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


Everyone interviewed agreed that Oregon's primary goals in using Medicaid in residential care settings were (1) to reduce nursing home utilization, and in so doing, save money, and (2) to increase community alternatives to nursing homes, thereby providing consumers with more choice. In particular, respondents felt that the program's success lay in its offering Medicaid waiver clients the same residential care options available to the private pay market. As one said, "if the private pay market gets privacy and independence, then so should the Medicaid client." All believed that the state had met its goals and that assisted living had filled a gap in the continuum of care between Adult Foster Homes and Residential Care Facilities, and nursing homes.

  • The state wanted a balanced long term care system, where nursing homes were caring for skilled patients who could not be cared for in any other setting, mostly hospital discharges that still need sub-acute care. It wanted to get to the point where nursing homes were not a high-priced alternative to community care. Assisted living became another tool in the goal--it fit a good niche.

  • When the state started expanding home and community services in the early eighties, it depended primarily on adult foster homes for residential care. There was a big push to recruit adult foster homes. It made sense because the economy was down and people were out of work. We could sell the concept of using your own home or buying one and taking in older people, combining a social good with a way to make money. For the state, it was a really quick way to increase residential care capacity.

  • There was a real desire on behalf of program planners to come up with a model that afforded predominantly seniors with a more private and independent residence outside the home. We had lots of experience with adult foster homes and congregate settings--where common space is shared and most residents share bedrooms. We wanted a more private and independent model.

  • We saw assisted living as another alternative to the nursing home. We were already using Medicaid in adult foster care and residential care facilities. Assisted living was one more option. We knew we could both save money and give people what they wanted by providing more options in the community. Services in AFHs and RCFs had been covered from when the state first got a waiver, so we just added assisted living to the existing waiver by developing rules for ALFs, thereby getting around the need for legislative approval. The state views assisted living as just another form of residential care that it wanted consumers to have as an option.

  • We used the waiver rather than the personal care option because you could qualify people for the waiver under a higher income standard (300 percent rule) and you have more flexibility under the waiver.

  • Initially the state needed to save money and private pay folks needed to save money--and the nursing home model back then was very institutional and people didn't like it. So the rationale was to improve quality of life for people who needed long term care and to contain costs. Both were equally important. We figured, we can do this in a different way, give people more control--greater independence and choice. We can do both.

  • The public has a lot more options and because Medicaid participates in the funding of residential care services, it is a more egalitarian system. Giving people private rooms has been very successful. The downside is that the state has not invested in the physical upgrading of nursing homes--which are stuck in the 50's and 60s.

  • We have RCFs that look like assisted living but because they do not exactly meet the physical plant requirements, they cannot call themselves assisted living--e.g., you need to have a roll in or flat shower. In every other area they could be identical to assisted living. The good thing about the assisted living physical plant requirements is that there is a greater degree of accessible housing for persons with disabilities. These facilities have offered a housing option for the younger disabled who want privacy and independence but need some oversight and services. Assisted living has been very good for them.

  • A large number of facilities participate in the Medicaid program, which means there is no access issue for low income persons. Of course, providers with many Medicaid residents will be more vulnerable if reimbursements are cut.

Everyone interviewed agreed that there are no barriers to serving Medicaid waiver clients in all residential care settings, including apartment style assisted living settings. They felt that Oregon had an adequate supply of ALFs, and that access was good for both Medicaid-eligible and private pay individuals. However, many felt that the impact of the budget cuts on rates and eligibility for waiver services could put some facilities out of business, especially those with a higher proportion of Medicaid residents.

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