State Assisted Living Policy: 1998

State Assisted Living Policy: 1998

Executive Summary

Robert L. Mollica, Ed.D.

National Academy for State Health Policy

June 1998

This report was prepared under contracts #HHS-100-94-0024 and #HHS-100-98-0013 between the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Office of Disability, Aging, and Long-Term Care Policy (ASPE) and the Research Triangle Institute. Additional funding was provided by American Association of Retired Persons, the Administration on Aging, the National Institute on Aging, and the Alzheimer's Association. For additional information about this subject, you can visit the DALTCP home page at http://aspe.hhs.gov/_/office_specific/daltcp.cfm or contact the ASPE Project Officer, Gavin Kennedy, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C. 20201. His e-mail address is: Gavin.Kennedy@hhs.gov.

The opinions and views expressed in this report are those of the authors. They do not necessarily reflect the views of the Department of Health and Human Services, the contractor or any other funding organization.

This study reviewed the assisted living and board-and-care policies in each of the 50 states. States reported a total of 28,131 licensed facilities with 612,063 units or beds.¹ Over 25% of the beds are located in three states: California (123,238), Florida (66,293), and Pennsylvania (62,241). Twenty-two states have existing licensing regulations using the term assisted living, up from 15 in the previous study. Wisconsin has re-named their assisted living regulations as residential-care apartment complexes. Draft regulations using the term assisted living have been developed by an additional nine states including Maryland which is significantly expanding the scope of an earlier program which a state agency considered assisted living. Four states are revising existing assisted living regulations; one state, West Virginia, is developing rules for a new category and New Hampshire will revise rules which sunset in 1998.

Thirty-five states reimburse, or plan to reimburse, services in assisted living or board-and-care facilities as a Medicaid service. Eleven states had created a task force or a process within a state agency to make recommendations for developing assisted living rules.

While a common or standard definition of assisted living is still unlikely, state approaches share some common components. This new model for providing long-term care is developing as a residential, rather than institutional, model. While many observers equate institutional with medical, the distinction between medical and social lies less with the services delivered than the setting itself. State rules generally require residential settings in which personal care and health related services are provided. Even though the setting is residential, health or medical services are provided, either by facility staff or through contracts with community agencies.

The major issues addressed by state policies concern requirements for the living unit, for tenant admission/retention, for the level of services allowed, and for administrator and staff training.

Living Unit: Existing or proposed policy--regulations or Medicaid standards--in thirteen states would require apartment settings, while fourteen states allow facilities with apartments and facilities with shared rooms to be licensed or reimbursed as assisted living. In seven states with assisted living rules, shared bedrooms meet the minimum standards. Sixteen states with boardand-care standards allow shared rooms. Licensing standards in Arizona, Minnesota, North Dakota, and Washington allow shared rooms, although facilities contracting with Medicaid must offer apartments.

Admission/Retention: These standards can be grouped into five categories: general, health conditions, functional capacity, Alzheimer's disease and dementia, and behavior. Recent rules in Kansas, Nebraska and Maine and draft rules in Arizona, Hawaii and Vermont will join Oregon and New Jersey as states with the broadest parameters for admission/retention. These states allow extensive services to be provided, sometimes with a review by the licensing agency for certain conditions. State regulations set the parameters for assisted living, while owners/operators define the practice. Despite regulations that may allow a higher level of care, facilities themselves may set their admission/retention policy to care for less impaired residents than the rules allow and provide a less intensive service package than allowed. Though strong market demand from moderate- and upper-income residents for residential settings supports this practice, changes are likely over time as the number of facilities expand, residents age in place, and providers adjust to maintain high occupancy rates.

New Jersey's rules require 20% of the residents in each facility to meet the nursing home level of care criteria within three years of licensing.

Policies in 22 states include a statement of philosophy that describes assisted living as a model which emphasizes consumer or resident independence, autonomy, dignity, privacy, and decision-making.

Level of service: Increasingly, state rules allow higher levels of care, sometimes equivalent to the care a person receives in their single-family home or apartment. While a few states require that health related services be delivered by a licensed home health agency, many allow assisted living facilities to hire nursing professionals to provide, supervise, or direct care.

Administrator credentials/training: Compared to board-and-care rules, assisted living regulations are more likely to require higher credentials and often training in the philosophy of assisted living. Criminal background checks of administrators and staff are being required to respond to concerns for safety and quality care for residents.

Staff training: These requirements vary extensively. Resident rights is the most frequently cited area for required training. Many states are now adding requirements that staff in facilities serving people with Alzheimer's disease receive special training to respond to their unique needs.

Public subsidies: The booming assisted living market has raised questions about its relevance for older persons with low incomes. By the spring of 1998, 28 states covered services in assisted living and/or board-and-care settings, and nine states were planning to add coverage during the year. There are two primary options for covering services under Medicaid: state plan services and home and community waiver programs. Six states use the Medicaid state plan, and 23 states use the waiver. (Maine covers services under both options and is therefore counted twice).

Although Medicaid coverage is widespread and growing, the number of participants is just over 40,000 beneficiaries, roughly half of whom are in North Carolina. States using personal care under the state plan to cover care have higher participation than states using the waiver. Factors affecting waiver participation may include the higher level of impairment required, the assessment and screening process, lack of familiarity with assisted living among waiver case managers, and the ceiling on waiver expenditures.

Five approaches are used to pay for services in assisted living settings: flat rates, flat rates that vary by the type of setting, tiered rates, case-mix related rates, and care plan or fee for service rates. Flat monthly rates are the most prevalent.

Twenty-six states have special provisions for facilities serving people with Alzheimer's disease. These provisions cover disclosure, admission/retention, staffing and training, activities, and the environment.

This paper describes the primary approaches states are taking to license assisted living, discusses Medicaid reimbursement and other selected areas, and summarizes each state's licensing rules.