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


The state uses a case-mix classification system to reimburse Assisted Living and Assisted Living Plus services. Individuals must fit into one of eleven case-mix categories, four of which include people with behavior problems. The lowest category is for people with few or no Activity of Daily Living (ADL) dependencies. Someone with cognitive and other mental impairments without ADL dependencies could fit in this category.27

The Elderly Waiver program and the state's Alternative Care program set a maximum rate for providers for a package of services. Each county determines what services are included in its "base service package" and negotiates a rate for those services, which may not be the maximum allowed under the programs. Currently, service providers do not have information to determine which services should be included in a basic assisted living service package in order to receive the maximum allowable rate.

Half of the Elderly Waiver and Alternative Care budgets is spent on Assisted Living services. To assure appropriate payment levels, the state has been developing a rate negotiating tool for counties to use for the Assisted Living and Assisted Living Plus packages. The tool is intended to ensure the provision of only those services actually needed by residents. Oversight and supervision will be specifically addressed as the majority of residents do not need 24 hour oversight, or supervision beyond what is needed for ADLs. The tool will help to specify exactly how much supervision is required, which is particularly important for persons with cognitive impairment.

27, Although this level receives the lowest reimbursement, the people in this category may in fact need extensive supervision. O'Keeffe, J.op.cit.

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