State Assisted Living Policy: 1996 Executive Summary


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State Assisted Living Policy: 1996

Executive Summary

Robert L. Mollica and Kimberly Irvin Snow

National Academy for State Health Policy

November 1996

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 Research Triangle Institute. In addition to ASPE, other support for the study, A National Study of Assisted Living for the Frail Elderly, has been provided by the American Association of Retired Persons, the Alzheimer's Association and the National Institute on Aging. For additional information about the study, you may visit the DHHS home page at or contact the ASPE Project Officer, Pamela Doty, at DHHS/ASPE/DALTCP, H.H. Humphrey Building, Room 424E, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is:

This study reviewed the assisted living and board and care policies in each of the 50 states. Fifteen states have existing licensure regulations for assisted living facilities. Regulations are being developed by an additional nine states. Twenty two states reimburse, or plan to reimburse, assisted living as a Medicaid service including states that do not have a licensure category for assisted living. Six states provide Medicaid payments for services in board and care settings and thirteen states had created a task force or a process within a state agency to make recommendations for the development of assisted living rules.

While a common or standard definition of assisted living is 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.

Policies in fourteen 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.

During interviews, state policy makers talked about the limits of regulations to ensure safety and quality of care. Instead, assisted living approaches in many states reflect attempts to combine minimum standards with market forces to produce quality. In many states, new rules reflect a combination of market trends and the lobbying influence of organizations with a stake in the shape and direction of the rules. It is also clear that 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 expands, residents age in place and providers adjust to maintain high occupancy rates.

The three major issues addressed by state policies are the requirement for the living unit, tenant admission/retention criteria and the level of services. Existing or proposed policy in fourteen states would require apartment settings while twelve states allow both facilities with apartments and facilities with shared rooms to be licensed or reimbursed as assisted living. Shared rooms meet the minimum standards in four states.

New Jersey and Oregon have the broadest admission/retention criteria. New Jersey's rules require 20% of the residents in each facility meet the nursing home level of care criteria within three years of licensure. Two primary approaches have been used to set criteria. States typically either require that residents have stable medical conditions and do not need 24 hour skilled nursing care or the policy lists a series of conditions that residents may or may not have to be served. The services that facilities provide parallel the admission/retention criteria.

In creating a new model, either through licensure or Medicaid, states are supporting an alternative to nursing homes for elderly recipients who need personal care and routine, scheduled nursing services. States seek to provide these alternatives both in response to beneficiary demand for non-institutional care and because of the high cost of nursing home care. About 35% of Medicaid spending pays for long term care. In 1993, recipients who were disabled made up 5.5% of the caseload and 37% of spending. Elderly recipients accounted for 11.5% of total recipients and just under 32% of all spending. Expenditures per recipient averaged nearly $9300 of which $2365 was spent on acute services and $6907 paid for long term care. Just over $5800 of the long term care spending paid for care in a nursing home. While disabled recipients account for higher total spending, per capita spending was less than for aged recipients at $7900 with $4500 covering acute care and only $924 per recipient paid to nursing homes. These patterns highlight the importance of addressing long term care spending for elderly recipients and acute care spending for disabled recipients for states that are interested in affecting Medicaid spending.

Finally, states are refining their Medicaid reimbursement methodologies to pay for assisted living. Washington state has developed a methodology that reimburses for three levels of care with regional variations. Rate components were developed for nursing services, operations (including personal care and other service costs) and capital costs. Newly constructed facilities also receive a "capital add on." New Jersey and Texas have created rates that vary by type of setting. Other states have set flat rates but plan to refine their methodology and develop a tiered or case mix adjusted rate as they gain experience with the program. One state will reimburse assisted living facilities on a fee for service basis as providers of Medicaid home and community based services.

State Existing Regulations Statute Passed, Drafting Regulations 1 Medicaid Funding Studying Assisted Living Board and Care
AL X - - X -
AS X - X - -
AZ - - X - -
AR - - - - X
CA - - - X X
CO - - X2 - X
CT X - - - -
DE - - - X -
FL X - X - -
GA - - X2 - X
HI - X X4 - -
ID - - - X X
IL - - X3 X -
IN - - - X -
IA - X X4 - -
KN - X X4 - -
KY - X - - -
LA - X - - -
ME X X X - -
MD X X - - -
MA X - X - -
MI - - - - X
MN - - X - -
MS - - - - X
MO - - X2 - X
NE - - - X -
MT - - X2 - X
NV - - X2 - X
NH - - - - X
NJ X - X - -
NM - - X - -
NY - - X X -
NC X - X - -
ND - - X - -
OH - - X5 - -
OK - - - X -
OR X - X - -
PA - - - X X
RI X - - - -
SC - - - X X
SD X - X - -
TN - X - - X
TX - - X X -
UT X - - - -
VA X - X - -
VT - - X2 X X
WA - - X - -
WV - - - - X
WI - X X4 - -
WY X - - - -
  1. Or drafting regulations, legislation is not required.
  2. Medicaid covers services in board and care settings through a waiver or as a state plan service.
  3. Pilot projects authorized.
  4. Decision is pending or a proposal will be submitted to HCFA.
  5. A decision to submit a Medicaid waiver for assisted living has been postponed pending a study concerning the restructuring of Medicaid in Ohio.

State Status Model 1
Alabama Multiple categories are licensed based on size. The Department of Health held 2 meetings on assisted living to obtain suggestions for revisions. The State Health Coordinating Council is reviewing assisted living. Institutional model.
Alaska Statute passed in 1994. Regulations were effective in 1995. Services are reimbursed through a Medicaid HCBS waiver. Multiple settings.
Arizona Reimbursed as a Medicaid service through the ALTCS managed care program (1115 waiver). In 1996, legislation expanded the pilot program statewide. New housing and services model.
Arkansas Licenses residential care facilities. No assisted living activity. Board and care.
California A work group was formed in 1996 and the state's budget bill directed the Department of Health to submit a report in January 1997. Currently licenses residential care facilities for the elderly. Board and care.
Colorado Licenses personal care boarding homes and Medicaid reimbursement is available through an HCBS waiver. Board and care.
Connecticut Regulations were effective in December 1994. Licensure process implemented. Four facilities have been licensed. Service in apartment settings.
Delaware Task force is developing regulations which are expected to be issued in 1997. Legislation seeking Medicaid funding will be filed as part of the Division of Services for Aging and Adults with Physical Disabilities' budget. Multiple settings.
Florida Regulations issued in 1992. Legislative amendments were passed and new regulations issued in 1996. An HCBS waiver has been approved to serve 225 Medicaid recipients. Multiple settings.
Georgia Licenses personal care homes. Medicaid reimbursement is available through an HCBS waiver. No assisted living activity. Board and care.
Hawaii Legislation creating assisted living was passed 1995. Draft regulations were issued in November 1996 comment. New housing and services model.
Idaho A concept paper was developed by the Residential Care Council in 1995. Legislation passed revising residential care facility rules. Further action on assisted living is being reviewed by the state agencies. Board and care.
Illinois The Illinois affiliate of the American Association of Homes and Services of the Aging created a coalition to support assisted living. A bill was drafted and is expected to be filed in the 1997 session. The legislature approved a supportive living facilities demonstration program that will serve 7500 people over five years. Board and care.
Indiana The Aging department is heading task force which may file legislation for consideration in 1997. Board and care.
Iowa SF 454 was signed by the governor in May 1996. Draft rules will be prepared in 1996. Implementation is planned for 1997. New housing and services model.
Kansas Law was passed in 1995 defining assisted living. Regulations will be finalized in the fall of 1996. New housing and services model.
Kentucky Legislation was passed in 1996. New housing and services model.
Louisiana Draft regulations have been developed. Board and care.
Maine Legislation revising the assisted living categories was passed in 1996 and regulations are being drafted. Services are reimbursed through Medicaid. Multiple settings.
Maryland Legislation was passed in 1996 based on a task force report. Multiple settings.
Massachusetts Legislation creating an assisted living certification process was signed in January 1995. Regulations have been issued. Certification process created for settings meeting specified criteria. Financing for services (Medicaid) and housing (SSI) are available for purpose built and conventional elderly housing projects. 60 projects and 3,700 units have been certified. Multiple settings.
Michigan In 1995, the Department on Aging led a work group that recommended no further regulatory changes. In 1996, a new group will be created to re-evaluate the issue. Board and care.
Minnesota Assisted living has been implemented as a Medicaid service. Service in apartment settings.
Missouri No activity to create assisted living has been identified. Medicaid reimbursement is available for residential care facilities. Board and care.
Mississippi No activity. Board and care.
Montana Assisted living is covered in personal care facilities as a Medicaid waiver service. Board and care.
Nebraska The Department of Health has formed a task force to revise existing residential care facility rules and perhaps create a new licensure category with a higher level of care. Managed Long Term Care Work Group will also consider where assisted living fits in the continuum of care. Board and care.
New Hampshire No activity to create assisted living has been identified. Board and care.
Nevada Licenses residential care facilities for groups. No assisted living activity. Limited Medicaid reimbursement is available. Board and care.
New Jersey Regulations creating a new licensure category were implemented. Ten facilities have been licensed, 140 have been approved and in the pipeline and 35 applications are pending. Regulations developing as assisted living model in elderly housing have been issued. Multiple settings.
New Mexico Assisted living has been added as a Medicaid waiver service. Multiple settings.
New York Contracts with 63 projects and 3500 units have been approved. An RFP for 700 units in New York City was issued and final selections have been made. Multiple settings.
North Carolina Chapter 535 (1995) defines assisted living residence as a category of adult care homes. Regulations revising the adult care home model have been issued and registration requirements for assisted living in elderly housing sites have been issued. Personal care is covered in adult care homes through Medicaid. Multiple settings.
North Dakota Assisted living services are funded through the state's Medicaid waivers and two state funded service programs. Service model in apartment settings.
Ohio Legislation was passed in 1993. Regulations implementing the bill were postponed pending review by a special committee in 1994. Legislation passed in 1995 repealed the statute, and authorized funding for 1300 assisted living Medicaid waiver slots effective 7/96. New rules governing residential care facilities were effective September 1996 and a decision on submitting the Medicaid waiver has been delayed pending a study of the entire Medicaid program. Services model (waiver).
Oklahoma A task force has been created to develop assisted living recommendations. A draft bill has been circulated and is being revised by the task force. Service model.
Oregon Program rules operational. Supply continues to expand with 69 facilities and 3200 units licensed and 30 projects in the pipeline. New housing and services model.
Pennsylvania Personal care homes are licensed. The licensing agency and interest groups are considering renaming the category as assisted living while other groups support creating a separate category with a higher level of care. Board and care.
Rhode Island About 45 residential care and assisted living facilities are licensed. Newer buildings offer units with private bath. Institutional model.
South Carolina A task force has been formed. A report is expected in the fall, 1996. Board and care.
South Dakota Assisted living category exists in statute. Limited services allowed. Institutional model.
Tennessee Legislation creating assisted living was passed in 1996. A task force has been appointed to draft regulations. TBD
Texas Assisted living has been added to the Medicaid HCBS waiver. A task force was formed to develop regulations creating a new licensure category. The report made changes in the existing category but did not develop assisted living recommendations. Multiple settings.
Utah Program rules were approved in 1995. Rules governing the buildings were also approved by a state board. An amendment to the Medicaid HCBS waiver to cover assisted living is being considered. Multiple settings.
Vermont The 1997 budget allows transfer of the Medicaid equivalent of 46 beds for community care and assisted living. The Department of Aging and Disabilities has formed a work group to draft the assisted living component of the program. In addition the Department has implemented an enhanced residential care facilities program which provides $50/day for 70 residents who meet the nursing home level of care criteria. Board and care.
Virginia Regulations allowing assisted living services in adult care residences were effective in February 1996. Institutional model.
Washington Rules covering assisted living as a Medicaid waiver service were issued 6/96. The 1995 budget transferred funding for 1600 NF beds to assisted living and community options. Medicaid has contracted with 70 facilities and serves 750 waiver clients. New housing and service model.
West Virginia Licenses personal care homes. No assisted living activity. Board and care.
Wisconsin Legislation certifying assisted living facilities and providing funding for a Medicaid HCBS program was passed in 1995 as part of the governor's budget. Regulations are being reviewed by the legislature. A Medicaid waiver will be submitted when the rules are approved. Service model in purpose built apartment settings (waiver).
Wyoming Regulations upgrading board and care rules were issued. New rules allow skilled nursing and medication administration. Institutional model.
  1. The model category refers to states with existing or pending rules implementing an assisted living program. See page 9 for further discussion. Board and care refers to states with an existing generic category which are not developing assisted living or states working on assisted living whose model cannot yet be determined.

    Institutional model means a state that uses the term assisted living whose rules have more in common with board and care rules.

    The new housing and service model licenses or certifies facilities providing assisted living services in apartment settings.

    The service approach focuses on the provider of services which may be provided in multiple settings.

State Activity
Alabama Report from State Health Coordinating Council
California Report and draft legislation
Delaware Task force recommendations and legislative action
Hawaii Implementation of regulations, Medicaid waiver submission
Idaho Recommendations from state agencies
Illinois Implementation of pilot projects
Indiana Task force recommendations
Iowa New regulations
Kansas New regulations effective
Kentucky New regulations
Louisiana New regulations
Maine New regulations
Maryland New regulations
Nebraska Regulations from Health Department
New Jersey Possible new rate methodology
New Mexico Possible new rate methodology
Oklahoma Legislative action
Pennsylvania Recommendations for changes in regulations
South Carolina Task force recommendations
Tennessee New regulations
Vermont Task force recommendations and regulations
Wisconsin New regulations