State Residential Care and Assisted Living Policy: 2004. Overview of Policy Developments Since 2002

03/31/2005

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

Bar Chart: 1998-2000 -- Facilities (31%), Units (33%); 2000-2002 -- Facilities (3%), Units (13%); 2002-2004 -- Facilities (0%), Units (3%).

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.

State 2000 2002 2004
TABLE 1-1. Number of Medicaid Waiver Clients in Residential Settings (selected states)
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
  1. 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).
  2. Minnesota also serves 2,238 people in residential care through a state funded program.

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.

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.

State Activities Public Financing
TABLE 1-2. Summary of Activities in Residential Care Policy Since 2002
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

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