a Program Approved Service Agency (PASA) is unable to collect PETI payments, the decision regarding the potential continuation of services rests entirely with the provider agency, which must still adhere to mandatory guidelines governing the proper advance notice of service termination.
Exemptions to PETI do exist. Individuals actively enrolled in the Medicaid Buy-In Program are exempt from PETI requirements. While questions persist regarding whether individuals qualifying for the zero-premium category maintain full enrollment status, HCPF provides ongoing guidance materials for clarification. The final DD waiver PETI assessment tool, once completed, will be published directly on the HCPF provider rates and fee schedule webpage.
Community Connector Services and Residential Funding
Community Connector services are undergoing similar regulatory scrutiny. Approved activities must strictly adhere to inclusion and setting criteria, remaining age-appropriate for the participant. While life skills training like grocery shopping can qualify, case managers must verify that specific activities meet all criteria. Reductions in Community Connector hours implemented by HCPF are intended to preserve service availability across the broader community, though formal exception processes remain accessible for individuals whose engagement needs surpass standard limits.
In the realm of residential care, host home funding has thus far avoided direct reductions under the current sustainability changes. A previously proposed budget item that would have impacted certain Individual Residential Services and Supports (IRSS) settings has been temporarily paused. Nevertheless, Host Home Providers (HHPs) remain susceptible to any overarching across-the-board rate reductions enacted by the state legislature.
Travel, Benefit Renewals, and Unmet Needs
Logistical questions regarding travel and benefit continuity continue to be addressed by case managers. While family caregivers and members are permitted to travel out of state under certain conditions, participants must secure prior confirmation from both their case manager and service provider to ensure that mandatory waiver requirements and in-person service rules continue to be satisfied.
For ongoing benefits, members must complete an annual Level of Care Certification. Individuals who receive official notices from Medicaid are advised to promptly contact the office designated on the letter before following up with their case manager to maintain uninterrupted Long-Term Services and Supports (LTSS).
Regarding unmet needs, there is no strict limit on the number of individual requests a participant can submit each year, though funding thresholds do apply based on the specific service and program. Case managers play an essential role in submitting these requests and warning families when approaching programmatic spending ceilings. Individuals seeking broader community advocacy networks can review past resources, such as the DP Policy Pulse blog series, which highlights active regional advocacy groups.
For individualized inquiries, stakeholders are continually advised to make their case manager the primary point of contact, as they retain the most direct access to state resources, operational updates, and local provider networks.
