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


Regulations implementing the Housing with Services Contract Act were effective in 1996 and required services to be provided through licensed home care provider agencies.16 A home care license may be obtained by the same entity that owns the housing, or the housing entity may develop an arrangement with an outside home care agency to provide the services. Categories of licensure for home care providers are as follows:

  • Class A provider--traditional professional home health agency that serves the community in private homes as well as in housing with services establishments. A subset of Class A providers are also Medicare certified. Home care agencies provide one or more home care services, at least one of which is nursing services, physical therapy, speech therapy, respiratory therapy, occupational therapy, nutritional services, or medical social services.

  • Class B provider--paraprofessional home care agency that provides only personal care or home management services.

  • Class C provider--a home care provider who is an individual providing only personal care or home management services.

  • Class D provider--a provider of a hospice program.

  • Class E provider--a provider of individualized personal care services or home management services to residents of a residential center in their living units, when the provider is either the management of the residential center or another provider under contract with the management. "Residential center" means a building or complex of buildings in which residents rent or own distinct living units.

  • Assisted Living Home Care Provider--means a home care provider who provides nursing services, delegated nursing services, other services performed by unlicensed personnel, or central storage of medications, solely for residents of one or more Housing With Services Establishments. The housing entity must be registered as a housing with services provider to be eligible for this license.

    The Assisted Living Home Care Provider license was created in August, 1999, specifically for Housing with Services Establishments, to address the industry's desire to have unlicensed personnel provide the same services as a Class A agency, under the supervision of a registered nurse, thereby making the services less costly.

    The Assisted Living Home Care Provider rules allow medication administration. Staff who administer medications and actively assist with self-medication must complete the appropriate assisted living training program and be instructed by a registered nurse in the procedures to administer the medications to each client/resident. The instructions are specific to each resident and must be written, and the person must demonstrate competence in following the instructions.

When the new category of licensure was created, the state also changed the licensing requirements for some settings, and added a new service, called Assisted Living Plus (AL+), to the menu of services already provided through the Elderly Waiver and the state's Alternative Care program. Assisted Living Plus can only be provided in Housing with Services Establishments that meet the home care provider standard of either a Class A license or the new Assisted Living Home Care license.

The most common licenses for Housing With Services Establishments are the Class A home care provider license, the Class E provider license, and the Assisted Living Home Care Provider license.

The registered nurses and licensed practical nurses who provide nursing services and oversee unlicensed caregivers in all residential care settings must comply with the Nurse Practice Act, which is monitored by the Minnesota Board of Nursing. The central storage of medications, which is permitted in a Housing with Services establishment under the Assisted Living Home Care Provider License, is managed under a system that is established by a registered nurse and addresses the control of medications, handling of medications, medication containers, medication records, and disposition of medications.

16, Under Minnesota law, most agencies or individuals regularly providing home care services to clients for a fee are required to have a Minnesota home care license. Some individuals do not need to be licensed or registered if they provide limited types of services for 14 or fewer hours a week to only one client. Family members and volunteers providing such services without charge generally do not need a license. When Minnesota's home care license requirements were implemented, only services provided in single-family homes and apartments were covered. Although the Housing with Services Contract Act created no new licensing program, it did extend the existing home care licensing requirements to additional types of residential settings--including, board and lodging establishments and corporate adult foster care homes, if they meet the Contract Act criteria.

The home care license requirements spell out the services the agency or individual is allowed to provide and other requirements such as those related to the training and supervision of unlicensed caregivers, assessment of client needs, and the development and implementation of clients' service plans. Some home care providers are also Medicare-certified and must meet federal Medicare requirements in addition to the state licensing requirements. Liability insurance is a requirement for licensure.

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