Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Considerations When Using the HCBS Waiver Authority


The three factors that are important for states considering the HCBS waiver authority are discussed next.

Coverage of Assisted Living through the Personal Care Benefit: North Carolina

North Carolina covers personal care in adult care homes as a Medicaid State Plan service.31

Target Population. Adult care homes serve adults of all ages with all types of disabilities, including developmental disabilities and those caused by mental illness. They are not licensed to serve individuals who need a nursing home level of care. There are two types of adult care homes: those that serve all populations and those that serve only persons age 65 or older. Adult care homes are divided into different types based on size--family care homes for 2-6 residents and adult care homes for 7 or more residents.

Services. Adult care homes are required to provide three meals a day, transportation, activities, and housekeeping services. The Medical Care Commission may limit what medical and functional care needs can be met in adult care homes; for example, medication may be administered by designated, trained staff but nursing services can only be provided by the residence on a case-by-case exception basis approved by the State’s Department of Health and Human Services, or through licensed home care agencies. Unless a physician determines otherwise, adult care homes may not serve people who are ventilator dependent or who require continuous licensed nursing care.

Payment. The payment includes a flat rate for basic personal care services with add-ons for residents with specific ADL impairments. Residents with extensive or total impairments in eating, toileting, or both eating and toileting qualify for a higher rate. In 2009, the basic payment was $17.50 a day for facilities with 30 or fewer beds and $19.17 for facilities with more than 30 beds. The additional daily rate for residents with extensive or total impairments in eating was $10.80 and in toileting was $3.86. Additional payment for residents needing assistance with ambulation/locomotion was $2.76 a day. Eligibility for the additional payment is based on an assessment by the adult care home, which is verified by a county case manager. (The State has a generous SSI state supplement, which is added to the SSI Federal benefit to cover room and board charges for residents of adult care homes: $579 in 2009.)

Coverage of Assisted Living through the Waiver Program: Oregon

Oregon uses an HCBS waiver to cover multiple services in residential care settings. Two settings are licensed: assisted living facilities and residential care facilities. The State has two classes of RCFs: Class I facilities provide only ADL assistance. Class II RCFs offer a range of services and can serve people who need a nursing home level of care. The Medicaid waiver program covers services in ALFs and Class II RCFs.

ALFs and Class II RCFs can serve the same population. When Oregon first decided to regulate assisted living, it chose not to replace existing RCF rules. Instead, it added a new licensing category for assisted living with requirements that differed somewhat from its RCF rules. The State has since consolidated many requirements for RCFs and ALFs, but maintains separate requirements for living units. The State does not allow providers to market themselves as assisted living unless they offer residents private apartments and are licensed as assisted living.

Target Population. The waiver program serves adults age 18 or older. Individuals at risk of nursing home placement and assisted living residents who were formerly private pay but who have spent down and become eligible for Medicaid are given priority for assisted living services. Rather than set specific medical or functional criteria governing when a resident is no longer appropriate for assisted living, Oregon’s regulations permit discharge when the facility can no longer meet the resident’s needs or there is a “documented established pattern” of noncompliance with the resident agreement.32

Setting. The primary difference between RCFs and ALFs is the physical setting. RCFs provide single or double rooms with shared baths; individual kitchens are not required. ALFs must offer individual apartments with lockable doors, kitchen facilities, and private baths.

Services. Services provided by RCFs and ALFs include three meals a day and snacks, personal and other laundry services, a program of social and recreational activities, assistance with ADLs, medication administration, and household services (cleaning and bed making). Facilities must also provide or arrange for social and medical transportation and ancillary services for related medical care (physicians, pharmacy, therapy, podiatry).

Payment. The Medicaid rate pays for the services ALFs provide under the licensing requirements. There are five levels of ALF payments based on residents’ acuity, which are based on a service priority score determined through an assessment. The monthly payment rate in 2009 for level 1 was $1,002 and for level 5 was $2,355.

Medicaid also pays for services for persons living in Level II RCFs who meet the nursing home level-of-care criteria. In 2009, the RCF base service rate for all clients was $1,249 per month. Depending on impairment level, there are three add-on payments. The base payment plus one add-on was $1,491; base plus two add-ons was $1,733; base plus three add-ons was $1,975. The add-on is based primarily on individuals’ need for assistance with ADLs.

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