State Residential Care and Assisted Living Policy: 2004

ENABLING MEDICAID BENEFICIARIES TO PAY FOR ROOM AND BOARD: Limiting the Amount Facilities Can Charge for Room and Board; Providing State Supplements to the SSI Payment; Providing Housing Subsidies for Low-Income Persons; Using the 300 Percent of SSI Income Standard and Providing an Adequate Personal Maintenance Allowance; Family Supplementation

FOOD STAMPS

EFFECT OF MEDICALLY NEEDY RULES ON THE ABILITY TO PAY FOR ROOM AND BOARD

MEDICAID POLICY ISSUES FOR HOUSING INVESTORS, DEVELOPERS, AND OPERATORS: Reliability of Medicaid Funding Options; Types of Waivers; Waiting Lists; State Policy Regarding Room and Board Payments; Time Frame for Determining Medicaid Eligibility

STATE APPROACHES TO REIMBURSING SERVICES: Flat Rates; Flat Rates that Vary by Setting; Tiered Rates; Rates Based on Case-Mix Systems; Cost-Based Reimbursement and Fee-for-Service Rates; Adequacy of Rates

EXPANDING THE SUPPLY OF ASSISTED LIVING FOR LOW-INCOME INDIVIDUALS

LIST OF BOXES, FIGURES AND TABLES: BOX 1-1. State Licensing and Regulatory Approaches; BOX 1-2. Examples of Definitions of Assisted Living; FIGURE 1-1. Supply Changes; TABLE 1-1. Number of Medicaid Waiver Clients in Residential Settings; TABLE 1-2. Summary of Activities in Residential Care Policy Since 2002; TABLE 1-3. States with Regulations that Include Assisted Living Philosophy; TABLE 1-4. Residency Agreement Provisions; TABLE 1-5. Comparison of Disclosure Requirements; TABLE 1-6. Medicaid Long-Term Care Spending; TABLE 1-7. Nursing Home and Residential Care Supply Data, 2003; TABLE 1-8. States Using Medicaid to Cover Services in Residential Care Facilities; TABLE 1-9. Sources of Public Funding for Services in Residential Care Settings; TABLE 1-10. Differences Between State Plan and Waiver Services; TABLE 1-11. States That Limit Charges for Room and Board; TABLE 1-12. Family Supplementation Policy; TABLE 1-13. State Rate Setting Approaches; TABLE 1-14. New Jersey Rate Schedule; TABLE 1-15. Oregon Service Priority Categories and Payment Rates: Assisted Living; TABLE 1-16. Texas Reimbursement Rates Effective January 1, 2004

NOTES

INTRODUCTION

This compendium describes regulatory provisions and Medicaid policy for residential care settings in all 50 states and the District of Columbia. It updates an earlier report completed in 2002. Information was collected between February and June 2004 by reviewing state web sites and regulations and calling key state contacts to verify information. Section 1 provides an overview of residential care and assisted living policy. Section 2 presents six tables, which compare states' policy in selected areas. Section 3 provides summaries of each state's regulations and policy for residential care settings, including assisted living facilities.

This edition of the compendium differs from earlier editions in that it uses "residential care setting" or "residential care facility" as the generic terms for all types of group residential care settings, rather than the term assisted living. Although many states use the term assisted living generically to cover virtually every type of group residential care on the continuum between home care and nursing homes, for many stakeholders the term assisted living still represents a unique model of residential care that differs significantly from traditional types of residential care such as board and care. When discussing state statutes and regulation, the compendium uses the terms that each state uses.

Although adult foster care/adult family care is a type of residential care, it is not included in this report. However, some states now license adult foster/family care under their assisted living regulations. For example, North Carolina's statute defines adult family homes as serving two to six residents and adult care homes serve seven or more residents, but licenses both settings as assisted living residences.

Thirteen states (Alabama, Connecticut, Georgia, Kentucky, Louisiana, New Hampshire, New Mexico, North Carolina, Oklahoma, Rhode Island, South Carolina, South Dakota, and Utah) define at least one licensing category to include all residential care settings that serve one or more residents. Three states (Florida, Minnesota, and Tennessee) have a threshold of two or more, and eight states (Alaska, Arkansas, Colorado, Idaho, Illinois, Massachusetts, Missouri, and Vermont) have a threshold of three or more. A few states have different thresholds within a licensing category.

Consequently, in some states, the number of people served is no longer a major factor distinguishing the licensing category of adult foster/family care from that of assisted living. However, these states may still designate the number of people who may be served to distinguish between types of settings for other regulatory purposes, e.g., staffing requirements. Information about thresholds is generally noted in the state summary tables in Part III of this compendium.

Residential care is an important long-term care service option, particularly for individuals who cannot live alone but do not require the skilled level of care that nursing homes provide. The purpose of this compendium is to inform residential care policy by providing detailed information about each state's approach to regulating residential care, as well as its funding for services in these settings.

OVERVIEW OF POLICY DEVELOPMENTS SINCE 2002

In 2004, states reported 36,451 licensed residential care facilities with 937,601 units/beds compared to 36,283 facilities with 909,196 units/beds in 2002; these numbers do not include facilities licensed as adult foster/family care or facilities licensed by Departments of Mental Retardation/Developmental Disabilities (MR/DD) or Mental Health.¹ Compared to the previous four years, the growth rate in the supply of licensed facilities was basically flat between 2002 and 2004, and the number of number of units or beds rose only 3 percent. See Figure 1-1 for a comparison of growth rates in these years.

FIGURE 1-1. Supply Changes

While growth was considerably higher between 1998 and 2000--30 percent nationwide--much of that increase resulted from high growth rates in a few states (214 percent in Delaware; 144 percent in Iowa, 139 percent in New Jersey, and 119 percent in Wisconsin); and ten states with growth rates between 40 percent and 100 percent (Alaska, Arizona, Kansas, Indiana, Massachusetts, Minnesota, Nebraska, New York, South Dakota, and Texas). Between 2000 and 2002, only two states, Arizona and Kansas, reported growth above 40 percent, and three--Nebraska, Nevada, and New Jersey--above 36 percent.

While the growth rate in units/beds nationwide was only 3 percent between 2002 and 2004, growth in ten states exceeded 20 percent (Alabama, Delaware, Hawaii, Kansas, Louisiana, Michigan, New Jersey, Oregon, Utah, and Wisconsin) as smaller facilities closed and larger, new facilities were licensed. Seven states reported a decline in the number of facilities but modest growth in the number of units (Colorado, Florida, North Carolina, Oklahoma, Pennsylvania, South Carolina, and Tennessee). Oregon extended a moratorium on new assisted living and residential care facilities. In 2004, three states--California, Florida and Pennsylvania--account for 33 percent of all units/beds, down slightly from 34 percent in 2002 and 36 percent in 2000.

The 2004 review of state policy and activity found that regulation of residential care settings continues to evolve. Regulatory changes tend to address the challenges posed by serving frailer and sicker residents and concerns among state licensing staff about inappropriate retention, adequacy of care, and the shortage of trained staff. Provisions revised include those related to staffing requirements, direct care and administrative training requirements, criminal background checks, admission and retention criteria, disclosure requirements, and resident agreements.

Twenty-eight states revised their regulations in 2003 and 2004, and 22 states reported current activity to revise regulations. States continue to address the need for specialized care for residents with Alzheimer's disease and other dementias; 44 states now have requirements for residential care facilities serving people with dementia. These requirements address disclosure, services available, admission/discharge criteria, staffing, training, activities, environment, and security. Twenty-six states have specific disclosure requirements for facilities that market themselves as special care facilities for persons with dementia.

States also continue to revise their residential care regulations to add a service philosophy. Finally, the number of states using the term assisted living for residential care settings continues to increase. Since 2002 the term was adopted in Rhode Island, Vermont, and in statute in New Hampshire (regulations were still being drafted in 2004). Forty-one states and the District of Columbia now have a licensing category or statute that uses the term assisted living.

TABLE 1-1. Number of Medicaid Waiver Clients in Residential Settings (selected states)
State	2000	2002	2004
Arizona	1,240	2,300	3,067
Colorado	2,654	3,773	3,804
Florida¹	1,458	2,681	4,167
Georgia	2,262	2,759	2,851
Minnesota²	397	2,895	4,144
New Jersey	699	1,500	2,195
Oregon¹	2,573	3,600	3,731
Washington¹	2,919	3,762	7,404
These states also serve individuals in residential care settings using the Medicaid state plan personal care option: Florida (14,188), Oregon (1,127), and Washington (1,331). Minnesota also serves 2,238 people in residential care through a state funded program.

Another continuing trend is the increase in Medicaid coverage of services in residential care settings. In 2004, 41 states reported serving about 121,000 residents in residential care settings--including assisted living but excluding adult foster/family care--up from 102,000 in 2002.² Since 2002, Medicaid coverage has been implemented in Arkansas, extended to a new licensing category of residential care in Vermont, and approved in Alabama and the District of Columbia. California is developing a 1915(c) waiver application for a demonstration project. CMS approved a Medicaid HCBS waiver for West Virginia to conduct a pilot program in public housing sites in four counties. The number of people served under Medicaid grew more slowly between 2002 and 2004 compared to earlier years. Table 1-1 presents the number served under Medicaid waivers in six states over a 4-year period.

TABLE 1-2. Summary of Activities in Residential Care Policy Since 2002
State	Activities	Public Financing
Alabama	The state revised rules governing building requirements for assisted living facilities and special care assisted living facilities in July 2003; and revised provisions for incident investigations provisions in 2004. A waiver to serve persons with dementia in assisted living facilities has been approved but not implemented due to budget constraints.	Medicaid Waiver approved
Alaska	The state is consolidating state licensing statutes, which are expected to be completed in 2004 and effective by the end of 2005. The state transferred the Assisted Living Licensing Unit from the Division of Senior and Disability Services to the Division of Public Health.	Medicaid Waiver
Arizona	The state is forming a small workgroup to make recommendations for revisions to the assisted living rules which were expected to be final by the end of 2004.	Medicaid Waiver
Arkansas	The state approved rules for a new category of assisted living. A Medicaid waiver was approved to cover services in ALFs. Personal care services in RCFs are covered under the Medicaid state plan.	Medicaid State Plan Waiver Planned
California	State agencies are studying broad changes to the regulations. A task force has been formed to develop Medicaid coverage for two models: licensed residential care facilities and supportive housing and services.	Medicaid Waiver Planned
Connecticut	The state is reviewing provisions related to the level of care provided by managed residential communities. The state revised medication administration rules in 2002. The state's Housing Finance Agency and Medicaid are implementing a pilot affordable assisted living program.	Medicaid Waiver State funds
Colorado	The state approved rules changing the licensing category to assisted living and adding intermediate sanctions in March 2004.	Medicaid Waiver State funds
Delaware	Changes in the definition of "incident" and "reportable" have been proposed by the state's licensing agency in 2004.	Medicaid Waiver State funds
District of Columbia	An RFP has been issued to develop rules for an assisted living category approved by the District Council. The Medicaid waiver will be implemented once the rules are adopted.	Medicaid Waiver approved
Florida	The state is considering technical changes to the assisted living regulations. The Department of Elder Affairs transferred responsibility for training administrators and direct care workers to private organizations.	Medicaid Waiver State Plan
Georgia	The state issued rules for a new residential care category called community living arrangements in 2002.	Medicaid Waiver
Hawaii	The licensing agency is planning to establish licensing fees that would be used for training and other activities related to licensing. The state is considering changes to the structural requirements for facilities.	Medicaid Waiver
Idaho	The state is reviewing residential care statutes and rules and is developing draft revisions for comment in 2004.	Medicaid Waiver
Illinois	The state modified life safety code requirements for shelter care facilities rules in 2003. In 2004, the licensing agency proposed rules allowing designation of licensed units in assisted living and shared housing establishments.	Medicaid Waiver
Indiana	The state revised regulations in 2003.	Medicaid Waiver
Iowa	Revised regulations became effective in May 2004. The state has transferred oversight authority from the Department on Aging to the Department of Inspection and Appeals.	Medicaid Waiver
Kansas	The state transferred responsibility for regulating assisted living facilities to the Department of Aging in 2004.	Medicaid Waiver
Kentucky	No reported changes since 2001.	None
Louisiana	The state will consider revisions to the regulations dealing with dementia care, negotiated risk agreements, and other issues during 2004 and 2005.	Medicaid Waiver for demonstration planned
Maine	New regulations consolidating several categories of assisted living (congregate housing, residential care facilities, and adult family homes) became effective in September 2003.	Medicaid Waiver State Plan State funds
Maryland	The state formed a work group in 2003 to conduct a thorough review of the regulations and recommend changes to the legislature at the end of 2004.	Medicaid Waiver State funds
Massachusetts	The state revised regulations in December 2002 and continues to review statutes and regulations to determine if further changes are needed.	Medicaid State Plan
Michigan	In 2004, the licensing agency submitted revisions to the Homes for the Aged rules to the legislature for review before being promulgated. * Michigan's Medicaid waiver serves residents in elderly housing buildings that are called assisted living but are not required to be licensed.	Medicaid Waiver* State Plan
Minnesota	The state adopted new training requirements for facilities that serve people with dementia in 2003. The state amended its waiver to cover residents with incomes up to 300 percent of the federal SSI benefit in 2003.	Medicaid Waiver
Mississippi	The state adopted rule revisions in 2002 and 2003. The most significant change expanded requirements for criminal background checks.	Medicaid Waiver
Missouri	The Department of Health and Senior Services submitted revisions addressing fire safety and evacuation and administrator requirements to the Board of Health. The changes are expected to be finalized in the fall of 2004.	Medicaid State Plan
Montana	In 2003, the state enacted legislation changing the licensing category from personal care facilities to assisted living and modifying the requirements for assisted living facilities. The state is working on regulations, which are expected to be effective in May 2004. The state developed separate requirements for facilities serving people with dementia.	Medicaid Waiver
Nebraska	The state revised its regulations for assisted living facilities in 2003. Facilities may not use the assisted living term unless they are licensed.	Medicaid Waiver
Nevada	In 2004, the state amended its Medicaid waiver to cover a broader array of services in assisted living and clarified various definitions in the licensing rules. The state also enacted a new law limiting sharing of units to two residents by consent and requires toilet facilities in each unit.	Medicaid Waiver
New Hampshire	The state is still revising rules for its assisted living category and will operate under expired rules until the new rules are issued.	Medicaid Waiver
New Jersey	The regulations expire in 2004 and the state is drafting revisions, which will be published in the fall of 2004. In the same year, the state enacted legislation establishing training requirements for staff serving people with dementia.	Medicaid Waiver
New Mexico	The state is revising rules for adult residential care facilities. A Committee formed by the Department of Health is working on revisions to education and training requirements for direct care workers and administrators, which are expected to be finalized in 2004.	Medicaid Waiver
New York	In 2004, the state enacted an assisted living reform law creating a new level of service for assisted living facilities. Facilities may obtain a certificate allowing them to offer enhanced assisted living services to support aging in place.	Medicaid State Plan
North Carolina	The state gave its Division of Facility Services temporary rule making authority to enable it to respond quickly to priority issues such as discharge requirements, compliance, and training.	Medicaid State Plan
North Dakota	In 2003, the state replaced its registration process for assisted living programs (housing with services) with new licensing requirements.	Medicaid Waiver State funds
Ohio	The state is revising its residential care facility rules.	None
Oklahoma	In 2004, the Department of Health proposed rules to change physical plant standards.	None
Oregon	The state extended a moratorium on new assisted living facilities until June 2005. The state adopted substantial changes to the regulations for residential care facilities in 2004, and revised requirements for criminal background checks.	Medicaid Waiver
Pennsylvania	The state expects to finalize revisions to its personal care home rules in September 2004. Legislation is pending that would create an assisted living services licensing program and expand Medicaid coverage of assisted living services.	Medicaid Waiver pilot
Rhode Island	The state implemented rule revisions in 2004, which address dementia training requirements, quality improvement, staff training, functional assessments, and care philosophy. The state also implemented a pilot residential care project for low-income persons, designed by the state Department of Elderly Affairs and the RI Housing Finance Agency.	Medicaid Waiver
South Carolina	The state issued guidelines for conducting criminal background check in October 2002 and enacted legislation allowing trained aides to administer selected prescribed medications. Coverage under the Medicaid state plan was implemented.	Medicaid State Plan
South Dakota	The state made minor rule changes in December 2002 and is working on revisions to the life safety code. The state is planning to amend its Medicaid waiver to broaden coverage of services available in assisted living centers.	Medicaid Waiver State funds
Tennessee	The state revised assisted care living facility rules in 2003, which addressed reporting of unusual events, policies and procedures for health care decision-making for incompetent residents, and the retention of residents.	None
Texas	The state revised regulations in 2002 and 2003 and is considering further revisions that would authorize electronic monitoring, set an administrative penalty schedule, and require central air conditioning in new facilities.	Medicaid Waiver
Utah	The state revised rules in 2002 and has formed a work group to review provisions regarding medication administration. In 2004, the state expanded its Medicaid state plan managed care program that covers assisted living.	Expanded Medicaid State Plan
Vermont	New regulations for a category of assisted living were made effective in March 2003. Medicaid waiver coverage was extended to assisted living residences, and the state has implemented a program to reimburse for "assistive care services" under the Medicaid state plan.	Medicaid Waiver State Plan
Virginia	The state is reviewing regulations. Some revisions were made effective in March 2003. *Virginia uses state funds to support a limited number of residents formerly served under a discontinued waiver.	None*
Washington	The state has completed a two year process for revising its regulations. Revisions will be effective in September 2004. The state also revised its Medicaid reimbursement methodology and implemented a case mix reimbursement system in 2003.	Medicaid Waiver State Plan
West Virginia	In 2004, the state received CMS approval for a pilot Medicaid waiver to serve elders in converted public housing buildings in four counties. In 2003, the state combined personal care homes and residential board and care homes into one category of assisted living residences. The state finalized rules for assisted living residences in February 2004.	Medicaid Waiver pilot
Wisconsin	The state is working with providers and stakeholders to develop strategies to improve quality and to identify needed changes in the rules for Community Based Residential Facilities.	Medicaid Waiver State Plan
Wyoming	No reported changes since 2001.	Medicaid Waiver

DEFINING ASSISTED LIVING

The widespread use of the term assisted living and the considerable state variability in its definition continues to fuel debate about what assisted living is and should be, how it should be regulated, particularly as the number of residents with higher levels of need increases, and whether facilities that do not support key assisted living principles should use the term.

States historically have licensed two general types of residential care: (1) adult foster care or family care, which typically serves five or fewer residents in a provider's home; and (2) group residential care that typically serves six or more residents in a range of settings (from large residential homes to settings that look like commercial apartment buildings or nursing homes). States have used many names for these larger group residential care settings, including: board and care homes, rest homes, adult care home, domiciliary care homes, personal care homes, community-based residential facilities, and assisted living. Until recently, the most frequently used term was board and care, though today all types of group residential care are generally referred to as assisted living.

The physical character of a substantial portion of older group residential care facilities is quite institutional, with two to four persons sharing a bedroom, and as many as eight to ten residents sharing a bathroom. Concerned about the institutional character of these settings, policymakers in Oregon--and gradually in other states--developed a new licensing category called assisted living. What was new and desirable about assisted living was that it offered residents what traditional board and care facilities did not--a philosophy of care that emphasized privacy and the ability to have greater control over daily activities such as sleeping, eating, and bathing.

Consumer preference for the new assisted living model of residential care led providers to market all types of residential care facilities as "assisted living"--whether or not they provided private units or operated with a service philosophy that assures resident autonomy. Forty-one states and the District of Columbia now use the term assisted living in their residential care regulations. In some states, assisted living is a specific model with a consumer-centered service philosophy, private apartments or units, and a broad array of services which support aging-in-place. In others states, residential care licensing categories have been consolidated under a new general set of "assisted living" rules that might cover the new model of assisted living, as well as board and care, multi-unit elderly housing, congregate housing and sometimes even adult family or foster care (e.g., Maine, Maryland, and North Carolina).

Assisted living may be a licensed setting in which services are delivered or a licensed agency that delivers services in a range of settings. Four states (Connecticut, Maine, Minnesota, and New Jersey) describe assisted living services that may be provided in two or more settings. Connecticut and Minnesota see assisted living as a service, and license the service provider (which may be a separate entity from the organization that owns or operates the building). Other states see assisted living as a building in which supportive and health related services are provided. The operator of the building is licensed, and services may be provided by the operator's staff or contracted to an outside agency. See Box 1-1 for a more detailed description of state's licensing and regulatory approaches.

Generic use of the term assisted living obscures the differences between types of residential care settings, and makes it difficult for consumers to determine which setting will best meet their current and future needs. A recent study of six states' use of Medicaid to fund services in residential care settings, stakeholders in every state except Oregon cited public confusion about residential care options as a major problem.³

In 2000, the U.S. Senate Aging Committee held a hearing and challenged the industry to address concerns raised in a General Accountability Office (GAO) report, one of which was the lack of a common definition of assisted living and resulting consumer confusion about this long-term care option. This and subsequent hearings led to the formation of the Assisted Living Workgroup (ALW) designed to bring together assisted living stakeholders to make recommendations to ensure high-quality care for all assisted living residents and to develop a common definition. The workgroup included over 50 organizations with a variety of interests including industry associations, professional organizations, consumer and advocacy groups, and regulators. See Box 1-2 for examples of various definitions of assisted living, including the one proposed by the ALW.

BOX 1-1. State Licensing and Regulatory Approaches

Institutional Model. This model has minimum building and unit requirements; typically, multiple occupancy bedrooms without attached baths, and shared toilets, lavatories, and tub/shower areas. Generally, states permit these facilities to serve people who need assistance with activities of daily living (ADLs). But they either do not allow nursing home eligible residents to be admitted or do not allow facilities to provide nursing services. Historically, this model did not allow residents who met the criteria for placement in a nursing home to be served. However, as residents have aged in place, some states have made their rules more flexible to allow a higher level of service. For example, some states allow skilled nursing services to be provided for limited periods by a certified home health agency. North Carolina is one of the states that using this approach.

Housing and Services Model. This model licenses or certifies facilities to provide a broad range of long-term care services in apartment settings to persons with varying service needs, some of whom may be nursing home eligible. The state allows providers to offer relatively high levels of care, although licensed facilities may set their own admission/retention polices within state parameters and may choose to limit the acuity of its residents. Depending on the state, some or all of the needs met in a nursing home may also be met in residential care settings. By creating a separate licensing category for this model and retaining other categories, states distinguish these facilities from board and care facilities. Oregon is one of the states using this approach.

Service Model. This model licenses the service provider, whether it is the residence itself or an outside agency, and allows existing building codes and requirements--rather than new licensing standards--to address the housing structure. This model simplifies the regulatory environment by focusing on the services delivered rather than the architecture. Approaches for regulating services may also specify the type of buildings, apartment or living space that can qualify as assisted living. Minnesota is one of the states using this approach.

Umbrella Model. This model uses one set of regulations to cover two or more types of housing and services arrangements: residential care facilities, congregate housing, multi-unit or conventional elderly housing, adult family care, and assisted living. Maine is one of the states using this approach.

Multiple Levels of Licensing for a Single Category. Some states set different licensing requirements for facilities in a single category, based on the extent of the assistance the facility provides or arranges and on the type of residents served. For example, Maryland licenses facilities based on the characteristics of residents they serve. The state categorizes low-, moderate-, and high-need residents based on criteria for health and wellness, functional status, medication and treatment, behavior, psychological health, and social/recreational needs. The state may grant a limited number of waivers to facilities allowing them to serve residents who develop needs that exceed the facility's licensing level.

Some of these approaches are not mutually exclusive and may be combined.

As states allow residential care settings to provide more health-related and nursing services, many observers believe that the key challenge in defining assisted living is to distinguish it from nursing homes while recognizing that both settings may serve some similar residents.

Federal law defines a nursing facility as an institution (or a distinct part of an institution) that is primarily engaged in providing skilled nursing care and related services for residents who require medical or nursing care, rehabilitation services for injured, disabled, or sick persons (a skilled level of care), or on a regular basis, health-related care and services to individuals who because of their mental or physical condition require care and services (above the level of room and board) which can be made available to them only through institutional facilities (the minimum level of care).⁴

BOX 1-2. Examples of Definitions of Assisted Living

Assisted Living Workgroup⁵

Assisted living is a state regulated and monitored residential long term care option. Assisted living provides or coordinates oversight and services to meet the residents' individualized scheduled needs, based on the residents' assessments and service plans and their unscheduled needs as they arise. Services that are required by state law and regulation to be provided or coordinated must include but are not limited to:

24-hour awake staff to provide oversight and meet scheduled and unscheduled needs
Provision and oversight of personal care and supportive services
Health related services (e.g., medication management services)
Meals, housekeeping, and laundry
Recreational activities
Transportation and social services

These services are disclosed and agreed to in the contract between the provider and resident. Assisted living does not generally provide ongoing, 24-hour skilled nursing. It is distinguished from other residential long-term care options by the types of services that it is licensed to perform in accordance with a philosophy of service delivery that is designed to maximize individual choice, dignity, autonomy, independence, and quality of life.

Joint Commission on Accreditation of Healthcare Organizations

An assisted living residence is "a congregate residential setting that provides or coordinates personal services, 24-hour supervision and assistance (scheduled and unscheduled), activities, and health-related services. It is designed to minimize the need to move; accommodate individual residents' changing needs and preferences; maximize residents' dignity, autonomy, privacy, independence, choice and safety; and encourage family and community involvement."⁶

Oregon

Assisted living means a building, complex or distinct part thereof, consisting of fully self-contained individual living units where six or more seniors and persons with disabilities may reside. The facility offers and coordinates a range of supportive personal services available on a 24-hour basis to meet the ADL, health services, and social needs of the residents described in these rules. A program approach is used to promote resident self-direction and participation in decisions that emphasize choice, dignity, privacy, individuality, independence and homelike surroundings." No facility in Oregon may use the term assisted living unless they are licensed.

Many individuals who qualify for Medicaid coverage of nursing home care--particularly those who do not require a skilled level of care--receive care at home from family members, home health agencies and publicly funded programs such as the Medicaid home and community-based services (HCBS) waiver program. Because HCBS programs may only serve Medicaid beneficiaries who meet each state's nursing home criteria, their emergence challenged the assumption that persons who needed nursing home care could only be served in a nursing home. It is now recognized that many nursing home eligible persons can be appropriately served in multiple settings, including residential care settings.

Because HCBS waiver programs serve some nursing home eligible persons in home and residential care settings, it is not really possible to develop mutually exclusive definitions for nursing homes and residential care, except for the provision of a skilled level of care. Doing so would severely limit states' ability to offer these residential care settings as a service alternative for nursing home eligible persons. States want to be able to serve at least some nursing home eligible individuals in more homelike residential care settings without imposing the nursing homes' regulatory structure.

Some observers believe there is perhaps too much emphasis on developing a common definition of assisted living given that all 50 states have the authority to define it how they want. Some believe that a better approach would describe assisted living in a way that recognizes the overlap of needs that can be met and the services that can be offered by both nursing homes and assisted living, yet highlights differences between them. One state regulator has suggested the following definition--"Assisted living is a facility which provides housing, meals and long-term care services in a group residential setting that is not a nursing home"--adding that specific requirements for different types of assisted living should then be spelled out in regulation. At the same time, providers need to understand what their liability is in taking a medically fragile individual and their requirements to meet a resident's needs.⁷

To help prospective residents understand the differences between nursing homes and different types of residential care, some states might require--as Oregon does--that facilities use standardized disclosure forms to describe their scope of service, rate structure, caregiver and nursing staff levels. Many believe that this approach will be much more helpful for consumers than a uniform definition of assisted living.

In short, individuals with health needs and impaired abilities can be served in a range of settings by a variety of service providers: home health agencies, home care agencies, adult day care, different types of residential care (adult foster care, board and care, assisted living), and nursing homes. Residential care is an important service option for people who cannot live alone and do not have informal care.

States have the responsibility for regulating residential care settings and their definitions and approaches reflect each state's unique policy environment and preferences. Consequently, development of a standard definition of assisted living is unlikely. The approach to defining and categorizing residential care for research purposes depends on the research question. One national survey grouped facilities according to the level of services and the amount of privacy they offered (high and low).⁸ A study comparing resident outcomes in residential care and nursing homes would need to categorize facilities according to characteristics relevant to outcomes, such as staffing levels and the provision of nursing services and oversight.

ASSISTED LIVING PHILOSOPHY

Twenty-nine states and the District of Columbia reported that they include provisions regarding assisted living concepts such as privacy, autonomy and decision making in their residential care regulations or Medicaid standards. (See Table 1-3.) Some states regulations are more detailed in these matters, others are less so. For example, regulations may state the importance of privacy, but only 11 states with a statement of the philosophy of assisted living require private apartment units;⁹ five have mixed requirements, allowing bedrooms in some settings and individuality apartments in new construction; and 14 allow sharing (apartments or bedrooms) only by resident choice. (See section on Occupancy Requirements and Privacy for additional information.) Examples of state provisions that reference assisted living principles follow.

TABLE 1-3. States with Regulations that Include Assisted Living Philosophy
Alaska Arizona Arkansas District of Columbia Florida Hawaii Idaho Illinois	Iowa Kansas Louisiana Maine Maryland Massachusetts Montana Nebraska	Nevada New Jersey New Mexico New York North Dakota Oklahoma Oregon	Rhode Island South Carolina Texas Vermont Washington Wisconsin Wyoming

Florida's statute describes the purpose of assisted living as "to promote availability of appropriate services for elderly and disabled persons in the least restrictive and most homelike environment, to encourage the development of facilities which promote the dignity, privacy and decision-making ability" of residents. The Florida law also states that facilities should be operated and regulated as residential environments and not as medical or nursing facilities. Regulations require that facilities develop policies to maximize independence, dignity, choice, and decision-making.
Illinois' statute defines assisted living, in part, as a model that (1) assumes that residents are able to direct their services and will designate a representative to direct them if they are unable to do so; and (2) supports the principle that there is an acceptable balance between consumer protection and resident willingness to accept risk and that most consumers are competent to make their own judgments about the services they are obtaining. The statute states that regulation of assisted living establishments and shared housing establishments "shall be operated in a manner that provides the least restrictive and most homelike environment and that promotes independence, autonomy, individuality, privacy, dignity, and the right to negotiated risk in residential surroundings."
New Jersey requires facilities to coordinate services "in a manner which promotes and encourages assisted living values. These values are concerned with the organization, development, and implementation of services and other facility or program features so as to promote and encourage each resident's choice, dignity, independence, individuality, and privacy in a homelike environment," as well as "aging in place and shared responsibility."
Texas' authorizing statute specifies that rules must be developed to promote policies that maximize the dignity, autonomy, privacy, and independence of each resident; and that service delivery should be driven by a philosophy that emphasizes personal dignity, autonomy, independence, and privacy and should enhance a person's ability to age in place.
Oregon, the first state to adopt a specific philosophy for assisted living, states that: "Assisted living … is a program that promotes resident self-direction and participation in decisions that emphasize choice, dignity, privacy, individuality, independence and homelike surroundings."
Washington requires that the basic training curriculum for staff in residential care settings includes instruction on how to perform tasks while incorporating resident preferences; how to maintain residents' privacy and dignity; and how to create opportunities that encourage resident independence.

Unless states operationalize assisted living concepts as specific regulatory requirements--for example, assuring privacy by requiring private rooms or apartments--the choices that facilities make in their physical and organizational structures and their service and training policies will generally determine whether the state's intent is realized. In the absence of specific regulatory requirements, it may be difficult to determine whether a facility is carrying out the regulations' philosophy.

Consumer advocates have questioned whether staff that inspect or survey nursing facilities should also inspect residential care facilities operating under an assisted living philosophy and related rules, without having specific training about this philosophy. Some states provide this training (e.g., Texas requires training for state inspectors on how assisted living differs from nursing homes). The National Academy of State Health Policy (NASHP) 2002 survey of state licensing agencies found that 24 states use different staff to survey residential care facilities than they use for nursing facilities; survey staff in the remaining states inspect both.

Negotiated Risk Agreements

As illustrated in the examples above, assuring resident autonomy is a central concept in the assisted living philosophy. Fifteen states and District of Columbia have regulations referencing a process or approach for negotiating disagreements about residents' autonomy and risk taking and providers' concerns about risk (Alaska, Arkansas, Delaware, Florida, Hawaii, Illinois, Iowa, Kansas, New Jersey, Ohio, Oklahoma, Oregon, Vermont, Washington, and Wisconsin.) States use different terms to describe the process--negotiated risk, managed risk, shared responsibility, compliance agreement, and negotiated plan of care.

Despite differences in the term, most of the regulations share common features, such as requiring that the agreement be written and signed by the resident and the appropriate facility administrator. State regulations typically require that the agreement describe the possible consequences of the resident's actions, the specific concerns of the facility, options that will both minimize the risk and respect resident's choices. They also generally require documentation of the negotiation process, and agreement or lack thereof, and the decision reached by the resident after consideration of the facility's concerns. Several states allow surrogates or sponsors to negotiate risk agreements.

Examples of state's specific provisions follow.

The District of Columbia defines a shared responsibility agreement is a "tool to recognize a resident's right to autonomy by respecting his or her right to make individual decisions regarding lifestyle, personal behavior, safety and individual service plans.
New Jersey defines managed risk as the process of balancing residents' choice and independence with the health and safety needs of the resident and other persons in the facility or program. If a resident's preference or decision places the resident or others at risk or is likely to lead to adverse consequences, the facility may discuss such risks or consequences with the resident (and their representative if the resident wants). The facility can then negotiate with the resident a formal plan to avoid or reduce negative or adverse outcomes.
Oregon's rules do not allow managed risk plans "with or on behalf of a resident who is unable to recognize the consequences of his/her behavior or choices."
Vermont's rules require that the facility notify the resident that the state Long Term Care Ombudsman is available to assist in the negotiated risk process.
Wisconsin's rules state that risk agreements do not mitigate or waiver any tenant's rights.

State licensing officials indicated that the negotiated risk process is not widely used.

OCCUPANCY REQUIREMENTS AND PRIVACY

Historically, the physical character of a substantial portion of residential care was quite institutional--as permitted by state regulation--with two to four persons sharing a bedroom, and as many as eight to ten residents sharing toilet and bathing facilities. The new assisted living model of residential care became popular with older people in large part because it offers what traditional board and care facilities generally do not: privacy and the concomitant opportunity to have greater control over daily activities such as eating and sleeping. Another reason for its popularity is that assisted living facilities built in the 1990s have more desirable physical environments than do board and care facilities, many of which were built in the 1960s and 1970s.

Consequently, single occupancy apartments or rooms dominate the assisted living private-pay market. A survey of non-profit facilities conducted in 1999 by the Association of Homes and Services for the Aging found that 76 percent of the units in free-standing facilities and 89 percent of units in multi-level facilities were private (studio, one-, or two-bedroom units).¹⁰ A similar survey by the Assisted Living Federation of America found that 87.4 percent of units in its member facilities were studio, one-, or two-bedroom units and 12.6 percent were semi-private.¹¹ In a national survey of assisted living facilities in the late 1990s, Hawes, et al. found that 73 percent of the units were private, 25 percent of the units were semi-private (shared by two unrelated persons), and 2 percent were "ward-type" rooms that housed three or more unrelated persons.¹²

A 1998 survey of assisted living facilities by the National Investment Conference (NIC) found that 17 percent of the residents shared a unit. Of these, 52 percent said that they shared their unit for economic reasons, 30.4 percent for companionship, and 14.9 percent because a private unit was not available. Just under 65 percent of those who shared a unit were satisfied with the arrangement and 35.7 percent preferred a single unit.¹³

Nationally, consumer demand, the availability of subsidized units, and the extent of competition are more likely than regulatory policy to determine whether studio or apartment-style living units are available for private pay residents. However, for Medicaid eligible residents, state regulatory policy and Medicaid policy determine the types of units available. For example, Medicaid contracting requirements in Washington require participating facilities to provide private apartments shared only by choice.

Due to the popularity of assisted living, many providers of all types of residential care settings market themselves as assisted living, whether or not they give all private rooms to all residents. Some board and care homes that want to be licensed as assisted living may have an interest in opposing rules requiring apartment-style units and single occupancy. On the other hand, advocates of assisted living as a unique model of care oppose the use of the term assisted living by facilities that do offer private rooms or units to all residents. Consequently, occupancy requirements have become a contentious issue. States have taken a number of approaches to setting occupancy requirements.

Some states have simply amended their statutes to rename board and care homes as assisted living and continue to permit dual occupancy. Others have allowed dual occupancy standards in grandfathered buildings but require new buildings to offer single occupancy units. Some states maintain separate licensing categories, allowing dual occupancy in some settings and requiring single occupancy in others. Several states have multiple licensing categories, and the two-person limit may apply to only one of the categories.

Thirty-five states have rules that allow two people to share a unit or bedroom. Several of these states have multiple licensing categories, and the two-person limit may apply to only one of the categories. Ten states have licensing categories that allow four people to share a room; three states allow three people to share units. A few states to do not specify how many people may share a bedroom.

States that have developed a multiple-setting assisted living model vary the requirements by the setting. For example, New York allows sharing for board and care facilities participating in the Medicaid program but requires apartments in the "enriched housing category," which includes purpose-built residences and subsidized housing. Additional examples of states' requirements follow.

Florida licenses two types of assisted living, one which allows up to four people to share a bedroom, and extended congregate care, which requires private apartments or private rooms shared only by a resident's choice.
New Mexico's Medicaid assisted living waiver provides services in two types of facilities offering "home-like" environments, which offer either units with 220 square feet of living and kitchen space (plus bathroom), or single or semi-private rooms in adult residential care facilities; rooms may be shared only by choice.
Texas covers assisted living services through Medicaid to residents in three settings: assisted living apartments (single occupancy); residential care apartments (double occupancy allowed); and residential care non-apartments (double occupancy rooms).

Four people may share a room under what might be considered board and care licensing rules in Delaware, Georgia, Indiana, Iowa, Michigan, Mississippi, Missouri, Nebraska, Pennsylvania, Rhode Island, South Carolina, and Virginia. Shared toilet facilities and bathing facilities are the rule among states with board and care regulations. State rules that allow bedrooms to be shared by two to four residents require bathrooms and lavatories for every six to ten residents.

While a state's policy sets the parameters for what may be offered and provided, the actual practice may be narrower. Shared units may be allowed, but the market may produce very few or no projects that offer shared units. Further, facilities constructed prior to the development of the assisted living model may offer shared units while most, if not all, newly constructed buildings have predominantly or solely private units.

DISCLOSURE REQUIREMENTS AND RESIDENCY AGREEMENTS

A GAO study of assisted living facilities in four states concluded that while most facilities provide information about the services available, they do not routinely provide information about discharge criteria, staff training and qualifications, services not available from the facility, grievance procedures, and medication policies. The GAO report concluded that the need to provide adequate information to prospective and current residents is a major issue that requires additional oversight.¹⁴

With few exceptions, states that license residential care require facilities to include specific information in residency agreements. Two states do not require residency agreements and Connecticut and Minnesota do not use residency agreements because they license the service provider and the housing provider executes a lease agreement with tenants. Table 1-4 lists the type of information that states may provide in resident agreements and the number of states that require the provision of this information.

TABLE 1-4. Residency Agreement Provisions
Topics Covered	States Requiring	Topics Covered	States Requiring
Services included in basic rate	49	Grievance procedures	21
Cost of service package	44	Termination (including admission and discharge)	20
Admission/discharge	29	Terms of occupancy	18
Refund policy	29	Temporary absences	14
Cost of additional services	27	Accommodations	12
Service beyond basic rate	26	Advance payments	7
Rate changes	25	Period covered	11
Payment/billing	23	Services not available	9
Residents rights	22	Other	20

As can be seen, the majority of states provide information about services, but only about half or less provide information about most of the other topics. Few states require information about medication policy and staffing.

Examples of "other" requirements follow:

Colorado requires facilities to disclose whether it has an automatic sprinkler system.
Kansas requires facilities to give prospective residents citations of relevant statutes, information on advance medical directives, resident rights, and the facility's grievance procedure, before an agreement is signed.
Maine does not allow the resident agreement to contain any provision for discharge which is inconsistent with state rules or law or which implies a lesser standard of care than is required by rule or law. Agreements in Maine must also include information on grievance procedures, tenant obligations, resident rights, and the facility's admissions policy.
Maryland requires disclosure in the agreement of the level of care that the facility is licensed to provide and the level of care needed by the resident at the time of admission. The state also requires facilities to disclose policies concerning shared occupancy and procedures that will be followed when a resident's accommodations are changed due to relocation, change in roommate assignment, or an adjustment in the number of residents sharing a unit.
New Hampshire issued regulations in 2003 requiring disclosure of information to allow residents to compare assisted living residences, independent retirement communities and elder housing, in order to make an informed choice about where to live. The state requires facilities to disclose whether they are licensed; the basic rate; the personal care and other services included in the rate; meals provided; transportation services; recreation and leisure activities; amenities in the living unit; policies regarding deposits/advance payment requirements and refundability; services not included in the basic rate and their cost. Facilities must also provide information about their staffing, including whether staff are available 24-hours a day, and the availability of licensed nurses, personal care attendants, nursing assistants, and maintenance staff.
Wisconsin requires that the qualifications of staff that will provide services be included in the agreement as well as whether services are provided directly or by contract.

Some states require facilities to provide some of the information listed in Table 1-4 in a residents' rights statement rather than a residency agreement, particularly information about grievance procedures.

The GAO study cited unmet consumer expectations for aging-in-place and forced moves as a major resident complaint. Only 20 states require agreements to include information about the facility's criteria for admission, discharge, or transfer.

Finally, several states have rules regarding the format of resident agreements. Kansas requires that agreements be written in clear and unambiguous language in 12-point type. Maryland requires agreements to use accurate, precise, easily understood, legible, readable, "plain" English. Wisconsin requires that agreement formats make it easy to readily identify the type, amount, frequency, and cost of services. Some states require information about provisions that allow staff to inspect living quarters, with the resident's permission.

Most state rules do not have rules for revising or updating resident agreements. However, Alabama, Illinois, Mississippi, and Oregon require that agreements include the period covered by the agreement. Wisconsin required that the agreement be reviewed and updated when there is a change in the resident's condition or at the request of the facility or the resident. Updates are otherwise made as mutually agreed to by the resident and the provider.

ADMISSION AND RETENTION CRITERIA

States regulations pertaining to admission and retention typically consider applicants' or residents' general condition, health-related need including the need for nursing care, physical and cognitive function, and behavioral problems.

Only a few states (e.g., North Carolina and Illinois) do not allow individuals who meet their minimum nursing home level of care criteria to be served in residential care settings. However, virtually all states do not allow persons who need a skilled level of nursing home care to be served in residential care settings (e.g., individuals who require 24 hour-a-day skilled nursing oversight or daily skilled nursing services).

State approaches for setting admission and retention policies can be grouped into three categories:

Full Continuum--states allow facilities to serve people with a wide range of needs;
Discharge Triggers--states develop a list of medical needs or treatments that cannot be provided in a facility and that will result in a resident's discharge from a facility; and
Levels of Licensure--states license facilities based on the needs of residents or the services that may be provided in a specific kind of facility.

These approaches are not mutually exclusive. States may use more than one approach and may also grant waivers for facilities to serve residents whose needs exceed those allowed. Since 2002, Arkansas, Delaware, South Carolina, South Dakota, Vermont, and Washington have modified their admission criteria.

Full Continuum

States using a full continuum approach have broad criteria that allow facilities to serve residents with a wide range of needs, permitting residents to age in place. However, providers are not required to serve everyone who meet these criteria and can establish their own admission and discharge standards within state parameters. They are required to inform prospective residents about these standards and the type of conditions that would trigger discharge. For example, Massachusetts allows providers to meet personal care needs and at a minimum must provide assistance with bathing, dressing, and ambulation. However, they are not required to offer assistance with other ADLs such as toileting and eating. Most other states allow, but do not require, residences to serve people with ADL needs.

States using the full continuum approach include Hawaii, Kansas, Maine, Minnesota, Nebraska, New Jersey, and Oregon, and those with the most flexible rules include Arizona, Hawaii, Kansas, Maine, Maryland, Minnesota, New Jersey, Oklahoma, and Oregon. Examples of this approach follow.

Oregon generally does not limit whom facilities may serve. The rules contain "move out" criteria that allow residents to choose to remain in their living environment despite functional decline as long as the facility can meet the resident's needs. However, facilities are not required to serve all residents whose needs increase. Providers may ask residents to move if: (1) their needs exceed the level of ADL services available; (2) the resident exhibits behaviors or actions that repeatedly interfere with the rights or well being of others; (3) the resident, due to cognitive decline, is not able to respond to verbal instructions, recognize danger, make basic care decisions, express need, or summon assistance; (4) the resident has a complex, unstable, or unpredictable medical condition; or (5) the resident has failed to make payment for charges.
Hawaii's rules do not specify who may be admitted and retained. Rather, each facility may use its professional judgment and the capacity and expertise of the staff to determine who it will serve. Facilities are required to develop their own admission and discharge policies and procedures. Discharge with 14 days notice is allowed based on behavior, needs that exceed the facility's ability to meet them, or a resident's established pattern of non-compliance.
Washington may accept and retain residents if: (1) they can meet the individual's needs, and provide required specialized training to resident-care staff; (2) the individual's health condition is stable and predictable, as determined jointly by the boarding home and the resident or the resident's representative if appropriate; and (3) the individual is ambulatory, unless the boarding home is approved by the Washington state director of fire protection to care for semi-ambulatory or non-ambulatory residents. Individuals must also meet all of the boarding home's established acceptance criteria.
Maine's rules are flexible to allow residents to age in place. The rules allow facilities to determine whom they will admit and the type of services they will provide. They may discharge residents who pose a direct threat to the health and safety of others, damage property, or whose continued occupancy would require modification of the essential nature of the program. Rules regarding the provision of nursing care vary by setting. Residential care facilities may provide nursing services with their own staff only to residents who do not meet the state's nursing home level of care criteria. Residents who meet the level of care criteria can be served, but nursing services must be provided by a licensed home health agency. Congregate housing programs may receive a license to provide nursing and medication administration services by registered nurses (RNs) employed by the program.
New Jersey's rules state that assisted living is not appropriate for people who are incapable of responding to their environment, expressing volition, interacting, or demonstrating independent activity. The rules allow facilities to provide a very high level of care, but they are not required to do so. The rules specifically state that facilities may choose to serve residents who:
- Require 24-hour, seven-day a week nursing supervision,
- Are bedridden longer than 14 days,
- Are consistently and totally dependent in four or more ADLs,
- Have cognitive decline that interferes with simple decisions,
- Require treatment of Stage III or IV pressure sores or multiple Stage II sores,
- Are a danger to self or others, or
- Have a medically unstable condition and/or special health problems.
The state also has a provision that can be characterized as a discharge trigger: facilities may not serve residents who require a respirator or mechanical ventilator or people with severe behavior management problems, such as combative, aggressive, or disruptive behaviors.
Vermont has two levels of licensure. One level--for assisted living--allows for a full continuum of care to be provided to residents who meet the nursing home level of care to be served if the facility can meet their needs except for the following conditions:
- A serious acute illness requiring medical, surgical, or nursing care provided by a general or special hospital;
- Ventilators;
- Respirators;
- Care of Stage III or IV ulcers;
- Suctioning; or
- Two person assistance with transfer or ambulation.
Vermont's other level of licensure--for residential care facilities--allows the provision of personal care and nursing services. Facilities may retain current residents who develop a serious, acute illness as long as the care needs are met by appropriate licensed personnel. However, if the resident wanders, the facility must document appropriate interventions to manage this behavior. Residents may be discharged if they pose a serious threat to self or other residents and are not capable of entering into a negotiated risk agreement; are ordered by a court to move; or fail to pay rent, service, or care charges.

Discharge Triggers

Discharge triggers are used by states to regulate the specific medical needs or treatments that can and cannot be provided by certain kinds of facilities and to determine when a resident can no longer reside in a facility. Most prohibited treatments require performance by skilled nursing personnel. States that use these triggers include: California, Delaware, Florida, Idaho, Illinois, Maryland, Mississippi, Nevada, New Mexico, South Carolina, Tennessee, Virginia, and West Virginia. State rules may overlap as Idaho, Maryland, and Mississippi also license by level of care, and New Jersey, which allows a full continuum of care. Examples of this approach follows.

Tennessee allows facilities to retain for up to 21 days (but not admit) individuals who require intravenous or daily intramuscular injections; gastronomy feedings; insertion, sterile irrigation, and replacement of catheters; sterile wound care; or treatment of extensive Stage III or IV decubitus ulcers or exfoliative dermatitis; or who, after 21 days, require four or more skilled nursing visits per week for any other condition.
Virginia does not allow residential care facilities to serve people who are ventilator dependent; have Stage III or IV dermal ulcers (unless a Stage III ulcer is healing); need intravenous therapy or injections directly into the vein except for intermittent care under specified conditions; have an airborne infectious disease in a communicable state; need psycho-tropic medications without an appropriate diagnosis and treatment plan; or have nasogastric tubes and gastric tubes (except when individuals are capable of independently feeding themselves and caring for the tube or by exception.)

Levels of Licensure

Several states--Arizona, Arkansas, Idaho, Maine, Maryland, Mississippi, Missouri, and Vermont--have two or more levels of licensure based on the needs of residents or the services that may be provided. Examples of this approach follow.

Arizona licenses three levels of care: supervisory care, personal care, and directed care. Residential care facilities providing supervisory care may serve residents who need health or health-related services if these services are provided by a licensed home health or hospice agency. Those with a personal care service license may not accept or retain any resident who is unable to direct self-care; requires continuous nursing services unless the nursing services are provided by a licensed hospice agency or a private duty nurse; has a Stage III or IV pressure sore; or is bed bound due to a short illness unless the primary care physician approves, the resident signs a statement and the resident is under the care of a nurse, a licensed home health agency, or a licensed hospice agency. Facilities licensed to provide directed care may serve residents who are bed bound, need continuous nursing services, or have a Stage III or IV pressure sore.
Arkansas licenses two levels of facilities. Level I facilities cannot serve nursing home eligible residents or residents who need 24-hour nursing services; are bedridden; have transfer assistance needs that the facility cannot meet; present a danger to self or others; and require medication administration performed by the facility.

Level II assisted living facilities can serve nursing home eligible residents and participate in a Medicaid HCBS waiver, but cannot serve residents who need 24-hour nursing services; are bedridden; have a temporary (no more than 14 consecutive days) or terminal condition unless a physician or advance practice nurse certifies the resident's needs may be safely met; have transfer assistance needs, including but not limited to assistance to evacuate the facility in case of emergency, that the facility cannot meet with current staffing; present a danger to self or others; or engage in criminal activities. Facilities may be licensed for both levels of care in distinct parts or separate wings but separate licenses are required for the beds providing each level.
Florida licenses four types of facilities: basic assisted living facilities, limited nursing services, limited mental health services, and extended congregate care (ECC) which is the highest level of care. ECC facilities serve residents with higher needs and provide more services than the other levels including total help with bathing; nursing assessment more frequently than monthly; measurement and recording of basic vital functions; dietary management; supervision of residents with dementia; health education and counseling; assistance with self-administration and administration of medications; provide or arrange rehabilitative services and escort services to health appointments.
Utah licenses two levels of facilities. Type I facilities serve residents who are ambulatory, have stable health conditions, require limited assistance with ADLs and need regular or intermittent care or treatment from facility staff. Type II facilities serve residents who need substantial assistance with ADLs, offer separate living units, and enable residents to age in place as much as possible. Level II residents may be independent or semi-independent but not dependent (needing in-patient or 24-hour continual nursing care for more than 15 days, or needing a two-person assist to evacuate the building). Both types of facilities may assist with or administer medications under supervision of a licensed nurse.

NURSING HOME LEVEL OF CARE ISSUES

States typically have two or more levels of nursing home care and not all persons served in nursing homes may be served in residential care. States distinguish among levels of care primarily for payment purposes. As noted in the discussion of admission and retention policies, above, states typically do not allow facilities to serve persons who require a skilled level of nursing care (as opposed to discrete skilled services, which many states allow in residential care on a limited basis). Only a few states do not allow facilities to serve persons who do not meet the minimum or threshold nursing home level of care criteria.

Generally, it is individuals who meet a state's minimum level of care criteria who can be and are served in residential care settings and states' minimum nursing home criteria vary markedly. Individuals who meet the nursing home criteria in one state may not meet the criteria in another state. Thus, the statement that most states permit residential care settings to serve individuals who are "nursing home eligible" obscures sometimes significant differences in the type and level of care provided in these facilities in different states.

States fall on a continuum from low to high thresholds for nursing home admission. Some states require a person to need assistance with only two ADLs, while others may require that a person be totally dependent in three or more ADLs. Some states require individuals to have a combination of medical conditions/needs and functional limitations; others require only certain medical needs. Of the 45 states whose criteria were reviewed for this study, two used medical criteria only; 13 used medical and functional needs; eight used an assessment score based on a combination of medical and functional needs; and 22 used ADL thresholds. Section 3 provides information about each state's nursing home level-of-care criteria.¹⁵ A few examples of states' criteria follow.

Medical. Alabama requires an individual to need daily nursing or medical services that as a practical matter can only be provided in a nursing facility on an in-patient basis.
Medical and/or functional. Maine requires individuals to need skilled care on a daily basis (nursing or rehabilitation therapies); or extensive assistance with three of the following ADLs (bed mobility, transfer, locomotion, eating, and toileting); or one of several specified combinations of nursing and functional needs.
ADL Threshold. New Hampshire requires individuals to either need assistance with two or more ADLs, or to need 24-hour care for at least one of the following: medical monitoring and nursing care; restorative nursing or rehabilitative care; or medication administration.
Combination of Factors. Illinois requires individuals to have a specific score on a standardized assessment. The score is derived using a score on the Mini-Mental State Examination (MMSE), and impairments in six ADLs and nine instrumental activities of daily living (IADLs) (including ability to perform routine health and special health tasks, and ability to recognize and respond to danger when left alone).

Because Centers for Medicare and Medicaid Services (CMS) gives states considerable flexibility in setting minimum nursing home level of care criteria, states may choose to make this criteria more stringent in response to budget deficits, as Oregon has recently done. In states that cover Medicaid waiver services in residential care settings, increasing the threshold level of care criteria for nursing homes will also increase the threshold for residential care. For example if a state raises its threshold criteria from 2 out of 5 ADL impairments to 3 out of 5 ADL impairments, a person in the former category will no longer be eligible for Medicaid coverage in both nursing homes and residential care settings.

If a state markedly increases the stringency of its minimum nursing home level of care criteria to control nursing home admissions, it would need to ensure that admission and retention criteria for residential care settings allow these settings to continue serving Medicaid waiver clients with the higher level of need required for Medicaid nursing home admission.

SERVICES

One of the attractive philosophical tenets of assisted living is that it allows aging-in-place--meaning that as individuals age and become more disabled, additional services can be provided so that they will not have to move to another residential care setting or to a nursing home.

States seeking to facilitate aging-in-place and to offer consumers a full range of long-term care options allow more extensive services to be provided in residential care facilities, just as they can be provided in an individual's home through home health agencies and in-home service programs.

However, facilities vary in the extent to which aging-in-place is possible, because states generally specify the range of allowable services and a minimum that must be provided, but do not require facilities to provide the full range of allowable services. Facilities are usually authorized to determine which services they will provide within state parameters. Facilities may offer very limited, moderate, or extensive services. Thus, both state regulations and facility policy govern the type, amount, frequency and duration of services provided, and, hence, the ability to age in place.

Thus, although state regulations frequently state their support for aging-in-place, they may also allow facilities to discharge individuals with higher levels of need. A key determinant of the ability to age in place is the extent to which states permit residential care facilities to address residents' nursing and health related needs.

Some experts contend that residential care settings cannot and should not be expected to meet the needs of persons with a high level of disability and/or medically complex conditions. Others agree, arguing that residential care should be a social care model and having nurses on staff is not only unnecessary but undesirable. However, other regulators, particularly in states that allow nurses to delegate specified nursing tasks, believe that residential care settings, like a person's own home or apartment, are appropriate settings for people with severe disabilities and/or health needs. But some observers have expressed concern about direct care staff's ability to recognize and address health problems in medically fragile residents when they are not trained nursing assistants. Many states do allow residential care facilities to provide skilled nursing care, as indicated in the following examples.

Illinois allows health services such as medication administration, dressing changes, catheter care, and therapies, if provided on an intermittent basis.
Florida allows the provision of nursing services under two types of licensure: limited nursing services and extended congregate care. A license for limited nursing services allows facilities to provide nursing services including medication administration and supervision of self-administration, heat and ice cap application, passive range of motion exercises, urine tests, routine dressing changes that do not require packing or irrigation, and intermittent nursing services (e.g., change of colostomy bag and related care, catheter care, administration of oxygen, routine care of an amputation or fracture, prophylactic, and palliative skin care). A license for extended congregate care permits a facility to provide nursing services in addition to those provided under the limited nursing services license. However, the state specifies nursing services that may not be provided under either type of license, including oral or nasopharyngeal suctioning, assistance with tube feeding, monitoring of blood gasses, intensive rehabilitation services for a stroke or fracture or treatment of surgical incisions that are not clean and infection-free, and any treatment requiring 24-hour nursing supervision.
Washington's regulations specify which skilled services may and may not be delivered by licensed nurses and unlicensed staff in residential care settings. RNs or licensed practical nurses (LPNs) may insert catheters, provide nursing assessments, and glucometer readings. Unlicensed staff under the supervision of a licensed nurse may provide Stage I skin care, routine ostomy care, enemas, catheter care, and wound care. Statutory changes in the nurse practice act that would allow greater delegation are pending in the legislature.
New Jersey allows levels of skilled nursing care that are specifically barred in many states; for example, care of Stage III or IV pressure sores, ostomy care, and 24-hour nursing supervision.
Missouri's rules governing residential care facilities allow advanced personal care services to be provided. They include providing services to residents with a catheter or ostomy, those who require bowel or bladder routines, range of motion exercises, assistance applying prescriptions or ointments and other tasks requiring a highly trained aide.
Maine allows residential care facilities and congregate housing programs to provide skilled nursing services.

Several states limit the provision of skilled nursing services in residential care settings by restricting their frequency and duration. Others prohibit facilities from providing these services directly, but allows them--and/or residents--to arrange for their provision through a home health agency. Some states use a combination of approaches, all of which are illustrated in the following examples.

Massachusetts like many states, does not allow residential care facilities to serve residents who need 24-hour nursing services. Skilled services may only be provided by a certified home health agency on a part-time or intermittent basis to persons whose medical conditions require services on a periodic, scheduled basis. In addition, the state allows residents "engage or contract with any licensed health care professional and providers to obtain necessary health care services … to the same extent available to persons residing in private homes.

Because the Massachusetts statute allows skilled nursing services to be provided only by a certified home health agency, RNs hired by an assisted living facility are not allowed to deliver skilled care. An initial draft of new state regulations did not allow the provision of skilled services for more than 90 days in a 1-year period. When the state attorney general's office determined that such limits may conflict with fair housing rules, the state removed the 90-day limit.
Ohio limits the provision of skilled services in residential care facilities to 120 days in a 12 month period with exceptions for special diets, dressing changes, and medication administration.
Iowa allows facilities to provide health related care (i.e., services provided by a RN, a LPN, or home care aide; and services provided by other licensed professionals as defined in regulations). Health-related and personal care services can be provided on an intermittent and part-time basis, which is defined as up to 35 hours a week of personal care and health-related services on a less than daily basis, or up to eight hours personal care and health related services provided seven days a week for temporary periods not exceeding 21 days.
Kentucky allows residents to arrange for additional services under direct contract or arrangement with an outside agent, professional, provider, or other individual designated by the client if permitted by facility policy.

QUALITY ASSURANCE AND MONITORING

In 2003 and 2004, hearings held by the U.S. Senate Special Committee on Aging, reports by the GAO, and newspaper articles all raised concerns about the quality of care in residential care settings, and the challenges providers and state oversight agencies face in assuring quality. In April 2004, the GAO issued a report on quality assurance initiatives in Florida, Georgia, Massachusetts, Texas, and Washington.¹⁶

The report stated that assisted living facilities are more likely to meet and maintain licensing standards if they can obtain help in interpreting those standards and in determining what concrete changes they need to make to satisfy them. It described an initiative in Washington, which established a staff of quality consultants to provide such training and advice to assisted living providers on a voluntary basis. Evaluations at 6 months and 2 years after implementation documented improvements in provider compliance as well as resident health and safety. However, a statewide budget crisis required the state to end funding for the program in order to maintain traditional licensing enforcement functions.

Wisconsin and Kansas have recently initiated activities to better assure quality. The Wisconsin Bureau of Quality Assurance created an Assisted Living Forum for stakeholders to discuss current issues, interpretation of regulations, best practices, quality improvement, staffing issues, national and state trends, and other public policy issues.

Wisconsin has also revised its survey process for residential care apartment complexes, its apartment model of assisted living, which is not licensed but has to be either registered, or certified to serve Medicaid clients. The new process includes a technical assistance component to interpret requirements, provide guidance to staff on consumer quality of life and care; review provider systems, processes and policies; and explain new or innovative programs. The revised survey strategy includes seven types of surveys: initial, standard, abbreviated, complaint, verification, monitoring and self-report. The state determines which type of survey to conduct for each facility based on a range of factors, including its citation history. Abbreviated surveys are performed for facilities without any enforcement actions over the past 3 years and no substantial complaints or deficiency citations.

Kansas has adopted a collaborative oversight approach. Facility staff accompany the surveyor during the review. Observations are discussed during the process and, when necessary, problem areas are reviewed in the context of the regulatory requirements. Deficiency statements focus on consumer outcomes. The licensing director also conducts a full day training course several times a year on the role of licensed nursing in assisted living facilities for nurses, operators and owners. The training covers use of the assessment, developing a services plan, managing medications and the nurse practice act. The state believes that the combination of regular visits, consistent application of the regulations, and a more collaborative oversight process and training have resulted in better compliance with the regulations and fewer complaints.

Several states reported organizing periodic trainings for facility staff or including articles in a newsletter about specific problems that surveyors find are occurring in a number of facilities. Others cited a conflict between oversight and consultation functions. One state indicated that facilities are responsible for resolving quality problems and the state provides consultants to assist them to do so. Other states clarify rules or statutes with facility staff during the survey or during exit interviews after the survey is completed. If the facility is able to correct the problem during the survey, no deficiency is issued. Utah allows new administrators to request assistance, and has procedures for the licensing agency to review survey forms with administrators, as well as previous reports and deficiencies. Pennsylvania provides guidance by disseminating information about best practices.

A few states indicated that they could not provide consultation and technical assistance due to staff shortages and the need to complete surveys.

In 2002, NASHP conducted a survey of licensing officials in all the states and asked them to rank ten areas by the frequency of deficiencies and complaints. Thirty-four states ranked the areas in the following order:

Medications (48 percent indicated that problems occurred frequently or very often)
Problems with staff quality and qualifications (41 percent indicated that problems occurred frequently or very often)
Sufficient staff (36 percent)
Records (32 percent)
Care plans (24 percent)
Inadequate care (21 percent)
Admission/discharge (15 percent)
Access to medical care (3 percent)
Abuse (3 percent)
Billing/charges (3 percent)

Fifty-eight percent of the states indicated that their penalty trends remained about the same in 2001 compared to 1999-2000; 34 percent reported that the number of penalties increased and 8 percent reported that they had declined. Eighty percent of the states felt their monitoring and enforcement systems were effective or very effective. The survey asked states to describe aspects of their process that were working well. A number of states identified the process of making follow-up v