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


Minnesota envisions assisted living as a service not as housing. Assisted living services are available in multiple settings, including senior housing, foster care, purpose built settings and other congregate housing. In this way the state provides an option for people who are unable to remain in their own home and need supportive services to avoid nursing home placement. The state does not regulate a specific category of facilities called assisted living. Instead, the state regulates services provided in residential care settings through the various home care provider licenses described above.

Not all residential care settings are considered Housing-With-Services Establishments. The state specifically excludes the following residential care settings from the Housing-with-Services establishment category:

  • nursing homes licensed under chapter 144A;
  • certified boarding care homes licensed under sections 144.50 to 144.56;17
  • board and lodging establishments licensed under chapter 157.17; (they are excluded because they have their own regulations and serve a predominantly non-elderly population);
  • family adult foster care homes licensed by the Department of Human Services; and
  • private homes in which the residents are related by kinship, law, or affinity with the providers of services.

Not all Housing-With-Services Establishments have to be separately licensed in some way. For example, an apartment building with separate units has only to comply with local building codes. However, buildings with a central kitchen may be required to have a food license.

In most cases, an "umbrella requirement" of Housing with Services registration is superimposed over the separate regulation of services and facilities. The state requires any establishment providing sleeping accommodations to one or more adult residents, at least 80 percent of whom are 55 years of age or older, and offering or providing, for a fee, one or more regularly scheduled health-related services or two or more regularly scheduled supportive services, to register with the Minnesota Department of Health as a Housing with Services establishment.18

  • Supportive services are defined to include only the following: help with personal laundry; handling or assistance with personal funds of residents; or arranging for medical services, health-related services, social services, or transportation to medical or social services appointments.19

  • Health-related services are defined to include professional nursing services; nursing services delegated to aides (such as medication administration), bathing and other personal care; and other services that may be performed by paraprofessional staff (stand-by assistance with dressing or grooming); and central storage of medications.

Services provided in Housing-With-Services Establishments must be provided through licensed home care provider agencies. The Housing with Services entity may obtain such a license or contract with a licensed agency. Services usually include some combination of supportive and health-related services. The various service programs may or may not have caregivers or other staff on-site 24 hours a day. Residents can contract for services with the owner of the building if the owner has a home care provider license or they can obtain services from an outside agency that has a Medicaid license.

Buildings registered as a Housing with Services Establishment may vary in size and type and include corporate adult foster care settings, board and lodging establishments (without individual kitchens), non-certified boarding care homes, and apartment buildings. Consumers choose the housing-with-services setting that they believe will best meet their needs. Medicaid pays for services through the Elderly Waiver and the Personal Care option for eligible individuals in all of these settings, which are described in the following sections.20

  1. Certified Boarding Care Homes are considered nursing homes and are eligible to receive Medicaid payments. However, these homes may only provide "light" care and cannot provide skilled nursing home care.

  2. When the Housing-with-Services Contract Act was passed in 1995, it was designed to apply to various types of buildings serving seniors, rather than settings serving other groups, such as persons with developmental disabilities. To distinguish which buildings served seniors, the state used the definition from the federal Fair Housing Act, which requires that 80 percent of the residents be age 55 or older.

  3. The state purposely excluded housekeeping services, meal programs, routine van transportation to shopping or recreational activities from the definition of supportive services so that the providers of these services would not have to meet all the requirements of the Contract Act.

  4. There is an erroneous belief that Minnesota's Medicaid waiver program only provides assisted living services to elderly persons living in private apartments with a full kitchen. It stems from the fact that when the Elderly Waiver service packages were first created, the package of services that were provided in apartment settings (where there were individual kitchens) was labeled "assisted living" while a very similar package covering essentially the same services could be provided in settings where residents did not have individual kitchens. The latter package was given a different name--residential care services. Both service packages covered the same types of personal care and health-related services, but they had two different labels. Consequently, many people made the assumption that because the service package labeled assisted living could only be provided in apartments with kitchens that these kinds of services could not be provided in other types of settings. (Personal communication)


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