Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. General Comments on Medicaid's Role in Residential Care Settings


Many respondents were very pleased that the state is using Medicaid funds to provide personal care to residents of adult care homes and felt it improved the quality of care. However, while there is a general sense that Medicaid coverage resulted in some quality improvement, some believe that the adult care home population is becoming more and more impaired, and that the homes are not able to provide the level of care residents need.

  • The introduction of Medicaid in 1995 did change things because more people are paying attention to people in these facilities. The residents are now seen by social workers and advocates--more people are in and out of the facilities--so the spotlight on these places has led to some improvement. The more people paying attention to very isolated residents with no family the better.

  • Introducing Medicaid personal care services into adult care homes was a cost- savings measure. It had very little to do with expanding services, options, or choice.

  • The primary purpose was to shift costs to the feds. It had the added benefit of increasing training and staffing requirements.

  • The advantage of having Medicaid in adult care homes is that is provides a dedicated revenue stream for the direct care part of adult care home costs. It allows the state to see if Medicaid dollars are being fairly utilized and if the rates are reasonable for the workload.

  • Bringing Medicaid into adult care homes was viewed as a means to keep people in domiciliary care safer, and some hoped, to bring more federal oversight of these homes, based on the Medicaid funding.

  • The state did the best it could at the time--putting more money into the homes to take care of the residents. Some in the state see it as only a temporary solution, and that the state needs to continue looking for better ways to serve the population in adult care homes.

Others are concerned that the state is using limited resources inefficiently by providing nursing care to this population through the Medicaid Home Health program.

  • Providing nursing care to assisted living residents through Medicare or Medicaid Home Health programs is an extremely inefficient way to provide nursing services to people in residential care facilities when large numbers of people need nursing services. This approach also does not meet all of the residents' nursing needs.

One respondent mentioned that the state had at one time looked into using the private pay model of assisted living for waiver clients.

  • The state's Housing Finance Agency received a grant under the Robert Wood Johnson's Coming Home Program. The purpose of the Coming Home Program is to encourage the development of affordable assisted living in rural areas. At that time, the Agency was interested in developing an affordable version of private pay assisted living with private rooms and baths and locked doors for persons eligible for SSI and Medicaid. To make this model financially feasible requires both housing subsidies to finance construction and Medicaid coverage to finance services for all the residents.

    The plans were dropped when the state could not guarantee that everyone residing in the facility would be able to receive services, even if they met Medicaid eligibility criteria, due to waiting lists for services and the freeze at the time on North Carolina's waiver program.

One stated that she had opposed allowing waiver clients to receive care in assisted living.

  • If you use the waiver, then the residents must meet a nursing home level-of-care criteria. This would encourage the industry to operate unlicensed nursing homes.

One noted that not all facilities accept Medicaid residents and discussed some of the reasons for this.

  • There are three types of assisted living facilities (1) those that will take Medicaid if the person has spent down in the facility. A very small percentage will take folks who've spent down after 18 months in the facility; (2) those that have no interest in taking Medicaid and take private pay and once you can't afford it you're out; and (3) those that accept both spend down folks and Medicaid admissions--but the available beds are limited.

    A disincentive to taking Medicaid residents is that the facilities have to provide cost reports to the state even if they have only one Medicaid resident in a 100 bed facility. Some providers have a huge number of buildings, but there is little movement to accept Medicaid to fill the beds. They are targeting a specific population--elderly folks with the means to pay. Facilities that take Medicaid generally set a percentage of Medicaid beds for their facility. About 35 percent is all you can have on Medicaid. Some facilities are 100 percent Medicaid but they can't provide anything above the bare minimum.

View full report


"med4rcs.pdf" (pdf, 3.73Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®