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


The contract between the housing provider and the resident is the primary mechanism for assuring quality. By reviewing information in their contracts and negotiating items related to their individual needs, consumers receive the information they need to make informed decisions about where to live and the services they want. The signed contract is a legal document that sets standards for the housing-with-services provider and, if necessary, can be legally enforced.

While the overall quality assurance mechanism for housing-with-services is under the control of the resident, the Minnesota Department of Health does regulate residential care settings and surveys health-related services, which are considered to be critical to the well-being of frail residents. (See Licensing below) In addition, Minnesota Department of Health has the authority to intervene if it appears that a building is out of compliance with the Contract Act.

The Contract Act requires all Housing-With-Services Establishments to:

  • register each year with the Minnesota Department of Health for a $35 fee;
  • execute a written contract (lease) with all residents of the building; and
  • obtain a home care license if the establishment will directly provide any health-related services.

No specific format is required for the contract. The state does not approve contracts but may review them upon request. The legally enforceable contract with the building owner has 17 mandatory items that must be addressed, including:

  • registration and licensure status of the establishment
  • term of the contract
  • description of the services provided and the base rate
  • fee schedules for any additional services
  • process for modifying, amending, or terminating the contract (e.g., the process the establishment will follow when changing its fees);
  • complaint process
  • billing and payment procedures
  • resident's designated representative
  • criteria for determining who may reside in the establishment
  • statement regarding the ability of tenants to receive services from providers that do not have an arrangement with the establishment
  • statement regarding the availability of public funds

In addition to the requirements of the Contract Act, Housing with Services Establishments must comply with a variety of other state and federal laws, such as Minnesota's Vulnerable Adults Act, the Nurse Practice Act, landlord-tenant law, criminal background check laws, contract law, and civil rights laws such as Fair Housing and the Americans with Disabilities Act. State and local building and fire codes, lodging licensing, food/restaurant licensing, adult foster care licensing, zoning and other local requirements are applicable to these establishments as well.

Residents in facilities that are not required to register as Housing With Services Establishments do not have the protection of a legal contract, and these facilities are surveyed only for environmental compliance in terms of the physical plant and kitchen. If a resident receives waiver services in these settings the services are provided by a licensed home health entity and the resident's case manager oversees the services.

In 2001, the state enacted legislation creating disclosure requirements for Alzheimer's special care units. The legislation states that Housing With Services Establishments that secure, segregate, or provide a special program or special unit for residents with a diagnosis of probable Alzheimer's disease or a related disorder or that advertise, market, or otherwise promote the establishment as providing specialized care for Alzheimer's disease or a related disorder are considered a "special care unit."14 Special care units are required to provide a written disclosure addressing the following areas:

  • the form of care or treatment
  • the treatment philosophy
  • unique features for screening
  • admission and discharge criteria
  • assessment
  • care planning and implementation
  • staffing patterns
  • the physical environment
  • security features
  • frequency and type of activities
  • opportunities for family involvement
  • the costs of care.

The legislation also included requirements that the facility's direct care staff and their supervisors must be trained in dementia care. Areas of required training include: an explanation of Alzheimer's disease and related disorders; assistance with activities of daily living; problem solving with challenging behaviors; and communication skills. The establishment shall provide to consumers in written or electronic form a description of the training program, the categories of employees trained, the frequency of training, and the basic topics covered.15

  1. Typically Board and Lodge with Special Services entities would not have a special care unit unless it registered as a Housing with Services Establishment to enable it to receive waiver payments. If it is not registered as a Housing with Services Establishment, it cannot serve waiver clients, but may be receiving GRH Supplemental Service payments for non-elderly clients who are ineligible for waiver services (usually dual diagnosed with mental illness and chemical dependency).

  2. Minnesota Statues 2003, Chapter 144D.065, Establishments that serve persons with Alzheimer's disease or related disorders.




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