What is Alabama's Community Waiver Program?

The Community Waiver Program (CWP) is an Alabama Medicaid HCBS program for people with intellectual disabilities, run with the Alabama Department of Mental Health's Division of Developmental Disabilities. It began Nov. 1, 2021, under a section 1115 demonstration paired with a 1915(c) waiver, and it emphasizes employment, self-direction, family support and living in homes that providers don't own.

Can family members be paid caregivers under Alabama's CWP?

Yes, for certain self-directed services. Alabama's renewal application says an amendment effective Feb. 1, 2026, allows legally liable relatives, including parents, guardians, spouses and other legally responsible relatives, to be paid to provide specific self-directed CWP services when the waiver's criteria for approving those arrangements are met.

Alabama seeks 5-year CWP waiver renewal; comments to Nov. 6

CMS is taking comments to Nov. 6, 2026, on Alabama's request to renew its Community Waiver Program for intellectual disability to 2031. The state would drop the little-used Group 5, and CMS has extended the current demonstration to Sept. 30, 2027, while talks continue.

Direct Support News desk · October 7, 2026 · Updated October 18, 2026 · 3 min read

Alabama is asking CMS to renew its Community Waiver Program (CWP) for people with intellectual disabilities for five more years, and federal comments are open Oct. 7 through Nov. 6, 2026. CMS announced the comment window in an Oct. 7 Medicaid.gov bulletin. The Alabama Medicaid Agency's renewal application and two Sept. 30 CMS letters are posted on the program's Medicaid.gov page.

What Alabama is asking for

Five more years. The section 1115 demonstration would run through Sept. 30, 2031. It works alongside a concurrent 1915(c) waiver and is run by Alabama Medicaid with the Alabama Department of Mental Health's Division of Developmental Disabilities (ADMH-DDD).
Drop Group 5. This 1115-only group served adults with intellectual disabilities who needed HCBS but did not meet institutional level of care. The state says enrollment stayed "extremely low," and it asked to end that authority effective Oct. 1, 2026. The CWP's four 1915(c) enrollment groups continue.
Time to decide on the bigger system. The application says the renewal keeps the CWP running while the state weighs the future of its three intellectual disability waivers: the CWP, the Intellectual Disabilities (ID) waiver and the Living at Home (LAH) waiver. The state says no final decision on consolidating them has been made.

Timeline

CMS approved the CWP in October 2021, and it began Nov. 1, 2021.
The state took public comments Aug. 10–Sept. 15, 2026, with hearings Aug. 20 in Birmingham and Sept. 8 in Montgomery.
Alabama submitted the request Sept. 29, and CMS found it complete on Sept. 30.
On Sept. 30, CMS also granted a temporary extension so negotiations can continue. The demonstration now expires Sept. 30, 2027, unless it is renewed sooner, and the current terms and budget agreement still apply.
CMS wrote that it expects the renewal to fall under the new section 1115(g) budget neutrality requirements that start Jan. 1, 2027, under State Medicaid Director Letter #26-003. That means the CMS Chief Actuary must certify that the demonstration won't increase federal Medicaid spending compared with spending without it.

What the state's evaluation found

The application cites the CMS-approved interim evaluation by Health Management Associates. It compares the CWP with Alabama's legacy ID and LAH waivers as of Demonstration Year 3:

Enrollment: net enrollments from the waiting list, not counting new appropriations, rose from a historical average of 204 a year to 301 and 293 in Years 2 and 3. The CWP supported 443 participants enrolled from the waiting list as of the application.
Jobs: 14.0% of assessed CWP participants were in competitive integrated employment, compared with 3.0% in the legacy waivers.
Self-direction: 40.1% of CWP participants used self-directed services, versus 12.3%. Self-directed services made up 17.7% of CWP spending, versus 5.3%.
Where people live: 84.7% of CWP participants lived in settings not owned or controlled by providers, versus 44.3%.
Cost: average monthly cost per participant was $3,789 in the CWP and $11,301 in the legacy waivers. These are two different programs with different service mixes, not matched groups of people.

An amendment effective Feb. 1, 2026, lets legally liable relatives, including parents, guardians and spouses, be paid for certain self-directed CWP services when the waiver's criteria are met.

Not every comment was supportive. Two provider associations backed the CWP's original goals but raised concerns about how it has been carried out, and they recommended moving current participants to the legacy waivers until a consolidated waiver is approved. The state replied that it would keep services continuous and limit disruption until it decides on the three waivers.

Why this matters for providers and DSPs

For Alabama providers, the renewal keeps the CWP's rules, with its emphasis on employment, self-direction and homes that providers don't own, in place while the state decides whether to merge its three waivers. Agencies serving both CWP and legacy participants should keep running two rule sets for now and watch for a consolidation proposal.

For DSPs, more self-direction and paid relatives change who is doing the hiring. More of the work may be booked through families and financial management services instead of agencies, and supported employment roles keep growing.

Nationally, this is an early test of the new 1115(g) budget neutrality rule for an HCBS demonstration. Other states with 1115-based disability programs will be watching how CMS certifies it. Comments are open on Medicaid.gov through Nov. 6.