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


Minnesota began covering services for aged and disabled beneficiaries under the Elderly Waiver program in 1988. Waiver services are provided both in people's homes and in residential care settings. In FY 2001, the Elderly Waiver program served 2,895 beneficiaries in 291 residential settings.

Although the Elderly Waiver program has provided services (and some service packages of bundled Medicaid services) for many years to elderly persons in residential care settings, the development of the Assisted Living and the Assisted Living Plus service packages for the Elderly Waiver program (and the state's Alternative Care program) helped facilitate the provision of a more comprehensive set of services, particularly under the Assisted Living Plus program, in Housing-With-Services Establishments. With "packaged" or bundled services, Medicaid can reimburse for "generalized" services such as supervision, that could not easily be billed on a fee-for-service or hourly basis.

The state's Medicaid waiver program defines Assisted Living Services as "up to 24-hour oversight and supervision, supportive services, home care aide tasks and individualized home management tasks…" Under the Elderly Waiver program (and Alternative Care), residents may also receive home health and skilled nursing services, which are reimbursed separately from the payment for assisted living services.

The provider requirements for offering the Assisted Living and Assisted Living Plus packages are as follows:

Assisted Living Providers must be either:

  1. registered as a Housing with Services Establishment AND licensed as a Class A Home Care Agency or a Class E Home Care Agency or an Assisted Living Home Care Provider, OR

  2. be a Class A Home Care Agency contracting directly with the county to provide the Assisted Living package of services to persons in a congregate living setting, OR

  3. be a Class A Home Care Agency or a Class E Home Care Agency delivering services in a residential center which is exempt from registration as a Housing with Services Establishment.

Assisted Living Plus providers must meet more rigorous standards. They must be both:

  1. Registered as a Housing with Services Establishment, AND

  2. Licensed as either a Class A Home Care Agency or an Assisted Living Home Care Provider, AND

  3. The Assisted Living Plus service package they provide must include 24 hour supervision.

Both Assisted Living and Assisted Living Plus service packages can be provided in the following settings:

  • one to five unrelated people in a residential unit (adult foster homes).
  • six or more unrelated people in a setting licensed as a board and lodge establishment.
  • a residential center which is a building or complex of adjacent buildings with separate living units which clients rent or own.

As a general rule, services provided in all settings that are registered as Housing with Services Establishments are called Assisted Living orAssisted Living Plus. If the provider is not so registered, the name of the services will be different, e.g., Corporate Foster Care in Corporate Adult Foster Care Homes or Residential Care Services in Board and Lodge establishments, and they will carry different payment codes.

In the last legislative session, the Housing with Services Act was modified to allow residential care settings that don't have at least 80 percent elderly persons to voluntarily register as Housing with Services Establishments, thus enabling their residents to be served with the Assisted Living Plus package. However, they were specifically prohibited from receiving new Group Residential Housing payments unless they already had a GRH contract with the county. The GRH budget is a state forecast-spending amount based on demographics, and under the Governor's budget proposal at the time, could not be increased to accommodate any increase in utilization.

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®