Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Limiting the Amount Facilities Can Charge for Room and Board

10/29/2010

States can limit the amount that can be charged for room and board by setting a combined “rate” for Medicaid beneficiaries that includes service costs and room and board costs, but the state only pays for services. This approach essentially caps the room and board rate that Medicaid beneficiaries pay. Other states simply limit by policy the amount that facilities can charge Medicaid beneficiaries for room and board, usually capping the charge at the Federal SSI payment for a single elderly beneficiary living in the community, plus a state supplemental payment (SSP), if any. See Box below for a list of states that limit room and board charges.

23 States That Limit Room and Board Charges to the SSI/SSP Benefit Level in One or More Residential Care Settings
Arizona
California
Colorado
Delaware
District of Columbia  
Georgia
Hawaii
Illinois
Indiana
Maine
Maryland
Montana
Nebraska
New Jersey
North Dakota
Ohio
Oklahoma
Oregon
South Carolina  
Tennessee
Texas
Vermont
Washington

This approach guarantees that Medicaid beneficiaries can afford room and board costs in facilities that accept Medicaid. However, if providers feel that the room and board rate is too low to cover costs, they may decide not to admit Medicaid beneficiaries. New Jersey has passed a law requiring that facilities licensed after September 2001 set aside 10 percent of their units to serve Medicaid residents within 3 years after licensing.

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