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


Historically, personal care facilities (sometimes called personal care homes) and adult foster care were the primary residential care options in Texas. In 1999, personal care facilities were renamed assisted living facilities, which are defined as any facility that serves four or more adults who are unrelated to the proprietor. Adult Foster Care homes that serve four or more persons are also required to be licensed as an assisted living facility.

In the mid-1990's, the state became interested in supporting residential care alternatives to nursing homes for individuals who met a nursing home level of care but could not be safely cared for at home. The Department of Human Services worked with providers and advocates to develop a 1915(c) waiver program to provide services in both private homes and residential care settings. The new waiver program, called Community Based Alternatives (CBA), was implemented in 1994. Initially, the cost of CBA waiver services was capped at 90 percent of nursing home cost, but the state has now raised the cap to 100 percent.

The primary goal of the CBA waiver program is to offer home and community alternatives to institutional care and to provide the opportunity for those in institutions to transition to the community. In keeping with this goal, the state made efforts to bring about a "culture change" among hospital discharge planners, doctors and families regarding the appropriateness of home and community care alternatives to nursing homes. One respondent noted that these efforts appear to have been successful, given that 95 percent of those receiving CBA waiver services have never been in a nursing facility.

When the CBA waiver program was developed, it was anticipated that 50 percent of waiver clients would be served in personal care facilities, particularly elderly persons who did not need a high level of care. This expectation fueled the development--and some respondents said--the over-development of personal care facilities and other types of residential care settings.

In 1987, Texas had 4,200 beds in personal care facilities. In 2002 there were over 40,000 licensed assisted living beds (including adult foster care homes licensed as Type C assisted living facilities), of which only 67 percent (26,000) were occupied, primarily by private pay residents. The main reason for the low occupancy is that the majority of waiver clients choose to live in their own homes. In 2002, approximately 2,500 CBA waiver clients received services in assisted living facilities through 320 contracts with providers across the state--less than seven percent of the 32,000 clients receiving CBA waiver services.

View full report


"med4rcs.pdf" (pdf, 3.73Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®