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


Statutory requirements require ECC ALFs to allow residents to make a variety of personal choices, participate in developing service plans, share responsibility in decision-making, and implement the concept of managed risk. The statute defines the following:

  • "Managed risk" means the process by which the facility staff discuss the service plan and the needs of the resident with the resident and, if applicable, the resident's representative or designee or the resident's surrogate, guardian, or attorney in fact, in such a way that the consequences of a decision, including any inherent risk, are explained to all parties and reviewed periodically in conjunction with the service plan, taking into account changes in the resident's status and the ability of the facility to respond accordingly.

  • "Shared responsibility" means exploring the options available to a resident within a facility and the risks involved with each option when making decisions pertaining to the resident's abilities, preferences, and service needs, thereby enabling the resident and, if applicable, the resident's representative or designee, or the resident's surrogate, guardian, or attorney-in-fact, and the facility to develop a service plan which best meets the resident's needs and seeks to improve the resident's quality of life. In 2001, a requirement to report adverse incidents to the licensing agency was added to the statute.

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