42 C.F.R. § 441.472 – Budget methodology.

(a) The State shall set forth a budget methodology that ensures service authorization resides with the State and meets the following criteria:
1. (1) The State's method of determining the budget allocation is objective and evidence based utilizing valid, reliable cost data.
2. (2) The State's method is applied consistently to participants.
3. (3) The State's method is open for public inspection.
4. (4) The State's method includes a calculation of the expected cost of the self-directed PAS and supports, if those services and supports were not self-directed.
5. (5) The State has a process in place that describes the following:
  1. (i) Any limits it places on self-directed services and supports, and the basis for the limits.
  2. (ii) Any adjustments that will be allowed and the basis for the adjustments.
(b) The State must have procedures to safeguard participants when the budgeted service amount is insufficient to meet a participant's needs.
(c) The State must have a method of notifying participants, or their representative, if applicable, of the amount of any limit that applies to a participant's self-directed PAS and supports.
(d) The budget may not restrict access to other medically necessary care and services furnished under the plan and approved by the State but not included in the budget.
(e) The State must have a procedure to adjust a budget when a reassessment indicates a change in a participant's medical condition, functional status or living situation.