New Mexico - Transitional Assistance Services — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-10

The New Mexico Health Care Authority (HCA) Medical Assistance Division (MAD) and the Developmental Disabilities Supports Division (DDSD) fund one-time institutional discharge expenses under the title Community Transition Services (CTS) across the Centennial Care 1115 Waiver and the 1915(c) Developmental Disabilities (DD) Waiver. Approval to bill for these setup costs requires an agency to first secure a Medicaid Provider Agreement through the DDSD Provider Enrollment Relations Unit (PERU) before submitting a business license and application to the YES.NM Medicaid portal.

Agencies must hold a minimum $10,000 fidelity bond naming the State of New Mexico Health Care Authority as a loss payee and $1,000,000 in liability insurance prior to enrollment. The service reimburses up to a lifetime cap for concrete expenses like security deposits, utility setup fees, and essential furnishings rather than ongoing direct care.

1. Service Definition and Scope

Community Transition Services (CTS) in New Mexico cover non-recurring set-up expenses for individuals transitioning from an institutional setting, such as a nursing facility or ICF/IID, to a private community residence where they are directly responsible for their own living expenses.

The service is strictly limited to one-time setup costs and does not cover ongoing rent, food, or recreational items. It is designed to remove financial barriers to community integration.

• Service Name: Community Transition Services (CTS)
• Eligible Expenses: Security deposits, utility set-up fees, essential furnishings, and moving expenses
• Excluded Costs: Monthly rental or mortgage payments, regular utility charges, and food
• Funding Authority: Centennial Care 1115 Waiver and 1915(c) Developmental Disabilities (DD) Waiver
• Benefit Limit: Capped at a specific lifetime amount per participant, historically up to $3,500 under Centennial Care

2. Regulatory and Oversight Agencies

The New Mexico Health Care Authority (HCA) oversees the Medicaid program and waiver administration. The Developmental Disabilities Supports Division (DDSD) directly manages provider enrollment for 1915(c) waivers.

The Medical Assistance Division (MAD) handles the Centennial Care 1115 waiver, while the Division of Health Improvement (DHI) conducts provider audits and incident management.

• New Mexico Health Care Authority (HCA): https://www.hca.nm.gov
• Developmental Disabilities Supports Division (DDSD): https://www.hca.nm.gov/programs-and-services
• Provider Enrollment Relations Unit (PERU): https://www.hca.nm.gov/provider-enrollment-relations
• YES.NM Medicaid Portal: https://yes.nm.gov
• Aging and Long-Term Services Department (ALTSD): https://www.aging.nm.gov

3. Gatekeeping Prerequisites: Who Can Even Apply

New Mexico operates an open, continuous enrollment process for DDSD waiver providers, meaning there is no closed network or RFP procurement window blocking new applicants for Community Transition Services.

However, applicants must meet strict insurance and business licensure prerequisites before PERU will process a Provider Agreement. Without these financial and local municipal approvals, the application is rejected.

• Procurement Model: Continuous, open enrollment overseen by DDSD PERU; no RFP required
• Fidelity Bond Requirement: Must obtain a fidelity bond equal to 25% of the Provider Agreement amount (minimum $10,000) naming the HCA as a loss payee
• Liability Insurance: Must hold $1,000,000 per occurrence liability insurance naming the HCA as an additional insured
• Business License: Must hold an active local business license for each city/county where services are provided
• HCBS Settings Compliance: Must demonstrate compliance with the CMS HCBS Final Rule settings requirements in the initial application policies

4. Licensure and Certification Requirements

New Mexico does not issue a distinct facility or agency license for Community Transition Services. Instead, providers are certified through the DDSD Provider Enrollment process.

Agencies demonstrate administrative capacity, financial solvency, and adherence to General Provider Requirements to secure a Provider Agreement.

• State Licensure: No specific DOH facility license exists for CTS; authority is granted via DDSD Provider Agreement
• Application Submission: Submitted directly to the DDSD Provider Enrollment Relations Unit (PERU)
• Board of Directors: Agencies must submit a complete Board of Directors roster (names, addresses, emails) to PERU
• Annual Renewal: Provider Agreements and insurance policies must be submitted to PERU annually
• Subcontractor Tracking: Agencies using subcontractors for transition coordination must submit their credentials to PERU

5. Medicaid Provider Enrollment

After securing the DDSD Provider Agreement, agencies must enroll as a New Mexico Medicaid provider through the YES.NM portal.

Failure to maintain the local business license on the YES.NM portal results in termination of the Medicaid provider number.

• Enrollment Portal: YES.NM (https://yes.nm.gov)
• Prerequisite: Approved DDSD Provider Agreement
• Required Uploads: Local business licenses for all operating counties, W-9, and insurance certificates
• NPI Requirement: Must obtain and link a National Provider Identifier (NPI) appropriate for an agency/organization (Type 2)
• Managed Care Contracting: For Centennial Care CTS, providers must subsequently credential and contract with the state's Managed Care Organizations (MCOs)

6. Staffing, Training and Background Checks

Staff coordinating Community Transition Services must meet general DDSD provider training and background check requirements.

Because CTS involves financial coordination and purchasing rather than direct medical care, clinical licensure is not required for the coordinators.

• Background Checks: All staff must clear the New Mexico Department of Health (DOH) Caregivers Criminal History Screening (CCHS)
• Abuse Registry: Staff must be cleared against the NM Employee Abuse Registry prior to hire
• Training Hub: Staff must complete required core curriculum trainings via the DDSD Statewide Training Hub
• Incident Management: Must complete DOH/Division of Health Improvement (DHI) Statewide Incident Management System training
• Subcontractor Credentials: If using subcontractors, their education requirements and resumes must be maintained by PERU

7. Documentation, Policies and Records

CTS providers must maintain detailed financial and administrative records to justify the one-time expenses billed to Medicaid.

The DOH General Provider Requirements mandate a Continuous Quality Improvement Plan and specific emergency protocols.

• Expense Receipts: Must retain original receipts for all security deposits, furnishings, and utility setup fees
• Person-Centered Plan: The transition expenses must be explicitly documented and approved in the participant's Individualized Service Plan (ISP)
• Quality Management: Must update and implement a Continuous Quality Improvement Plan annually
• Policy Updates: Agency policies and procedures must be reviewed and updated at least every three years
• Change Reporting: Must notify DOH in writing within 10 calendar days of any change in executive director, mailing address, or service classification

8. Billing, Rates and Claims

CTS is billed as a reimbursement for actual allowable expenses incurred, up to the waiver's lifetime cap, rather than a fee-for-service hourly rate.

Claims for Centennial Care are submitted to the participant's MCO, while DD Waiver claims are processed through the state's MMIS.

• Reimbursement Model: Actual cost reimbursement up to the authorized ISP limit
• Lifetime Cap: Typically capped at $3,500 per participant under Centennial Care
• Prior Authorization: All transition expenses must be prior-authorized by the Third-Party Assessor (TPA) or MCO before purchase
• Claim Submission: Billed via CMS-1500 or 837P electronic transaction
• Prohibited Billing: Cannot bill for services or items provided to a minor child by their parent/guardian, or to a spouse

9. Approval Sequence and Timeline

The end-to-end process requires sequential approvals from local municipalities, DDSD, and the Medicaid MMIS.

Providers should expect the process to take several months from initial application to MCO contracting.

• Step 1: Obtain local business licenses for target service areas
• Step 2: Secure $10,000 minimum fidelity bond and $1M liability insurance
• Step 3: Submit Provider Agreement application to DDSD PERU
• Step 4: Receive DDSD approval and Provider Agreement execution
• Step 5: Submit Medicaid enrollment application via YES.NM portal
• Step 6: Complete credentialing with Centennial Care MCOs

10. Common Denials and Survey Findings

The Division of Health Improvement (DHI) audits waiver providers and frequently cites agencies for administrative and documentation failures.

For CTS, financial mismanagement or failure to maintain continuous insurance coverage are primary risks.

• Insurance Lapses: Failure to submit annual liability and fidelity bond renewals to PERU
• Business License Expiration: Medicaid numbers are terminated if local business licenses are not updated annually in YES.NM
• Unapproved Items: Billing for ongoing rent or food instead of allowable one-time setup costs
• Missing Receipts: Inability to produce original vendor receipts for purchased furnishings or deposits during a DHI audit
• Settings Rule Violations: Purchasing items for a residence that does not meet HCBS Final Rule integration standards

11. Key Contacts and Resources

Providers must interact with multiple divisions within the New Mexico Health Care Authority.

The Provider Enrollment Relations Unit (PERU) is the primary contact for DDSD waiver enrollment.

• Provider Enrollment Relations Unit (PERU): https://www.hca.nm.gov/provider-enrollment-relations
• YES.NM Medicaid Portal: https://yes.nm.gov
• DDSD Programs and Services: https://www.hca.nm.gov/programs-and-services
• HCBS Settings Final Rule Info: https://www.hca.nm.gov/centers-for-medicare-and-medicaid-home-and-community-based-services-settings-final-rule
• PERU Contact Email: [email protected]

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