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.
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.
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.
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.
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.
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
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.
BOX 1-2. Examples of Definitions of Assisted Living
Assisted Living Workgroup*
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."**
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.
* The ALW final report and recommendations may be found at http://www.aahsa.org/alw.htm.
** Joint Commission on Accreditation of Healthcare Organizations. 2003-2005 Accreditation Manual for Assisted Living.
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.5
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).6 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;7 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.
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.
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).8 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.9 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.10
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.11
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.12
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.
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.
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. 3 provides information about each state's nursing home level-of-care criteria.13 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.
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.14
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 visits when survey findings/complaints indicated areas of concern. Several states noted that having a range of remedies available to act on survey findings was effective as well as making unannounced visits. Progressive enforcement based on the facility's history and response was also cited as an effective strategy.
One state indicated that counties are involved in monitoring Medicaid waiver participants and that service negotiations helped clarify service contracts. Another said that using state nurse consultants and specialty staff, such as pharmacists and dieticians, to monitor facilities with serious or numerous problems was effective.
Other quality assurance strategies cited include providing technical assistance and follow-up; acting within 10 days on complaints; having clear lines of communication for and definition of duties for survey staff; developing clear enforcement procedures that are well understood by staff; meeting with providers to discuss issues; providing training; conducting follow-up visits; and maintaining a consumer perspective that focuses on improving care not just punishing past failures. States described a number of quality initiatives underway including:
- Furnishing provider training;
- Implementing new training requirements for medication aides;
- Revising the survey process;
- Developing a more formalized consultation program;
- Providing more technical assistance;
- Conducting forums for providers to discuss quality issues; and
- Implementing quality assurance and quality improvement regulations.
Other strategies focused on revising standards for assessment, training, and level of care, including:
- Working with providers to develop minimal standards for assessments, service plans, negotiated risk agreements, and disclosure requirements;
- Adding disclosure requirements for dementia care providers;
- Increasing the licensing authority for staffing, training, disclosure, and Alzheimer's care;
- Working to increase staff training requirements;
- Working to establish specific staffing requirements for special care units;
- Conducting regulatory reviews to bring provisions up to national standards; and
- Increasing requirements for a comprehensive resident assessment.
Over half the states reported that the number of staff available for survey and monitoring was not keeping pace with the growth in the supply of facilities.
As facilities are allowed to serve residents with greater needs, regulators have cited medication administration and assistance with self-medication as a major concern. A study cited in a literature review on medication use in assisted living found that residents were prescribed an average of 4.6 medications per month; 37 percent took four to seven medications a month; and 11 percent took eight or more.15 Comparing prescriptions to the "Beers List," the study found that 25 percent of the residents had inappropriate medication orders.16 Another study found that 11 percent of residents were taking two or more psychotropic medications and 70 percent were taking psychotropic agents without receiving mental health services. The literature review found that there was substantial use of medications considered inappropriate for use by elders; widespread use of psychotropic medications; under-treatment of depression; and use of medications with undocumented diagnosis or reason for use.
States were asked to indicate how often problems with medications were reported or identified during survey activity. Eighty-two percent of the responding states said the incidence of medication problems has remained the same since 2002, 12 percent reported a decline in medication problems, and 6 percent report an increase in problems with medications. However, while most states reported that the incidence of medication problems remained the same as in 2002, the number of states reporting that problems occurred frequently or very often rose significantly. For example, 61 percent of the 46 states and the District of Columbia reported that problems with medications occurred frequently or very often (up from 51 percent in 2002). Twenty-three percent responded that this was a problem sometimes, and 18 percent responded rarely or occasionally.17 Other reported problem areas included pharmacy and physician medication errors.
Several states noted that its licensing agency is paying more attention to medication issues as the acuity level increases and more residents are taking increasing numbers of medications. States that did not previously track the prevalence of medication issues are now doing so.
The 2002 study asked whether states allowed trained aides to administer medications or to assist with self-administration of medications. Of the responding states, 98 percent allow trained aides to assist with self-administration, and 63 percent allow aides who have completed and passed a training program to administer medications. Thirteen percent of responding states require facilities to have a consulting pharmacist. Several states require record reviews of medications by a RN.
States are addressing problems with medication administration by offering additional training, enacting changes to nurse delegation provisions, and tracking medication issues on survey reports. A few states indicated that problems with medication administration are consistently among the top eight or ten deficiencies and a few reported it was the most frequently cited deficiency. On the other hand, states reported that deficiencies and problems dropped after the licensing agency offered more training on medication administration to administrators, supervisory and direct care staff.
Staff training requirements are a key component of quality assurance. A national study found that the types of required staff training and orientation varied across facilities, but for the most part, relatively little training was required.18 Three-quarters of unlicensed personnel were required to attend some type of pre-service training or orientation, most commonly lasting between 1 and 16 hours. Only 11 percent of the staff who received required training completed it prior to the start of work; the remainder received on-the-job training or a combination of pre-service and on-the-job training. In contrast, nursing homes aides are required to have a minimum of 75 hours of training (10 days) and to pass an exam before they can work on a unit providing direct resident care.
Staff reported receiving training on--or an orientation to the philosophy of assisted living and how that philosophy differs from traditional nursing home care and other residential care settings. However, the study found the staff were not well informed about normal aging and care for persons with dementia.
States regulations specify initial and ongoing training requirements for staff and administrators but the level of specificity in the training requirements varies considerably. Some states specify only general requirements, while others specify topics to be covered, the number of training hours required, the completion of approved courses, or some combination thereof.
At the national level, stakeholders involved in the ALW implemented its recommendation to establish a Center for Excellence in Assisted Living (CEAL).19 The CEAL's mission is to "foster access to high quality assisted living by creating resources and acting as an objective resource center to facilitate quality improvement in assisted living; increasing the availability of research on quality in assisted living; providing a national clearinghouse for information on assisted living; building upon the work of the Assisted Living Workgroup; promoting availability of and innovation for high quality affordable assisted living; and providing information, tools, and technical expertise to facilitate the development and operations of high quality affordable assisted living programs to serve low and moderate-income individuals."
The CEAL will provide reports on quality using objective measures and data, disseminate information, promote research, identify and describe effective practices and provide technical assistance to states on policy, programs, effective practices, the integration of outcome measures, and the ALW recommendations into state policies and programs.
Lack of Information About Residential Care Facilities for Consumers
The 2004 GAO report cited earlier found that consumers faced with choosing an assisted living facility often do not have key information they need in order to identify the one most likely to meet their individual needs. Such information includes staffing levels and qualifications, costs and potential cost increases, and the circumstances that could lead to involuntary discharge from the facility.
The report described initiatives in Florida and Texas that have made critical data to aid consumer selection more readily available. Florida created a Web site that provides information about facilities by geographic area and identifies those providing the services the consumers are seeking at a specified price range. Texas has mandated a standardized disclosure statement for assisted living facilities, giving consumers concise and consistent data that facilitates comparisons across providers regarding services, charges, and policies.
Many states help consumers compare assisted living facilities by publishing brochures, consumer guides, and by providing information on Web sites. The following list offer examples of Web sites that have been developed by states, provider associations, and consumer groups. Many other states have Web sites, which the reader can find by conducting standard searches.
Provisions for Residents with Alzheimer's Disease and Dementia
Forty-four states have specific regulatory provisions for facilities serving people with Alzheimer's disease and other dementias, an increase from 36 in 2002 and 28 in 2000. Examples of state activities regarding dementia care and the regulations for facilities serving residents with dementia follow.
Rhode Island requires a license for dementia care when one or more resident's dementia symptoms affect their ability to function as demonstrated by behaviors that adversely impact the rights of others; elopement; or an inability to self-preserve. Facilities that advertise or represent special dementia services or that segregates residents with dementia also need a license for dementia care. In addition to basic license requirements dementia care licenses require staff training specific to dementia care; a RN on staff and available for consultation at all times; and a secure environment appropriate for the resident population.
Pennsylvania has drafted rules that contain provisions for securing units and providing adequate indoor and outdoor wandering space. They also specify competency-based training requirements for administrators and staff covering mandated topics such as the definition and diagnosis of dementia, differences between dementia, delirium, and depression, managing behavioral symptoms, and working with family members.
Montana created a new licensure category for facilities that serve residents who are not capable of expressing their needs or making basic decisions. Requirements include staffing provisions; general staff education, training, and experience requirements; dementia specific annual continuing education requirement, including the teaching of skills necessary to care for, intervene and direct residents who are unable to perform ADLs; and techniques for minimizing challenging behavior. Other requirements apply to locked units or distinct parts of facilities.
Washington revised its regulations to require staff with experience and training in dementia care to coordinate outside services, offer monthly educational and family support meetings, and advocate for residents. Staff training requirements include a minimum of 30 hours on care for residents with dementia; nature, stages, and treatment of the disease; therapeutic interventions; communication techniques; medication management; therapeutic environmental modifications; assessment and care planning; the role of family and their need for support; staff burn-out prevention; and abuse prevention. Eight hours of continuing training is required annually.
Staff must be able to provide 2.25 hours of direct care per resident per day. At least two staff must be present for units serving more than five residents. An RN must be available if residents require nursing procedures. The rules describe special requirements for the physical environment with security measures, including secured outdoor spaces.
Licensed facilities that do not market themselves special care units but serve residents with early symptoms of dementia must provide staff training on dementia care, including strategies to help residents manage their behaviors.
Medicaid Coverage Options
States have several options for using Medicaid to fund services in residential care settings (see Table 1-8): the Medicaid state plan, HCBS waivers (also called 1915(c) waivers), Section 1115 demonstration programs, and 1915(b) managed care initiatives. States most often use the HCBS waiver. See Table 1-9 for the sources of funding each state uses to pay for services in residential care settings.
- 36 states have CMS approval to cover services under a 1915(c) waiver;
- 14 states use the Medicaid state plan;
- 10 states use solely state-funded long-term care programs;
- 8 states use both Medicaid waivers and the state plan;
- 3 states use all three sources;
- Arizona uses a managed care program authority under an 1115 waiver; and
- Utah uses a 1915(a) state plan amendment managed care authority.
Congress authorized HCBS waivers in 1981 under Section 1915(c) of the Social Security Act. Under this provision, states may apply to the U.S. Department of Health and Human Services for a waiver of certain federal requirements to allow states to provide home and community services to individuals who would otherwise require services in an institution.
Under the HCBS waiver authority, states can provide services that are not covered by a state's Medicaid program, such as personal care not covered by the state plan, home delivered meals, adult day care, personal emergency response systems, respite care, environmental accessibility adaptations, and other services that are required to keep a person from being institutionalized. The waiver authority also allows states to provide waiver participants a greater amount, duration, and scope of services than are provided under the state plan.
The waiver authority also allows states to limit services to specific counties or regions of a state and to target services to certain groups--strategies that are not normally allowed under Medicaid. State Medicaid agencies must ensure that waiver programs have provisions to assure the health and welfare of participants. In addition, states must establish in advance how many people they will serve during the course of a year. Thus, in contrast to the regular Medicaid program, states may establish waiting lists for waiver programs.
Finally, average expenditures for waiver beneficiaries must be the same or less than they would have been without the waiver (no more than average Medicaid nursing home costs).25 Importantly, while services may be covered in residential care facilities, room and board may not. Medicaid can cover room and board only in institutions, such as nursing homes, ICFs-MR, and hospitals.
From the inception of the waiver program, states have used waivers to pay for services in residential care settings as an alternative to ICFs-MR. In 1981, Oregon became the first state to use the waiver program to fund services in residential care settings for elderly persons, but few states followed suit until the 1990s.
CMS has streamlined the waiver process, allowing applicants to fill in a pre-printed application form by checking off essential aspects of its proposal. On the waiver application form, CMS defines assisted living as:
"Personal care and services, homemaker, chore, attendant care, companion services, medication oversight (to the extent permitted under State law), therapeutic social and recreational programming, provided in a home-like environment in a licensed (where applicable) community care facility, in conjunction with residing in the facility. This service includes 24 hour on-site response staff to meet scheduled or unpredictable needs in a way that promotes maximum dignity and independence, and to provide supervision, safety and security. Other individuals or agencies may also furnish care directly, or under arrangement with the community care facility, but the care provided by these other entities supplements that provided by the community care facility and does not supplant it.
"Personalized care is furnished to individuals who reside in their own living units (which may include dually occupied units when both occupants consent to the arrangement) which may or may not include kitchenette and/or living rooms and which contain bedrooms and toilet facilities. The consumer has a right to privacy. Living units may be locked at the discretion of the consumer, except when a physician or mental health professional has certified in writing that the consumer is sufficiently cognitively impaired as to be a danger to self or others if given the opportunity to lock the door. (This requirement does not apply where it conflicts with fire code.) Each living unit is separate and distinct from each other. The facility must have a central dining room, living room or parlor, and common activity center(s) (which may also serve as living rooms or dining rooms). The consumer retains the right to assume risk, tempered only by the individual's ability to assume responsibility for that risk. Care must be furnished in a way which fosters the independence of each consumer to facilitate aging in place. Routines of care provision and service delivery must be consumer-driven to the maximum extent possible, and treat each person with dignity and respect.
"However, nursing and skilled therapy services (except periodic nursing evaluations if specified above) are incidental, rather than integral to the provision of assisted living services. Payment will not be made for 24-hour skilled care or supervision. Federal financial participation is not available for the cost of room and board furnished in conjunction with residing in an assisted living facility."
States that want to provide waiver services in residential care settings do not have to conform their programs to the CMS definition, but may submit different definitions of assisted living in their application, which are subject to CMS approval. States may also choose to provide waiver services in congregate housing even if the waiver does not specifically cover a service category called "assisted living."
Limitations of Using Waiver Programs to Cover Services in Residential Care and How States Have Addressed Them
A major challenge facing policymakers who support a comprehensive range of home and community services is finding the resources to expand their availability. Waiver services are not an entitlement and most waiver programs operate with a specific appropriation based on a number of budgeted "slots." Although states may cover services in residential care settings through a waiver program, limited slots may lead to a waiting list for services. On the other hand, nursing home care is an entitlement, and its budget is likely to rise each year through rate increases. In the event of a budget deficit, non-entitlement services are the most vulnerable to budget cuts. States are addressing this issue in several ways.
Colorado, Oregon and Washington have shifted resources from institutions to home and community services by creating a single appropriation for long-term care services, sometimes called "pooled funding" or "unified funding."
Arizona, Florida, Massachusetts, Minnesota, New York, Texas, Utah, Wisconsin and states with PACE programs have capitated funding for long-term care services, which gives contracting organizations the flexibility to approve the most appropriate service for beneficiaries.
Kansas, Maryland, and Texas have adopted a "Money Follows The Person" policy, which allows funding appropriated for nursing homes to be spent on home and community services for individuals who relocate from a nursing home. Texas has a one year waiting list for waiver services. Since they adopted this policy in 2001, the state has relocated 3,400 people from nursing homes to community settings. Twenty-six percent moved to their own home; 37 percent moved in with family members; and 32 percent moved to a residential care setting.
Illinois uses funds from its nursing home appropriation in a demonstration waiver program that provides services for residents of Supportive Living Facilities (SLFs). The program was built on the premise that about 10 percent of nursing home residents could be served in residential care settings with access to supportive services 24 hours a day. Because the program is funded from the nursing home budget rather than the waiver budget, the state is able fund all approved SLF slots and there is no waiting list. Although the waiver was approved to serve 5,000 participants, in November 2001, the state placed a moratorium on new SLFs due to budget difficulties, which is still in effect.
Vermont enacted a law in 1996 allowing the Department of Aging and Disabilities to shift funding for 234 nursing home beds over 4 years to fund home and community services. It has allowed the Department to increase HCBS waiver slots for in-home and residential care settings, with priority for people at immediate risk of nursing home placement. Funds redirected but not spent remain available for home and community services in subsequent years. During the first 3 years of the program, 200 nursing home beds were taken off-line. Since enactment, spending on home and community services rose from 11.6 percent of total long-term care spending to 31 percent in 2002.
All of these financing strategies give states a mechanism to assure that people who can be served in the community are not required to stay in nursing homes because of a waiting list for waiver services.
Enabling Medicaid Beneficiaries to Pay for Room and Board
Medicaid beneficiaries with limited income may not be able to pay residential care facilities' room and board rates. As noted earlier, Medicaid pays for room and board only in institutions, except in limited circumstances such as respite care and meals that are served as part of a day care program (§441.360(b)). For Medicaid purposes, room and board comprises real estate costs (debt service, maintenance, utilities, and taxes) and raw food. The costs of preparing, serving and cleaning up after meals can be covered as a waiver service.
Although Medicaid beneficiaries are responsible for room and board costs, states have a range of options to make them affordable.
- Limit the amount facilities can charge Medicaid clients for room and board to the federal SSI benefit, which in 2004 is $564 minus a small personal needs allowance;
- Provide a state supplement to the SSI payment for persons living in residential care settings, and limit the amount that can be charged to the combined SSI plus state supplement payment;
- Use the 300 Percent of SSI Income Standard for waiver eligibility and set the maintenance allowance at a level that allows residents to retain sufficient income to pay for room and board;
- Provide housing subsidies for low-income persons;
- Allow family supplementation to increase the funds available for room and board, particularly to pay the difference in cost between a shared and a private room; and
- Use the federal Food Stamp Program, when possible, to reduce board costs.
Each of these options is discussed below.
The use of food stamps to pay for meals subsidizes the board component of the room and board cost, making it more affordable for Medicaid beneficiaries and others with low incomes. USDA regulations allow meals provided in certain group living arrangements to elderly, blind, or disabled residents to be supported by food stamps (7 CFR §271.2). Group living arrangements are defined as a public or non-profit residential setting that serves no more than 16 residents. Facilities that can participate as food stamp vendors receive stamps from beneficiaries, which are used as payment toward meal costs.
Wisconsin officials are working with USDA to allow Residential Care Apartment Complexes to become approved food stamp vendors for eligible residents. SLFs in Illinois and Community-Based Residential Care Facilities in Wisconsin have been approved as food stamp vendors. Massachusetts continues to explore this option with USDA. SLFs in Illinois that participate in the program receive about $97 a month for eligible beneficiaries.
One final approach states can use to make room and board costs more affordable is to examine the facility's monthly room and board charges to identify any coverable services--such as laundry assistance, light housekeeping, or food preparation--that Medicaid can reimburse for beneficiaries who require assistance with these IADLs. Including all coverable services in the state's assisted living service payment reduces the beneficiary's monthly payment solely to room and board and any other charges that Medicaid does not cover.
Effect of Medically Needy Rules on the Ability to Pay for Room and Board (34)
States have the option of covering medically needy beneficiaries under their Medicaid programs. The medically needy are persons who, except for income, would qualify in one of the other Medicaid eligibility categories (such as being over age 65 or meeting SSI disability criteria). Medicaid payments can begin for this group once they have "spent down"--that is, incurred expenses for medical care in an amount at least equal to the amount by which their income exceeds the medically needy income level. Any family supplementation is considered part of the excess income that must be spent down.
The medically needy eligibility option can allow people who have income greater than 300 percent of SSI to become eligible for Medicaid services. But federal law imposes two significant constraints on the use of this option:
The state must cover medically needy children and pregnant women before it can elect to cover any other medically needy group. Additionally, the state may not place limits on who is eligible for Medicaid by using such characteristics as diagnosis or place of residence. Thus, it cannot use medically needy policies to extend Medicaid services only to HCBS waiver beneficiaries in residential care settings.
The maximum income eligibility limit that a state medically needy program may use is based upon its welfare program for families--levels that are typically lower than SSI. The income level must be the same for all medically needy groups in the state (i.e., states are not permitted to establish higher income eligibility levels for selected subsets of the medically needy, such as beneficiaries in residential care settings).
These rules have several implications that states need to consider when trying to make the medically needy eligibility option work for higher income individuals in residential care settings. First, these individuals may find it more difficult to incur sufficient medical expenses to meet the spend-down requirements while living in the community than they would in a nursing home. The higher their "excess" income, the higher the amount of their spend-down--which means only beneficiaries with extremely high medical expenses may qualify. Second, community providers are less willing to deliver services during the spend-down period, since payment cannot be guaranteed and collection may be difficult. Third, spend-down rules combined with low medically needy income-eligibility levels mean that individuals may not have enough total income to pay both the bills they incur under the spend-down provision and room and board.
In sum, room and board costs may present a barrier to residential care living for Medicaid beneficiaries unless states take specific steps to make them affordable. Several observers have suggested that the Medicaid program be allowed to pay for room and board in residential care settings as it does in nursing homes, a policy change that would require Congressional approval. However, such a change would likely lead the SSI program to classify residential care as an institution, regardless of how states license it, and SSI pays only a personal needs allowance of $30 to individuals who reside in institutions. Because such a change would shift costs from the federal SSI program to state Medicaid programs, it is highly unlikely.
Medicaid Policy Issues for Housing Investors, Developers, and Operators
The growth of assisted living has sparked interest in developing or expanding assisted living for elderly persons with low-incomes. However, facilities may be reluctant to participate in the Medicaid program if they are unsure they will have a reliable source of potential residents and payments. Housing providers and lenders need to project revenues to determine the feasibility of each project. The rent-up period and a stable occupancy rate help them determine cash flow. Public agencies that provide subsidies to developers to build affordable assisted living need assurances that there will be a stable source of funding for residents' service needs. Consequently, in addition to being knowledgeable about the Medicaid program generally, assisted living investors, developers, owners, and operators need to be aware of several Medicaid policy and program issues.
State Approaches to Reimbursing Services
The extent to which low-income older people have access to residential care settings as an alternative to nursing homes depends in large part on the extent to which states use Medicaid to cover services in these settings and providers' views on the adequacy of Medicaid's service reimbursement rates. In addition to the amount of the payment, the reimbursement approach can also serve as incentives or disincentives for providers.
Data suggest that states have increased their payments over the past 4 years, although they are still quite low relative to private-pay rates, and may not cover residents' needs. However, key informants suggest that providers' willingness to accept Medicaid rates is increasingly driven by an over-supply of facilities and difficulty finding private-pay residents.
States face a number of major challenges in developing Medicaid payment methodologies for residential care services, including: (1) defining and distinguishing types of services, (2) collecting data on which to base payments while avoiding complex and burdensome new data collection requirements, (3) developing rates that support quality care and aging-in-place, and (4) providing reimbursement that is sufficient to assure provider participation within state budget constraints.
States use five primary approaches to set rates for Medicaid services provided in residential care settings:
- Flat rates;
- Flat rates that vary by type of setting;
- Tiered rates;
- Case-mix rate; and
- Cost-based reimbursement and fee-for-service rates.
Table 1-13 lists the states that use Medicaid to cover services in residential care settings according to their rate-setting approach. Descriptions of each states' reimbursement approach and rates can be found in Section 3 under the heading public financing.
Expanding the Supply of Assisted Living for Low-Income Individuals
Both federal and state governments recognize that, in order to reduce costly institutionalization, a range of supportive housing and service options is needed. An increasing number of persons 65 and older who can no longer live independently view assisted living as a preferred alternative to nursing home care, or as a means to forestall admission to a nursing home. But market rate assisted living that provides private rooms and a high level of services is generally far beyond the means of most low-income elderly persons.
There are several sources of funding available to finance the development or renovation of housing to create affordable assisted living. The Federal Government's main vehicle for creating affordable housing is the low-income housing tax credit program. Other sources of funding are programs in HUD and USDA, and state programs. These departments provide funds to both finance new housing units and provide rental assistance in existing housing. However, not all programs that create and/or support affordable housing can be used for affordable assisted living.
Developing affordable assisted living is a complex undertaking. Different statutory authorities and administrative structures, and a lack of communication among those who manage housing and service programs, present major difficulties. A major issue for some housing subsidy programs is that the lenders and investors they depend on require evidence of a stable revenue source over the life of their commitment to protect their investment--typically 15 to 30 years. But state service programs may be unable to provide a table revenue source because they are subject to annual appropriations that depend on the state's budget.
Additionally, despite targeting the same or similar populations, housing and service programs often have different and often conflicting income, age, and functional eligibility rules that make it difficult to create the supportive housing plus services arrangements that frail elderly persons need. Medicaid program requirements can also pose barriers to the receipt of services in residential care settings. Medicaid's rules regarding financial eligibility and post-eligibility treatment of income may limit an individual's ability to pay for room and board.
Housing programs also have conflicting requirements. Yet, successful projects often need to combine funding from multiple housing finance programs (e.g., low-income housing tax credits, HUD's HOME program, the Federal Home Loan Bank's Affordable Housing Program, conventional debt, and Housing Choice Vouchers), with two or more service subsidy programs (e.g., Medicaid state plan or waiver programs, state supplements to the SSI program, state funded service programs).37
At the state level, some agencies that manage Medicaid waiver programs have begun working with state and local housing agencies, and non-profit housing organizations to explore ways to combine housing subsidies with Medicaid services. At the federal level, HUD and the U.S. Department of Health and Human Services are currently looking at ways in which the agencies can work together to expand housing and service choices for people with disabilities.
The data were reported by state licensing agencies. Partial information was reported for some categories in Delaware, Kentucky, Minnesota, New Jersey, New York, New Mexico and West Virginia. (See Table 2-1 in Section 2 for each state's information.) While these numbers do not include facilities licensed by state Mental Retardation/Developmental Disabilities (MR/DD) agencies, some individuals with MR/DD may be living in facilities licensed as residential care/assisted living.
The number of residents receiving Medicaid in residential care settings is slightly underreported because it does not include data from Kansas. Kansas' reporting system does not differentiate between waiver clients served in their own homes and those served in residential care settings. Additionally, Alabama and the District of Columbia have not yet implemented approved 1915(c) waivers.
The six states were Florida, Minnesota, Oregon, North Carolina, Texas, and Wisconsin. Oregon is the only state of the six that requires assisted living providers to offer private apartments. (See Janet O'Keeffe, Christine O'Keeffe, and Shula Bernard. Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Report prepared for the U.S. Department of Health and Human Services, Office of Disability, Aging, and Long-Term Care Policy. [http://aspe.hhs.gov/daltcp/reports/med4rcs.htm])
42 U.S.C. 1396r.
Wendy Fearnside, Program and Planning Analyst, Bureau of Aging and Long Term Care Resources, Wisconsin Department of Health and Family Services.
Catherine Hawes, Ph.D. and Charles D. Phillips, Ph.D., M.P.H. A National Study of Assisted Living for the Frail Elderly: Final Summary Report. Texas A&M University System Health Science Center. US DHHS, Office of the Assistant Secretary for Planning and Evaluation, contract number HHS-100-94-0024 and HHS-100-98-0013. November 2000. [http://aspe.hhs.gov/daltcp/reports/finales.htm]
Oregon defines a "unit" as an individual living space constructed as a completely private apartment, including living and sleeping space, kitchen area, bathroom and adequate storage areas.
Ruth Gulyas. The Not-for-Profit Assisted Living Industry: 1997 Profile. American Association of Homes and Services for the Aging. Washington DC. 1997. Also, 2000 Overview of the Assisted Living Industry. The Assisted Living Federation of America and Coopers and Lybrand. Washington, DC. 2000.
Ronald K. Tinsely, Robert G. Kramer, et al. Overview of the Assisted Living Industry. Assisted Living Federation of America. Fairfax, VA. 2000.
Hawes et al., op. cit.
National Survey of Assisted Living Residents: Who Is The Customer? National Investment Conference and the Assisted Living Federation of America. Washington, DC. 1998.
"Assisted Living: Quality of Care and Consumer Protection Issues." GAO. T HEHS-99-111. April 26, 1999.
Some state summaries do not include this information because it was not readily available.
_____. Assisted Living: Examples of State Efforts to Implement Consumer Protections. U.S. General Accounting Office. GAO-04-684. Washington, DC. April 2004.
Thomas Clark, Director of Professional Affairs for the American Society of Consulting Pharmacists Medication Use and Pharmacist Impact in Assisted Living Facilities, located at http://www.ascp.com/public/pr/assisted/2003/rximpact.pdf.
The Beer's List identifies medications to avoid or use within specified dose and duration ranges for elderly persons, and medications to avoid in elderly persons with specific diseases.
Due to rounding, the percentages add to 102.
Catherine Hawes, Ph.D., et al. op.cit.
The Board of Directors comprises representatives from four consumer or advocacy groups (AARP, Paralyzed Veterans of America, Alzheimer's Association, Consumer Consortium on Assisted Living); four provider associations (American Association of Homes and Services for the Aging, Assisted Living Federation of America, American Seniors Housing Association and National Center for Assisted Living); and three representatives from professional organizations or associations (National Cooperative Bank Development Corporation, the Pioneer Network, America Assisted Living Nurses Association).
Medicaid spending for services delivered in residential care settings is not reported separately.
Data provided by Brian Burwell, The MEDSTAT Group. Memorandum, 2004.
Jones, A. "The National Nursing Home Survey: 1999." National Center for Health Statistics. Vital Statistics 13(15) 2002.
Rhoades, Jeffrey A. and Krauss, Nancy A. Nursing Home Trends, 1987-1996. Rockville, MD: Agency for Health Care Policy and Research; 1999. MEPS Chartbook No. 3. AHCPR Pub. No. 99-0032.
American Health Care Association. Based on CMS-OSCAR form 671:F41-F43. 2003.
States can use either a fixed per capita amount for each beneficiary or they can average expenditures across waiver beneficiaries. The latter method provides more flexibility because it allows some beneficiaries to exceed the nursing facility cost as long as costs for others in the program are lower and the average waiver cost does not exceed the average nursing facility cost. States have the option of setting a cap on waiver services at a percentage of nursing home costs (e.g., 80 percent).
Except in 209(b) states which have a Medicaid income eligibility threshold that is lower than the federal SSI payment.
Capitated programs have more flexibility to pay for room and board costs than is allowed under standard Medicaid rules).
Many states have a state supplement for residential care settings that may be too low to cover more intense services needs and higher capital costs in some residential care settings.
Stone. J.L. (2002). Medicaid: Eligibility for the Aged and Disabled. Congressional Research Service. Report prepared for Members and Committees of Congress.
For further information, see: "A Technical Assistance Guide for Housing Resources and Strategies," prepared by the Technical Assistance Collaborative Inc. for the Rutgers Center for State Health Policy Community Living Exchange Collaborative, funded by CMS to assist Real Choice Systems Change Grantees. http://www.nashp.org/Files/Final_Regional_Forum_guide.pdf. Also, Ruth A. Gulyas. How States Have Created Affordable Assisted Living: What Advocates and Policymakers Need to Know. AARP. Washington, DC.
Payments in 209(b) states might affect Medicaid eligibility since it is not linked to SSI eligibility.
Medicaid Eligibility Groups and Less Restrictive Methods of Determining Countable Income and Resources. CMS memorandum. 5/11/2001.
Some of the information in this section is taken directly from Smith, O'Keeffe, et al., Medicaid Home and Community Services: A Primer. [http://aspe.hhs.gov/daltcp/reports/primer.htm]
Wisconsin has a special waiver to assure community placement for individuals who want to transfer when their nursing home closes.
Stone. J.L. (2002). Medicaid: Eligibility for the Aged and Disabled. Congressional Research Services. Report prepared for Members and Committees of Congress.
Robert Jenkens, Deputy Director, Coming Home Program, Vice President, NCB Development Corporation. Personal communication, June 2004.