Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Licensing and Regulation

12/01/2003

States have the authority to license and regulate all types of residential care. There are no applicable federal statutes, other than the Keys Amendment to the Social Security Act, which is applicable to board and care facilities in which a "substantial number of SSI recipients" are likely to reside.22 State rules vary widely, and thus, respondents' views on licensing and regulatory issues are state specific.

In order to use Medicaid to cover services in residential care settings, the state must assure that its licensing and regulatory provisions match the needs of the individuals who will receive services in these settings. Licensing and regulatory provisions cover many areas, including construction and physical plant standards, health and safety standards, admission and retention standards, and staffing. A number of these areas are key for states serving a Medicaid population in residential care settings, particularly those who meet the state's nursing home level-of-care criteria.

Federal HCBS waiver regulations require facilities in which waiver services are furnished to meet applicable state standards, so state standards set the minimum requirements for Medicaid providers. However, the state's Medicaid program may set additional or more stringent standards for settings that serve waiver clients. For example, a state may permit residential care settings to offer rooms shared by two, three, or more residents, but a state's assisted living waiver program may choose to contract only with facilities that offer private occupancy unless the resident chooses to share a room or unit. Residential care settings providing waiver services must meet the standards for service provision that are set forth in the approved waiver documents. Medicaid contracting requirements may also specify additional training and other requirements if state licensing rules do not have sufficient requirements for facilities serving people with dementia.

State licensing and regulatory requirements address many areas, and an overview of these requirements for all fifty states can be found in other published sources.23 Appendices B through G of this report describe key licensing and regulatory provisions for residential care settings in the six study states.

All of the respondents we interviewed had strong views about a number of licensing and regulatory provisions issues. Their responses fell into seven categories, each of which is discussed in turn:

  • National Standards
  • Prescriptive Regulations
  • Staffing
  • Nursing Services
  • Admission and Retention Requirements
  • Negotiated Risk Agreements
  • Enforcement

  1. The Keys amendment is virtually unused to address quality issues. General Accounting Office. (1989) Board and Care: Insufficient Assurances that Residents' Needs are Identified and Met. Washington, D.C.

  2. Mollica, R.L., State Assisted Living Policy: 1998 [Full HTML Report]; State Assisted Living Policy: 2000State Assisted Living Policy: 2002. All published by the National Academy for State Health Policy, Portland Maine.

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