Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. The Revision of Domiciliary Care Home Licensing Rules


In 1995, considerable debate occurred in the North Carolina General Assembly about the definition of the term "assisted living." On one side were those who believed the term should only be used by facilities that provided the new model of assisted living, which offered private rooms and individualized service packages. On the other side were those concerned that a segment of the domiciliary care industry would be negatively affected if it could not also call itself assisted living. The latter group convinced the North Carolina General Assembly to define an assisted living residence to mean:

"any group housing and services program for two or more unrelated adults, by whatever name it is called, that makes available, at a minimum, one meal a day and housekeeping services, and provides personal care services directly or through a formal written agreement with one or more licensed home care or hospice agencies. The Department of Human Resources may allow nursing service exceptions on a case-by-case basis. Settings may include self-contained apartment units or single or shared room units with private or common baths."

The legislature specifically recognized three types of assisted living residences: Adult Care Homes, group homes for persons with developmental disabilities, and Multi-Unit Assisted Housing with Services. Because the new law defined assisted living to include group housing for two or more individuals, Family Care Homes that serve two to six individuals were also included in the new definition of assisted living, and must meet the same licensing and regulatory requirements.

In response to nursing home industry concerns that adult care homes would be turned into intermediate care facilities and would admit the light care residents that were served in nursing homes, the regulations covering assisted living specify that persons with certain medical conditions, such as ventilator dependency, or individuals requiring continuous licensed nursing care, can never be served in these facilities, except when a physician certifies that appropriate care can be provided on a temporary basis to meet the resident's needs and prevent unnecessary relocation.

One commonality in two types of assisted living--adult care homes and group homes for persons with developmental disabilities--is the ability to provide protective oversight and services to meet unscheduled needs on a 24 hour basis. In contrast, Multi-Unit Housing with Services facilities are not permitted to serve residents who require assistance at night. Multi-Unit Housing with Services facilities may call themselves assisted living, but they are not required to be licensed under the assisted living rules; they only have to register with the state.

In 1997, a moratorium was placed on assisted living facilities for three years, and in 2001, a Certificate of Need program was enacted. Continuing Care Retirement Communities are exempt because they are contractually required to provide whatever level of care is needed.

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